Making money through real estate is a dream for many people. And as the market continues to grow, more and more people consider it a viable field for investment. However, while the popularity of home flipping is on the rise, it seems that profits aren’t going so well for some. According to CNBC, house flips brought an average gross profit of $69,000 for the third quarter of 2021, down 1.6% from the previous year. That’s because many inexperienced investors are trying their hand at flipping houses without knowing what they’re doing.
If you’re considering getting into the business of flipping houses, you must have a solid strategy. Not all flips are created equal, and there are several approaches you can take to ensure that you’re making the most money possible. Here are some of them:
Know your strategy
Flipping houses involves different approaches and strategies. Understanding what your goals are will help you devise a plan to get there. Below are the most popular techniques used in flipping houses:
This strategy involves buying a property, making renovations, and then selling it for a profit. The key to success with this method is to purchase a property at a low price and complete the upgrades quickly and efficiently. It’s a more theoretical approach, as you’re counting on the property’s value to increase after renovations.
When you buy and hold property, you purchase it to make renovations and hold onto it for some time until the value appreciates. At this point, you can sell it for a profit. This method is passive, as you’re not actively relying on the upgrades you made to the property. Instead, you depend on market conditions to do the work for you. This strategy is best for those who are patient and have the resources to wait for the perfect time to sell.
With this method, you find a property below market value, then find a buyer willing to upgrade the property yet pay more than what you paid. You’re essentially acting as a middleman in the transaction. This method’s success is having a good network of potential buyers.
Under this strategy, you find a property, add some furniture, and lease it to a tenant with the option to buy. The tenant then has the responsibility of making all other repairs and upgrades. This method is more hands-off, as you’re not actively involved in the property once you’ve leased it. You can choose this strategy if you don’t have the time or resources to renovate a property yourself.
Add customized furniture
Did you know that most homebuyers decide to buy a property based on furniture? According to a National Association of Realtors report, 61% of buyers are willing to pay more for a home with furniture they love. That is because furniture works as an extension of one’s personality.
You can give potential buyers the impression that they’re getting a one-of-a-kind home by adding customized solid wood bedroom furniture. This type of furniture is an excellent way to add value to a property because it’s unique and can’t be available in every home. You can find great deals on solid wood bedroom furniture from online retailers. These retailers often have a wide selection of furniture, so you’re sure to get personalized pieces that fit your property’s style.
This way, you don’t have to spend much money on renovations yet still add value to the property.
Make energy-efficient upgrades
Energy-efficient appliances and features are in high demand these days. More and more homebuyers are looking for homes with these features because they want to save on their energy bills. Making energy-efficient upgrades to a property can make it more attractive to potential buyers and help you sell it faster.
You can start by ensuring that the property is well-insulated. Doing so will help keep the home cool in the summer and warm in the winter, which will save on energy costs. You can also install renewable energy sources like solar panels and wind turbines. These will not only make the property more energy-efficient but also make it more environmentally friendly.
When buyers see that a property has energy-efficient appliances, they’ll be more likely to make an offer. So, consider making energy-efficient upgrades if you want to sell your property quickly.
The above are some of the strategies you can use to make a profit when flipping houses. There’s no one right way to do it. The key is to find a method that best suits your needs and resources. With the right strategy, you can make a significant profit from flipping houses.