Property flipping is a means of buying a property at a low price, making some renovations and then selling it for a big profit. These renovations could include restoring a house that’s in disrepair, making extensions or converting rooms like attics and garages into bedrooms – anything that adds extra value to the property. It’s a riskier investment strategy than renting property but it can make you a lot of money quickly if it pays off. Here are some tips for anyone who’s been considering getting into flipping.
Create a budget
It’s important to have a budget and stick to it. This should cover the price of buying the property and any improvements that you then want to make to it. You don’t want to spend too much otherwise you could risk not making a profit and find yourself in a lot of debt. If you have to take out a mortgage, consider a specialist buy to sell mortgage. You can find information on these at sites like Online Mortgage Advisor.
Learn to negotiate
A good flipper needs to be able to negotiate at every stage. You first need to be able to get a good deal when buying the property, which could involve negotiating the price with a seller or agent. You then need to negotiate the pricing of renovation costs, whether this includes hiring professionals or buying materials and tools. Finally, you then have to negotiate a good sale price that will get you a profit.
Be wary of blind buying
It’s possible to buy cheap property without seeing it through online auctions and realtors. Whilst you may be able to get cheaper property this way, it doesn’t give you an opportunity to check out the condition of the property before you make your purchase. When starting out, it’s far safer to take your time when buying so that you don’t buy a house that costs more money than you can afford to restore. Companies such as Allcott Associates Chartered Surveyors can help you measure exactly how much work is needed and how much it may cost you. Look at multiple properties until you find one that you think you can take on as a flipping project.
Use cheap renovation tricks
The key to flipping property is to make improvements that add more value than they cost to implement. Turning an attic or garage into a bedroom can sometimes add a lot of value compared to how much it costs. You may be able to save costs further by sourcing affordable materials, creatively using lighting and paint, tidying the garden and using your own skills rather than hiring a professional. Its worth educating yourself in all these tricks before taking on a project.
Get your property valued by a professional
Once you’ve made all the necessary renovations, get your property valued by different agents to see what you’re likely to get for it on the market. If it’s massively under your target sale price you could consider adding a few more features to see if you can push it up – just be careful not to stretch your budget too much. You’re best off selling your property independently so that you don’t have to pay commission to an agent.