More and more, we’re hearing about the importance of making wise investments. But not everyone wants to take their chances with the stock market. Instead, they want to go with a safer option. That’s where real estate comes in.
This strategy means buying houses cheap, renovating, and selling them for a profit. Real estate isn’t a straightforward investment strategy. It’ll take time, patience, and some hard work. So what makes it worth it? Real estate is one of the safest investments you can make. When done right, it can bring you the most significant returns.
Here’s our 5-step strategy for flipping houses in the real estate market.
Image by Pavel Danilyuk via Pexels
Find the Right Property
First things first. You need to identify the right property. That means taking a closer look at the local real estate market. Figure out what people seek in a home and any popular or up-and-coming districts. If you don’t have enough capital to get off the ground, consider FasterFunds hard money lending.
Finding overlooked or dilapidated property in desired areas means you’ll have a market ready and waiting when it comes time to sell. Use your collected data to evaluate each property’s potential return on investment (ROI). Considering the initial cost, the cost of renovations, and the selling price of similar properties in the area.
Create a Renovation Plan
Once you’ve got your property, walk around. Make notes of everything that needs doing as a priority first. These are the basics every home should have. Then make a separate list of wants. Things will take the house to the next level and increase your ROI.
What you’re able to get done will depend on your budget. And you can determine a budget quickly. Consider the sale price of similar properties in the area. Take out the house’s cost, and you’ve got your profit. Use that number to decide how much to spend on renovations. Higher cost means smaller profit.
Manage Renovations
While you can do some renovation work if you feel confident, you’ll likely be hiring. Make sure to research your contractors before committing to having them finish the job.
To manage correctly, you’ll need a timeline for completion. This will help you stay on schedule and within budget. Sit down with the contractors you’ve hired and work out a realistic scale. Try to have some breathing room in case anything doesn’t go swimmingly. Plan to get the property back on the market at peak selling times to increase your chances.
Staging and Marketing
Once your renovations are complete, stage the property for sale. You can rent furniture for a period if you don’t have the money to buy it. Make sure everything you choose is neutral and inviting. You want the buyers to imagine themselves in the house. Not blinded by your personal style.
Working with a real estate agent will help you set a price for the property and create a marketing plan. Use them as much as possible. They already have a network for selling houses, so their contacts will be invaluable.
Close the Sale
Sale negotiations can get hairy. Take the advice of your real estate agent and use your previous research to decide if an offer is fair or not. It’s ok to haggle or not settle. After all, you want to make the best return, and if buyers really want the home, they’ll pay.
Consider hiring an attorney to ensure your best interests are central to all dealings. Real estate is an excellent alternative investment. But if you don’t have any prior experience with house sales, defer to the professionals.
Conclusion
Maximizing returns on house flipping investments is about finding the right property, minimizing expenditure, staging to sell, and listening to the professionals. Done right, real estate can bring huge returns and a safe investment for many years.
Are you thinking of jumping into the world of real estate? Let us know how it’s going in the comments below.
