Investing in a fix and flip property is a great way to diversify your real estate portfolio and give it a boost in liquidity. Like any investor, you’re probably wondering how to make the most out of your investment property. Look no further, here’s how to maximize the returns of your fix and flip.
How to Maximize the Returns of Your Fix and Flip
Increase Living Space
If it’s feasible for your budget, increasing the living space of your fix and flip property can help boost your returns. Look around, is there any unclaimed space you can put to better use? You can choose to break down walls to make rooms larger or bring your project outside and build a deluxe patio with gravel or a raised deck. Whatever you decide, increasing the living space can help to add value to your home and increase profits.
Repaint the Interior
Putting up a fresh coat of paint is a little improvement that can go a long way. Whether you decide to paint the exterior or interior of your fix and flip, this subtle change can have a substantial effect on the way your property is viewed. Many investors underestimate how far a fresh coat of paint can go; always remember to freshen up the walls with a new coat if you want to maximize the returns of your fix and flip.
Update Lighting Fixtures
Another easy way to boost the returns of your fix and flip is to update the lighting fixtures around the property. This quick fix is a great way to maximize the returns of your property, especially when you add lighting to accentuate different parts of your property. Think about the features or natural elements of your property you wish to shine a light on to create a stunning view at night. With new accent lighting, you can beautify your property and make it more desirable to potential buyers.
Incorporate Smart Tech
Let’s face it, the smart technology revolution is here to stay. You’ve probably already seen various smart home features while researching the real estate market such as smart temperature controls. Right now, there is everything from smart lighting to automated security systems that you can install to help maximize the returns of your fix and flip. While this investment may not always pay off with lower cost homes, installing smart technology can enhance your property with the right demographic of buyers.
Know Your Prices
Whenever you’re seeking to maximize the returns of your fix and flip, you should know your prices. When we say “know your prices”, we’re referring to the price of contractors and home improvement work so you can always get the best price for materials and labor. Cheap material or rushed labor can quickly turn a fix and flip property into a flop, so it’s important to know from the start what buyer pool you’re refurnishing for and how to incorporate the best labor prices into your projects.
Be Realistic with Renovations
Like all real estate investments, it’s vital to your strategy to not go overboard with renovations as this will only eat away at your profit margins. Before committing to a fix and flip property, you should fully assess the price of the home and how that price can be increased through renovations. Create a plan and stick to it; unexpected renovations mid-project is something you want to completely avoid. If your goal is to flip the property quickly, don’t waste your time making large renovations that can potentially be money pits. Always be realistic with renovations, as this is the final determinate of your returns.
Have an Exit Strategy
Every good investor knows that even the best investments need a thorough exit strategy. To maximize the returns of your fix and flip, it’s recommended to have two exit strategies to reduce the overall risk of your investment. Holding onto a bad deal costs you more than just money, it costs you time as well. Always play your hand strategically in the real estate market: it’s better to be prepared than to be in over your head.
RCN Capital offers short-term and long-term financing options for real estate investors. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs. Connect with us today to discuss your next real estate investment.