Tuesday, September 12th, 2017
If you watch home renovation shows like The Block, it’s tempting to see house-flipping for profit as a great way to make some extra income and make a side income as a property renovation specialist.
But do your research first! Buying a house is a huge decision that requires finance applications and patience and if you think enjoying some profits is as simple as doing a quick fix-up before launching it back onto the market, be realistic. Yes, there can be some money to be made but if you don’t know what you’re doing, there is a risk of losing money too.
To help boost your likelihood of house-flipping for profit, these 6 smart tips might help you find financial success, without the stress.
By creating a strict budget for your house-flipping project, you’ll have a firm understanding of your financial limitations. Unless you’ve got a fortune in the bank, buying a property usually involves taking on a mortgage. So to help minimise your risk, creating a budget of what the property will cost you initially, what you need to spend on fixing it up and also what the costs are related to selling it (conveyancing, marketing, real estate commission, etc) is a solid foundation.
If you’re looking for a bargain, don’t pick the hottest suburb but by radiating out a little, you can make an informed prediction at suburbs that will be hot in the near future – and that’s where smart investments can deliver a strong chance of a good return. Location attracts buyers so if your home is set up as a family home, it needs to be close to things like schools, parks and shopping to make sense for potential buyers. Check out what’s happening in the local council area. Increased spending on local infrastructure can be a sure sign that the suburb is on the move – and that makes it more attractive to potential buyers.
Financial limitations around how much you can borrow for a home loan is one thing, but when you’re taking on a renovation project, the only real way to make money is to do some of the work yourself.
If you have a background in construction or interior design, you’re off to a flying start. If not, it’s important to recognise how much value you can really add and when it’s best to call in the professionals. Damage caused by your own inexperience could cost you a fortune. Be careful.
Knowledge of the local real estate market is the key to opening the door to potential house-flipping profits. Buyers these days have different criteria that matters to them and issues like sustainability in design are becoming increasingly important. Little touches that add an element of sustainability will help your property stand out but pick your investments wisely. House-flipping for profit is not about investing stacks of money into finer details. Understanding the demographic likely to buy in the suburb your property is in helps you decide what’s important to focus on when it comes to creating some attractive refurbishments.
To make some fast cash from house-flipping, the ideal property requires some treatment that is only skin deep. A coat of paint, a fresh benchtop on the kitchen counter, or a new door to create an impressive entrance, can all do their bit to add some serious appeal. But if the property you’re considering buying needs major work, such as re-stumping, re-wiring or re-plumbing, it’s time to look elsewhere. This may not be the most lucrative project for you.
The main aim of successful and profitable house-flipping is to be realistic.
Renovation projects can be exciting – and they can work in your favour – but only if you know your limits and have a clear vision for what you need to achieve. Good luck!
If you have any questions about your finances, either personal or business, please do not hesitate to contact Loans Actually on (03) 8805-1850 or email firstname.lastname@example.org.