You’ve seen home remodeling and “flipping” shows on TV. You know the ones—Flip or Flop, Fixer Upper and Property Brothers.
These programs take old, outdated, and sometimes completely derelict homes and renovate them into something unique and special.
Related: The number of homes flipped in the US increased by 18% last year.
Maybe you’ve thought about buying, renovating and re-selling a property as a real estate investment. Flipping a home can be financially rewarding, or the process can be a financial flop, depending on whether you research and plan carefully.
Here are 5 tips for successfully flipping an investment property:
- Consult with a realtor that understands the local market. They will be able to coach and advise you on property selection, purchase price and a proposed resale value once renovations are complete. Make sure to choose a real estate broker that has experience with investment property transactions in your corner of the world.
- Talk with your preferred lender to make sure a plan for financing is in place. Ask them about options with low or no money down.
- Give yourself enough time! Home remodeling usually takes longer than people expect—it’s pretty common to find extra things that need addressing when you open walls or start adjusting things like plumbing, wiring or heating systems. Extend your construction project timeline by a week or two to allow for hiccups that arise along the way.
- Be realistic with your skill level. Poor quality finish work will not help the resale value of your flipped home. Consider handling demo on your own but contracting with tile installers, finish/trim carpenters and drywall installers—have firm contracts/estimates from all construction vendors before they start.
- Focus on core areas like the kitchen, bathrooms, exterior curb appeal and interior layout/flow. However, don’t be tempted to over-renovate a home if the local market won’t support the quality of renovations you want to do.
We think flipping homes is a cool way to revitalize neighborhoods while potentially putting extra cash in your pocket.
Ready to get started? Check out this list of affordable investment properties in Bellingham, WA and plan your first home flip today!