Fixing up a house and selling it can bring in income if it's done correctly.
In the right economic environment, house flipping can be a profitable undertaking. Buy a house at the right price, make some basic cosmetic improvements, and sell it for a profit. This works if home prices are appreciating, and you keep your fix-up expenses minimal. It can be disastrous if home prices are stagnant or depreciating, and you wind up with a house that you can't sell. Before you venture into what could be a risky business, do your research. And try to do much of the work yourself to keep labor costs minimal. Does this Spark an idea?
Instructions
1. Research the real estate market in your area to check out houses that are for sale, what the sellers are asking and how long it takes to get an average home sold. Look at real estate listings, go to open houses, and tour model homes. Know your market. Look into short sales and foreclosures, but be aware that these purchases can take longer than others, depending on the bank that's giving the OK.
2. Look for homes that need predominantly cosmetic work. A house with peeling paint, a dirty interior and an odor in the basement can usually be fixed relatively cheaply. Conversely, a nice-looking house with foundation damage or plumbing problems can require thousands of dollars in repairs and may not be worth the investment.
3. Find a lender that will approve you for a home loan. Know exactly how much you qualify for, and only accept terms that you can afford. Keep in mind that if the house you're flipping doesn't sell right away, you may have two mortgages to pay. You may even end up renting the flipped house. Secure your loan approval prior to negotiating a house price. You will be in a better leverage position, because you have money to put up then and there.
4. Purchase the house. You will already have the loan approval, so you will just need to fill out the legal paperwork and complete the transaction.
5. Fix up the house by painting, cleaning the carpets and floors and eliminating any odors. Use neutral colors, and focus on the kitchen and bathrooms to get them looking new and clean.
6. Have your house appraised and inspected once you have it fixed up and are ready to sell. Consult with several real estate agents to get recommendations on a listing price based on what similar houses in the area are going for. The right price is key in getting the house sold. List the house yourself if you have the time and expertise to get the property sold.
7. Set your asking price and start showing it to buyers. The asking price needs to be higher than what you paid for the house, because you need to pay off the mortgage before you can turn a profit.
Tags: real estate, asking price, home prices, house flipping, house with, loan approval, right price
