Just the term “flipping a house” seems to imply that it’s something that is easily done. There are many would be handy men out there who feel that buying and selling a home after making a few renovations is the highway to making tons of extra money.
It would be wise to quite handy with a saw and hammer before attempting to buy a “fixer upper” with the express purpose of making yourself a tidy profit.
First of all, most house buyers are very aware of the growing house flipping trend. There will always be those out there who believe they can do a shoddy job and get away with a huge profit. At first blush, it might seem like easy money. What they are really doing is jumping onto the bandwagon that has proven successful for so many others. As is usually the case however, most ideas are not so great once time passes. In the case of house-flipping, most of the real bargains are most likely gone and all that’s left over out on the market are the properties that just do not offer enough of a financial swing to make them viable candidates for a remodel. If that was the case, they would already be snapped up by a savvy buyer.
It really is not as easy as it seems. If you have to pay anyone at all to do much of the work, you will see your profits going into their pockets and not yours. If you are not prepared to spend hours of your own time on the project, most likely it will be a financial failure. Those hours could also end up being “hundreds” of hours once you start tearing down walls and ripping up floors. So be prepared to be giving up your evenings and weekends of down-time in order to take on what is in effect, a second job.
It’s also important to note that building materials are getting more and more costly all the time. It is important to do the math when you set out to buy a house that needs fixing.
When you do re-do the house and put it back on the market make sure you have factored in all the real estate and lawyers fees.
Ultimately, you may find that you only come out a few thousand dollars ahead. If this is all the payback you want from all the headaches, effort, and time commitment then possibly house-flipping might work for you.