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Home flipping can be a great way to turn a profit with real estate investing, and especially when it’s done correctly. Flipping can net you a significant return in a very short amount of time, making it ideal for investors new to the space. If you’ve never flipped a home before though, you should know that it can be a significant undertaking. There are certain homes that are simply not worth the effort, and there are sure to be some issues that come up while you’re renovating. Knowing how to navigate these problems can be the difference between a successful home flip and a bad one. If you’re planning to flip a home in the near future, here are a few things to keep an eye out for.
A bad location
Location is always a determining factor for homebuyers, and it’s one of the most important things to consider with flipping before you make a purchase. You’ll have better luck flipping a lower-cost home in a great neighborhood than the best home in a bad one. After spending time and money renovating a property, the last thing you want is to lower the sale price just to get it off your hands. Ideally, you will want to find a home in a safe area, with access to good schools and amenities like restaurants and shopping areas close by.
Unnecessary upgrades
With flipping, your goal is to boost a home’s resale value by more than you’ve invested into it. That means you’ll need to avoid upgrade decisions that don’t appeal to everyone. You might think a jacuzzi or in-ground pool is a great addition to a home, but not everyone will agree. For home buyers, it will be tough to justify the added cost of features that they aren’t interested in. Instead, focus your attention on low-cost upgrades with a big impact. Some great examples include a fresh coat of paint for the walls, or new hardware and appliances in the kitchen.
Neglecting landscaping
You’ll be spending so much time focused on the inside of the home that it’s easy to forget about the outside. But you need to keep in mind that your home’s exterior is the first thing buyers will see, and a little effort can go a long way in boosting a property’s curb appeal. If you’ve already taken care of the easy things like mowing the lawn and trimming hedges, you still have plenty of options. You can add some plants in strategically placed locations, add or redo a stone walkway, or replace existing mulch with rock gardens. If you’re struggling to find an idea, go for a drive around the neighborhood and see if any homes catch your eye.
The wrong professionals
Having a solid team on your side will lead to a much higher chance of having a profitable home flip. Your realtor will end up being one of the most important people you work with throughout the process. A good realtor is able to find you buyers quickly, and will make sure the home sells for a good price so your efforts don’t go to waste. If you decide to hire contractors for any work, you should always vet them by asking for examples of past work. And if you’re still struggling to find a quality professional, it can be a good idea to ask friends and family for any references.
A bad listing
In the modern age, you sell your property by listing it in the NMLS where it will ultimately end up on real estate websites like Zillow or Realtor.com. That also means your listing can have a big impact on your final sale price. A good listing with great photos can ensure you receive a good offer, and can even lead to higher profits than expected. If you really want to knock it out of the park, you should consider working with a professional real estate photographer to help your property stand out from the pack.
Looking for a quality lender for your next project?
RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. If you are looking to acquire a loan for a home flip, RCN Capital has competitive loan options available. Connect with us today to discuss your next real estate investment.