Flipping a home to get maximum returns is the key to successful real estate investing. When you acquire property for flipping purposes, you need to buy it at a price and factor in the repair increments. With some right amount of work, it can yield some good returns. Not everyone gets the same results.
Maximizing the Returns
Investors who make a living in home flipping know that it’s not only about selling. What matters is selling at a premium. When there is significant margin between buying and selling price, only then you can make a decent cut. The moment you own a property, you are in the game. So, here are some factors that can help you increase the profits when flipping a house.
Think from a Buyer’s Perspective
When you look at the other side of the fence, you get a whole new perspective. Personal opinions and feelings have to be put aside. Rehabbing has to be done from a buyer’s point of view. You may like certain aspects of your new home but not all potential buyers are in the same boat. For example, small changes like fireplace addition or backsplash options have to be seen from a home buyer’s eyes. Investors should do decent research into recent trends in the housing market. Also, take a deep look into what kind of homes are not selling in order to learn from the mistakes of others.
Luxury vs. Affordability
Offering luxurious elements in budget segment does not make any sense. There should be a fine line between affordable solutions and luxury additions. Flipping makes sense when can make additions without burdening yourself with unnecessary costs. Successful rehabbing comes from sensible expenditure.
Buyers love quartz countertops, high-end faucets, luxury bathrooms etc. That does not mean that you have to provide them the same at the cost of your rehabbing margin. Not everyone is going to pay for these amenities especially in the budget segment. Avoid overdoing things just to satiate your personal desires. Stay in the range of most buyers and you will sell your property with maximum returns.
Approach the Right Buyers
Being aware of your target market is half the battle won. Surfing in the right wave of supply and demand will make things work in your favor. Remember, the highest bid may not materialize and can set you back months. Mortgages can take their sweet time. Approaching a set of pre-approved buyers will help things in your favor.
Being stuck at one offer for too long will make other potential buyers look at other options. If the offer is not converted into sale, the whole process will have to be repeated.
Most people would agree that rehab property be marketed once all the work is complete. However, with rising social media graph, you can create viral campaign even before the work is complete. This will help generate appropriate interest in the property before it hits the market. The price can be revealed later. The sooner you let potential buyers know, the better.
Achieving maximum returns is a fruit of different factors. Rehabbing is successful when you know the selling price is enough to move to another potential flipping property.
Revive Property Group