House flipping, or purchasing a property to renovate and resell, can be an excellent investment if done correctly. You can make significant returns on your investment with up to 40% return revenue. This profit can also be made very quickly, sometimes as soon as a couple of months.
However, there are still risks that come with house flipping and home renovations. These risks are often much more significant for first-time house flippers who are just starting out in the home renovation business. To avoid these pitfalls and amateur mistakes, we’ll discuss the top x tips you should consider if you’re renovating a house as a first-time house flipper.
1.Find the Right Location
Location is everything. The best houses to flip are those in a desirable or up-and-coming neighborhood. It will be hard or near impossible to sell a home with an unsafe, run-down environment surrounding it. No matter how beautiful you make the house, you can’t change the neighborhood.
Some signs of a developing community include rising real estate prices and employment growth. Neighborhoods with high levels of homes for sale should be avoided as this could indicate that people are leaving the area for crime or other unfavorable reasons.
You should also consider surrounding schools. It’s much easier to sell a house that’s in a good school system than one that is mediocre. As mentioned above, location is everything. This includes crime rates, schools, proximity to local stores and entertainment, and easy access to transportation.
2.Evaluate Market Trends
When deciding what should be renovated on the house, it’s important to look at the market trends. Going into a home renovation without a plan is an excellent way to lose money rather than make it. If you under-renovate, then you run the risk of not being able to resell the property. On the other hand, if you over-renovate, then the price for the house will rise, and you’ll lose some of your returns.
By looking into market trends, you can determine what is essential in your renovation to make the house comparable to others in the neighborhood. This venture isn’t about making a dream home; it’s about enhancing value to the property. Renovate what’s essential by including the latest design and appliances such as tankless water heaters or hardwood floors.
3.Don’t DIY Everything
DIY in-house flipping isn’t inherently wrong. However, if it’s done too much, it could present a problem when you try to sell. So keep your DIY efforts to a minimum with easy building or painting tasks. If it’s something more complicated like adding blinds inside glass or building cabinets, it’s always best to hire a professional.
The last thing you want is to make something that looks homemade, as this will detract from the home’s overall value. The best thing you can do for your home renovation is order materials from suppliers and manufacturers.
While it may sound exciting to build everything in the home, it's always cheaper to do something right the first time than to backtrack and fix problems.
4.Have a Backup Plan
In an ideal world, your renovated house will sell immediately, and you’ll receive the exact returns you were planning on. However, things don’t always work out as we hope. It’s essential to have multiple backup plans if your house doesn’t sell. There could be many reasons for a house not selling. The neighborhood could have taken a turn for the worse, the employment rate could be down, or any number of other market fluctuations.
Having a backup plan is what’s going to save you financially if everything doesn’t go perfectly. For example, maybe you decide to rent out space instead of selling it. Perhaps you can afford to sell the house for a lower price. Identify a couple of plausible alternatives to your house flipping efforts that won’t totally leave you financially drained.
5.Don’t Forget Curb Appeal
While most of your home renovation efforts may be focused on the house’s interior, don’t forget about the exterior. The street view of the home is the first impression any potential buyer will have and can be a real factor in their willingness to buy.
You don’t need to focus any significant energy on replacing siding, adding substantial landscaping, or other large-scale projects. Instead, the most important aspect of a home’s exterior is that it looks attractive and well kept. And if you need to sell my house fast, upgrading the curb appeal of the house is the best option every homeowner should do.
Some simple ways that you can boost your yard appeal include:
●Adding colorful flowers
●Painting the fence and front door a fresh
●Having a visible house number
●Keeping the lawn well-trimmed
6.Avoid Houses That Need Substantial Repairs
Especially when it’s your first time flipping a house, choose a property that doesn’t need large-scale renovations. This could include homes with foundational issues, damaged roofing, or siding. If the work is too complicated or extensive, you run the risk of losing your profit margin.
Instead, it’s best to stick to houses that need more minor renovations that focus on cosmetic updates such as painting, flooring, and appliance installation. Avoiding houses that are too far gone will make your home renovations worthwhile.
House flipping can be a valuable investment, but if you don’t know all the tips and tricks, it can be a very dangerous road to walk. Follow the above tips and do your research so you can set yourself up for first-time house flipping success.