How To Do Up a Property That’s Run Down
One of the most popular kinds of home show on TV at the moment are the ones that focus on buying run down houses, doing them up and selling them for a profit. This is known as “flipping”.
The only reason for the person buying the house is to do some work and then sell it on again quickly for a profit. The idea is to make a quick profit and then move onto another property.
The profits from flipping houses can be quite large, especially if you know what you’re doing. Depending on how much work you need to do on the property you should be able to turn them round pretty quickly.
Deciding whether the house is suitable for flipping usually requires looking at why the house is being sold. It’s not really desirable to flip houses that are in reasonable condition, remember the worse the standard of the house the cheaper it should be. Most companies that specialize in doing this will look for a property requiring a fair amount of work. Flipping houses make them much more desirable to people.
The idea is to buy a house at much less than its market value due to its poor condition. People want to buy perfect houses and so will be put off even if only tiny things need doing. If there are only small repairs to do you should be able to get the house back on the market within one month. The price when selling the property should cover the mortgage, renovation, costs associated with selling, and provide quite a nice profit.
Fix it properly
Many companies that renovate houses do so properly. When flipping houses they do not just make cosmetic fixes, they will also go beyond this. Thus, you should do a pre-purchase pest and building inspection so that you can work out exactly what needs doing. You may find out that you need to spend more on renovation than you expect. This will ultimately reduce your profit, or even wipe it out completely.
A frequent type of home that is targeted by flipping home companies are foreclosed homes. This is because they do not attract as many people and so are often cheaper, they can be as low as 60% of the actual market value and only nee a little work to get them in order. These kinds of homes allow the company to do up a house very quickly and make a good profit.
Most people will try to get profits on the first couple of houses with the intention of buying houses with the profits without having to borrow money. In time this can become a very successful business and you’ll be able to pay less on each house. If you are able to find houses in your local area to flip then you will already know more about the market which could be beneficial. Good Luck!