The allure of house flipping is hard to deny. In some cities, house flippers can make gross profits of up to 80%. House flipping is far from a cakewalk, though. Ask the average person what house flipping entails, and they’re likely to give you a layman’s answer of, “buy an old house, fix it up, and then sell it for more than its original price”.
We admit that this isn’t the worst answer you could give, but in reality, there’s so much more to nabbing the ideal property for house flipping.
If you think you can flip a house in any given neighborhood, think again. There’s a pretty extensive list of things to look out for when shopping around for a fixer-upper. Today, we’re going to clue you in as to precisely what these things are.
The Big “Why”
Before we go any further, we need to get something straight: why are you looking for a new property to purchase anyway? Are you ready for the mountain of work that comes along with flipping a house? Are you prepared to handle the serious financial consequences that could arise as a result of not being able to sell the house fast enough? There are a thousand things that could go wrong when taking on this monumental task. Perhaps, then, you should make a list of what your ideal outcomes are for this process. It just might save you some heartache.
Of course, no one in their right mind will want to buy a house in a bad neighborhood. What do we mean by ‘bad neighborhood,’ though? It could range anywhere from the local school system’s quality to the amount of crime in the area to how many sex offenders live nearby. Fortunately, you can check all of these things before purchasing a property. Another thing to look out for is how many houses are currently for sale in the neighborhood. If the number is high, that could signal a recession or depression in the local economy, which will also drive potential customers away.
They don’t call it a fixer-upper for nothing, but you might want to reconsider purchasing a property if it has any serious health or safety hazards. With the right home renovation team, you can iron out many of the kinks you encounter throughout the flipping process, but it’s better to walk away early on in the face of some issues. Any property with a roof in need of replacement, mold of any kind, or pressing rewiring needs will cost you a lot of time, money, and energy. Seeing as it’s so easy to get caught up in the details and sink yourself in the house flipping process, be judicious when deciding on a property. It could pay off in the end.
Are you still reading? If you are, then that means you’re seriously considering diving into the glorious and filthy world of house flipping. For beginners, we highly recommend creating a house flipping business plan before going property hunting. It’s better to plan as much as you can to avoid any unfortunate missteps later on. Happy house flipping!