Real Estate at New Trader U

This is a Guest Post by Selena of the website: http://alexanderandco.co.uk/

One of the best ways to make money on a real estate investment is by house flipping. House flipping is a method in which you buy a house which needs a little bit of fixing or touching up, and then reselling this house for a profit once it has been fixed. Essentially, buy, fix, flip and sell. It is important to remember that house flipping can be a very risky investment. You could end up losing money if the fixing costs more the expected, and the worst case scenario – if there are no interested buyers for that property. So, here are 4 things you must know before flipping your first house in 2018.

1.Know your costs
Let us assume you buy a house for X amount and you are hoping to re-sell it for 1.5X. Don’t just think about the cost of buying; consider all the costs that are involved in house flipping. First, you need to pay the property agent for buying the house. Then you will have to spend money on fixing, furnishing, retouching and more. After that, you will have to schedule inspections and pay property taxes. This whole while, you will be paying an interest on your mortgage value. Know exactly how much you need to spend to flip the house and how much you will make as profit before making this investment.

2. Time is a factor
The main thing about the real estate investment market is timing. You will buy a property in an area which is hot at that moment. But house flipping takes time. It takes time to hire contractors, finish fixing the house, setting up inspections and getting the seal of approval. Only after that can you think about reselling. In this situation, if it takes too long to flip the house you might not find too many buyers who are interested anymore because some other neighborhood is hot in the market now. Always factor in how much time it will take to fix the house – is that worth the profit? And, in a volatile economy, will you make a reasonable profit?

3. Have the knowledge
If house flipping were that easy, every person would be investing in house flipping instead of just buying property. You need to have enough knowledge to successfully flip a house and make a profit. You need to understand the zoning laws and building regulations of that area. Do you need a permit to construct in certain areas and at certain heights? What is necessary renovation and how much renovation can be avoided? How much should the contractors charge you? Make sure you have enough knowledge about house flipping and the involved factors before you buy a house to flip.

4. Know the potential market
You might see a house for X pounds which you think is a steal. You will buy it, invest money in fixing it and put it up for sale for a price which is just 30% higher. But you need to consider your potential market. You might have found a basic house and turned it into something livable, but your price might be out of the potential buyer’s budget. Understand the market and how much people are willing to spend to buy property in that neighbourhood. You don’t want to buy and flip a house just to be stuck with it because your selling price is too high. You also don’t want to lower your price to make a negligible profit. Understand the market and the buyer before you buy a house to flip.

London based Professional writer who loves to share my knowledge about the latest trends and investment techniques in the local real estate market which helps home buyers and sellers.