If you purchase a property that needs serious renovations, you can buy the property at a steep discount. The money you invest in refurbishing the home can lead to high returns by exponentially increasing the property value. If done right, you can start your very own business flipping houses, and this can take the place of your sole income. Learn about the top reasons to invest in properties for house flipping and see why young entrepreneurs are taking time, career, and money into their own hands.
Make Good Money
Generally, the average profit for flipping a home is around 65,000 dollars. You want to spend no more than 30 percent of the houses after repair value. To receive a high return, however much you intend to sell the property for, you should spend no more than 30 percent of that sales price on renovations. This ensures that you are making a sizeable profit.
For instance, if you purchase a property for 150,000 dollars and spend 40,00 dollars refurbishing said home and sell it for about 230,000 dollars, that’s about 18 to 19 thousand dollars per flip. While that alone may not seem like much, if you make it into your own business, you can flip three to four houses in a year as an amateur. That’s about 45 to 50,000 dollars per year for an amateur flipper.
For a professional who either does the refurbishing themselves or has made connections with professionals, the number of houses you flip can go up to seven per year. That alone will give you a three-figure income. With the current housing market resell prices being as high as they are, this number could go up significantly.
Improve Your Community
One of the unsung reasons for investing in properties for house flipping is that you have the potential to improve a local community. Of course, this boosts the value of the homes around you, but that can increase the average selling price of the community as a whole, including your property. In addition, what was once an eyesore can become a point of interest and can increase foot traffic as well as the general property value.
You can also help a local neighbor who is looking to get a property off their hands for an even lower price. They benefit from getting rid of unwanted property while you can get an even higher return for flipping a cheap home.
Additionally, flipping is better for the environment as it reduces the amount of land and forest that needs to be tilled over by reusing an older home. It also means less material added to your local landfill. Finally, by investing in renovation property, you’re doing the Earth a favor by improving on what’s already there to meet the demands of the real estate market.
Be Your Own Boss
The most coveted reason to invest in flipping house properties is the chance to be your own boss. In the beginning, you have to work your regular job while flipping homes, but you are setting yourself up for a secure future while you work for yourself. If you stay in the business, what was once a side job can turn into your very own company. Plus, your office can be in the comfort of your own home.
Additionally, this is an industry that you can run from your very own home and make your own schedule. Drafting contracts, doing walkthroughs, finding properties, as well as marketing and selling, can all be done virtually with the luxury of today’s technology. If you wanted to, the only time you would have to leave is to work on the home.
Faster Returns
Investing in properties for house flipping provides a faster return. While holding real estate offers a slow and steady income, house flipping is the investment to make if you want a lot of money fast. Once you sell the home, it will be out of your hands.
If you’ve passed the proper inspections, you can be rid of it after the money is in your hands. You’re not tied down to one property and can still diversify your portfolio without having to spread your investment money thin.
A Cheaper Option
If you’re looking to invest in property, flipping houses can cost little money if done correctly. If you’re looking to start a family business, you can pool people together instead of using solely your own money. While your return may not be as high individually, you’ll be able to flip more houses faster than if you were on your own. In addition, you’re making more money if you share the property’s initial cost in terms of a long-term investment.
There are many other ways to secure a funding source without the help of family and friends. Private money loans, hard money loans, and banks loans are all options that you can choose to make the startup cost cheaper.
Using Your Skills
If you’re construction savvy, you can get rid of a large amount of the refurbishing cost if you invest in properties for house flipping. You can renovate the home yourself if you know what you’re doing. While this may take you much longer, you’ll spend a lot less money on refurbishment.
As mentioned previously, the average refurbishment cost shouldn’t be much more than 40,000 dollars for a 200,000 renovated home. Doing it yourself can cut the refurbishment price in half and leave more money in your wallet. If you end up flipping at least one home a year, you can end up with an extra 30 to 40 thousand dollars in your wallet.
Using your construction skills is a great way to make a lot of money on the side if you don’t want to flip three to four homes per year. In addition, it’s a better option if you want to go at your own pace instead of making it your primary source of income. Finally, it’s also a great way to beef up your resume if you’re looking for a higher-paying construction job.
Learn About Construction
However, if you don’t know a lot about construction but still want to refurbish a home, you can learn a lot about construction by hiring professionals or doing it yourself. While this is a significant learning curve, the skills you learn flipping a home can be applied to other aspects of your life, like improving and renovating your own home at a lower price. You could boost the price of your home’s resale value by learning to flip your own home. With time and the proper knowledge, you’ll be able to see whether contractors are trying to give you the slip by charging higher than necessary.
Remember, whether you decide to DIY or hire a professional, you should always hire inspectors to review your work, no matter how experienced you are. That way, if something does end up going wrong after you sell the property, you won’t be as liable to get sued.
These top reasons to invest in properties for house flipping are sure to help you decide whether this venture is right for you. So, start looking at your local properties today. Whether you refurbish, rent out, renovate, or invest in REITs, property investment is a sure-fire way to make and keep money in your wallet. Additionally, if you live in the area, Nashville real estate investment properties have homes no matter what you choose.
