Posted on: 6 April 2016
Investing in real estate is a smart move for most people, since most houses and condominiums increase in value over time. Purchasing a distressed property to update and sell for a profit can be a worthwhile financial investment if you make smart decisions during this process. Considering flipping houses has become a popular trend and income opportunity for many people, learning how to buy and update properties smart is key to your profit and flipping success.
You may not realize a property needs extensive repairs and updates until after you make the purchase. While making repairs and updates will still be necessary before selling, ensuring you purchase the property at the lowest possible price will make the cost of repairs less overwhelming.
To buy real estate to flip, focus on foreclosed properties that are auctioned off by different banks. Unfortunately, finding bank-owned properties can be difficult, since they are not usually listed by real estate agents. Many websites require membership fees to search for current foreclosed properties in your area, but the initial fee is a smart investment for purchasing properties at a discounted price.
Since foreclosed properties are most likely abandoned and left vacant for long periods of time, you will need to complete updates to make the property appealing to buyers. Many new investors tend to go overboard with these updates, so it is wise to focus on certain elements of the property. Here are a few updates that will ensure a larger return on your investment:
- Siding – Make sure the exterior siding of the property is clean and in good condition. Pressure washing vinyl, shake, and brick siding will remove light dirt and dust. However, consider replacing siding if it appears worn. Choose vinyl siding for an estimated 83 percent return on your investment or fiber cement, which offers a return of 79 percent. Of course, replacing the siding will also make the property more appealing to potential buyers.
- Curb Appeal – Clean, new siding will improve the property's curb appeal, but improving the first impression of the property with other tasks is also necessary. Clean up or remove any dead, overgrown shrubs, trees, and flowers around the property. Install a few inexpensive flowers in beds and surround in fresh mulch or pine straw. Make sure the driveway is clean and free of debris, as well. Lastly, make sure the front door is clean and vibrant. Apply a coat of bright and bold paint to the door for added curb appeal.
Hiring contractors to complete simple tasks is unnecessary and expensive. Most people are capable of cleaning, painting, and landscaping, so reduce costs by completing these simple tasks yourself.
Hire contractors to complete repairs and updates on any electrical, HVAC, plumbing, and roofing issues, since most of these updates will require licensed and experienced professionals.
Flipping a house can be overwhelming, but it is a great way to make money if you have a passion for real estate. Using these tips, you can reduce stress while increasing your profit.Share