The real estate sector is an avenue to make maximum profit for many investors. From investing in real estate stocks, land banking, buying property for lease/rent, and so many other ways you can think of.
One of these many real estate profit making strategies is ‘House Flipping’. Like the word ‘Flip’, it is like the property investor made a turn around decision to sell the property rather than keeping it for personal use.
Well, that is the original intention of the property investor – to buy a property (especially an old one), rehab it into a good condition, then put it up for sale at a higher value.
To gain a better understanding of this, let us look into the major steps to profitable house flipping investment.
House Flipping In Real Estate
This is when a person buys an old real estate property at a low cost, renovates it into a better condition and resells it for profit. It comprises 3 major activities, buy – renovate – resell.
This method of real estate investment guarantees high returns, but it heavily depends on many factors like; the location, cost of acquisition and cost of renovating the property, as well as the current market value of the property.
Major Steps To Profitable House Flipping
Find the Right Property: What does it mean to find the right property to house flip? An old property in a good location and close proximity to important facilities is still a hot catch in the real estate market, especially a residential property.
You will realize that a whole lot of people are just wishing for the property to be in a good condition because they dread the renovation cost and process. What should you do? Find a property in a good location with high market demand and potential increase in market value.
Estimate Renovation and After Value Cost: Finding a property in a good location is not enough, you must also determine the overall cost of renovating the property. The cost of structural, electrical, and plumbing repairs, as well as the cost of acquiring property use permit and labor cost. Do not make the mistake of starting a renovation; you can’t bear the cost.
This is an important step you must not overlook, it will help you determine if you have the financial capacity to take on the renovation and if the property will still sell at a profitable price. Ensure you do your findings to know the value of property in that area and ask yourself if you will get a valuable return with the current market price? If the answer is yes, then you are good to go.
Negotiate and Close Property Purchase Process: Once you have determined the cost of acquisition, renovation and potential resale value, you can now make a purchase offer on the property based on the projected cost. You must close the purchase at a price that ensures your profit after deducting renovation cost.
Inspect Renovation Process: You must inspect the renovation process to ensure there is efficient time management and productivity. This will also help your renovation team adhere to the planned budget and timeline to prevent delays just so the entire process can wrap up on time. However, do not compromise on quality in the renovation process.
List Property For Sale At A Profit: When all renovation process on both the interior and exterior of the property is completed, it is time to list for sale in the market. You can seek the service of a real estate agent to maximize exposure and attract potential buyers for the property. The real estate agent will help follow the proper process to ensure you get the best returns on the property sale.
That is where Novarick Homes and Properties Limited steps in as your trusted real estate partner, our team of experienced professionals is dedicated to providing you with the best service with their expertise.
Our commitment to exceeding expectations is evident in our track record of satisfied clients who have entrusted us with their real estate assets. Visit our website at Novarick Homes and Properties Limited to schedule a consultation.
