Not too long ago, house flipping became a craze that by all appearances was the perfect way for a person with some extra cash and a designer’s eye to make a lot of money.
During that time, you could easily buy a home very cheaply, make a few repairs, put in new flooring and a coat of paint on the walls and then get a fat check for your trouble. These days, the market has rebounded some, and the number of flippers has increased.
It is still possible to make good money flipping houses for profit if you proceed carefully. To help you determine whether you are ready to start flipping houses for profit, here are 5 things to ask before you buy a fixer-upper.
Do I have Enough of the Right Knowledge
To really be successful you must know how to pick the right properties to invest in. This means knowing everything possible about the location, price trends and future additions that may be popping up the neighborhood where you are considering a home.
Do I Have Enough of the Right Skills
With the decline of hot property deals in today’s market, a lot of the money made in flipping is through sweat equity.
So, if you’re good with a hammer, can install a laminate floor, or fit a room with drywall, you may be able to turn a decent profit on a flip. If your plan is to pay someone else to do all the work, at the very least you can count on a much smaller profit margin.
Do I Have Enough Money?
Real estate is expensive. And while the rewards can be worth the initial investment, if you don’t have the financing or ready capital to ensure you will be able to complete the project, you may end up spending a lot of money, and putting in a lot of work, only to end up with an unfinished house and an empty bank account.
Do I have Enough Time?
Flipping houses is a very time-consuming process. Even before the actual renovation starts, it may take months of searching listings and attending auctions before you find the right property to take on. Here is what to look for in a property, take your time and get it right.
Once you’ve closed escrow, you’ll need to invest time in the actual renovation. Whether this involves doing the work yourself, or overseeing the professional contractors who will be handling the hard stuff, expect to be on site regularly to ensure everything gets done correctly and on time.
Do I Really Have the Patience for All of This?
After taking everything else into consideration, you have to ask yourself the hard question. Do you really have what it takes? If the answer is no, that’s OK. It doesn’t make you less of a person. It just means that there is something else out there that will benefit from your knowledge and skills more.
Like everything else in life, not every avenue is right for every person. If flipping houses for profit is right for you, fantastic! For the right person, it can be an exciting and rewarding way to make money.