Anybody interested in becoming a house-flipper to boost their property investments needs to be aware of the financial risk of such an activity.
Indeed, flipping houses for a profit is a lot easier said than done. A lot of newcomers to the flipping market discover too late the dangers that lack of knowledge and insufficient planning can create. If you’re going to turn an unwanted property into a real estate gem that buyers want to own, you need to understand how to budget for costly expenses.
Typically, the process of flipping houses starts with the purchase of a property that needs repair work done. You need to run thorough inspections whenever possible before making your offers.
This will avoid buying something you can’t fix for a profit!
The foundation is unstable
Unstable foundations are a lot more common than you might think.
Typically, the warning signs are cracks in the walls and along the stairs, which indicate that the foundations are moving or sinking. If your stairs are starting to see the wear and tear as well, it might be time for a new staircase or renovation.
Selling a house with structural issues can be tricky, especially as a house flipper. Therefore, you want to make sure you understand the damage and the potential cost to get it fixed. Thankfully, not all foundation repairs need to break the bank.
In some cases, $10,000 is all you need to pay to make the house safe again. You might be able to make an offer that takes repair costs into consideration.
The windows need updating
Old windows can be a pain.
It’s not uncommon to see condensation between the glass of older windows. Condensation can be an indication that the windows are letting moisture in, which means you’ll need to look for wet and moldy patches as you visit the property. Fixing old windows to release condensation is a reasonably straightforward process.
However, when your windows are encouraging water and air infiltration, you’ll need to replace them. Take the time to estimate the real cost of the repair work.
The roof needs fixing
Would you believe it? Not all house flippers notice the property they buy needs roof replacement. Indeed, when the roof is out of sight – aka the house is too high for you to see the roof –, it’s hard to notice issues until it’s too late.
You need to check the attic and plan visits on rainy days to make sure the roof isn’t leaking. Indeed, in terms of cost, roof replacement can cost up to $16,500, which is why it’s crucial for you to be aware of the repair needs at the time of your purchase.
Getting your investment back is hard work when you need to go over budget to make the house habitable again.
The unwanted guests have made it their home
Last but not least, pests in your property can be a deal-breaker.
As a potential buyer with house-flipping interest, you need to be absolutely certain that the rodents, bugs, or any other creatures in the property have not done significant damage to the structure. While pest control comes at a cost, it will be a lot worse if you need to add structural repairs to the final bill.
House-flippers need to audit the properties they want to buy. While you can’t expect perfect homes, you need to familiarize yourself with the costs involved in getting the house ready for selling.