Retirement isn’t for everyone, but neither is working the same demanding job for the rest of your life. As you enter your golden years, you’ll likely want to try new things — things that are more fulfilling and exciting. So why not get into house flipping? When done right, house flipping can not only turn a profit, but it gives you the chance to give back to your community by creating beautiful homes for families.
Of course, house-flipping can be risky, which is why it’s important to understand how it works before you try it out. Follow these tips from Theresa Donley of the Donley Team/Western Real Estate to ensure that you’re on the right track for house flipping success.
The most important aspect of house flipping is understanding the housing market and how to find the best locations. The ideal house for flipping is typically located in a neighborhood that’s on the up and up, such as one that’s beginning to attract young families and professionals. The neighborhood itself should be centrally located so it’s close to important things like public transportation and nice schools, as well as far from crime.
According to HGTV, a house with the best potential will have several very specific qualities. For example, it’ll have what is referred to as “good bones” and an attractive layout, needing minimal renovations. Essentially, you don’t want to choose a house that’s going to require extreme renovations because every month that you spend working at that house is time and money you’ll be losing.
There are two things you can’t flip a house without: money and good credit. It’s best to already have the cash to purchase the home you intend to flip as it’ll save you more money in interest and loan fees and PMI insurance, but if that’s not feasible, having excellent credit to take out a mortgage loan is your next best bet.
Aside from buying the house, you also have to consider any home improvements and renovations. It'll need to be flipped and ready for the market. You can expect the total cost of flipping a house to come to roughly 10% of its purchase price. So whatever house you’re looking to flip, you can calculate the estimated cost by the purchase price plus 10% of that purchase price to get an idea of what you’ll be investing in.
It’s also a good idea to use accounting software for your business to help you keep track of your house flipping budget. For example, QuickBooks Online Advanced is an excellent budget-tracking tool that’s preferred by many growing businesses, and it offers you the opportunity to customize the features in your accounting software. Not only does it allow you to generate financial reports in real-time so you can stay within your budget and identify your biggest expenses and best income sources, but the platform also offers comprehensive training and dedicated support.
You’ll need to treat each home you flip as if it were your own. That means hiring a team of trusted contractors, subcontractors, electricians, inspection agents, landscapers, painters, etc. to get the job done.
Once you find people you can trust to do an excellent job, you’ll want to continue working with them for each new house flip project. Continuously employing these people will mean two things: You may be able to work out a discounted rate and you’ll need to cut them a check as if they were your employees.
House flipping isn’t for everyone, but if you’re passionate about home renovation projects, it’s a side business that you can get into at any age — as long as you know what you’re getting into and what to expect!
Interested in purchasing your first house to flip? Contact Theresa Donley of the Donley Team/Western Real Estate to get started.
Image via Unsplash
rite your Content here.