If you’re renovating a property with the intention of flipping it afterwards, it can be difficult to determine when to stop spending money on its renovations and repair work. Not spending enough could result in the property not fetching a good price, while overspending on renovations will result in you not getting your money back when it sells. Below are some tips to help prevent you from exceeding your house-flipping budget.
Research the Neighborhood before Signing on the Dotted Line
Before you even consider purchasing a home to flip, it’s essential to research the neighborhood thoroughly. Too many inexperienced flippers make the mistake of spending a lot more on renovations than what the house will actually sell for.
Research comparative property prices of other properties, check to see how long homes tend to remain on the market for before selling and see whether there are any decent amenities nearby – a good school system is usually one of the biggest selling points for families with kids, for instance.
Focus on the Rooms that are Most Important
Most real estate investors know that a home’s bathrooms and kitchens are usually their main selling points, meaning that you should focus your energy on renovating these two areas before looking at anything else on a property.
While it may seem frivolous to spend money on granite countertops, stainless steel appliances and luxury faucets, sinks, tubs and toilets, keep in mind that you’ll save money for each day that your property isn’t languishing on the market.
Here are some aspects that buyers tend to look for when shopping for a home:
- Granite or quartz countertops
- A stunning kitchen
- Solar panels
- A practical laundry room
- Energy efficient windows
- Hardwood flooring
- Good outdoor lighting
- A dedicated outdoor entertainment area
Pay for a Professional Property Inspection
A mistake too many new flippers make is to cut costs on essential services such as property inspections. However, the cost of having a property fully inspected will be minimal, especially if structural, foundation and/or electrical problems are detected – in short, taking this step will provide you with the opportunity to walk away from a specific home if it is going to cost too much to repair or renovate.
Work with the Right Financing Company
Before you can even think about looking at homes to flip, you’ll need to ensure that you have access to sufficient financing. Many new house flippers have sufficient funds on hand to purchase a property, but then fall short when the time comes to do renovations and repairs.
Obtaining a hard money loan from the right lender can make all the difference between being able to get started with your house flipping career or simply dreaming about making it happen.
If you are keen to get into house flipping and require the services of a reputable hard money lender to help you get started, get in touch with our team today. We look forward to helping you make your dream become a reality.