If you are looking to make a bit of money out of property, you might be interested in a fix ‘n’ flip project. Not sure what that entails exactly? It’s simple really; you simply buy a house that is looking a bit rundown and needs a lot of TLC. These types of houses and apartments are quite cheap to buy as they need a lot of work doing to them. The buyer then takes the time to get the property back up to scratch and looking as good as new. Once the work has been completed, they then sell it on for a higher price than what they bought it for, or they rent it out to some tenants.
Even though these projects are relatively easy to carry out, they can still be quite daunting for those people who have never dabbled in much DIY or home repairs. That’s why it’s always a good idea to take your very first fix ‘n’ flip nice and easy, and only focus on one property until you get plenty of experience behind you and can build up your confidence. Once you’ve done a couple of fix ‘n’ flippers, then you might want to start taking on a couple of projects at a time. You could even go on to make this your full-time profession if you find you have a particular skill for this!
So, ready to take on your very first fix ‘n’ flip project? If so, you will have to remember to follow these all important ten commandments. They’ll keep you right throughout the entire project!
One: Thou Shalt Buy Cheap
One of the first things to remember is that when you are buying your house, you really need to buy cheap. That’s the only way you will be able to maximize your final profit. When you are a beginner fix ‘n’ flipper, you might be tempted to buy a property that is in fairly good shape as it won’t need quite as much work doing to it. But you will find that you won’t be able to increase the value by a huge proportion, no matter how much work you do to it. So, for maximum value increase, always go for a very cheap and run-down property, no matter how much work needs doing to it – you will definitely make your money back!
Two: Thou Shalt Give Thyself Enough Time
One of the worst things you can do while you are fixing and flipping is rush. This won’t give you enough time to complete all the various jobs to a high standard. The finished property will look a bit rough around the edges, and this could make it difficult to sell for your intended price.
Three: Thou Shalt Always Outsource
Even if you have some previous building experience behind you, it’s usually better to outsource some jobs rather than try and take them all on yourself. When you aren’t trying to fit in all the jobs into your schedule, you will be able to take a step back from the project and take on the role of project manager. That way, you can get a better idea of how the project is doing overall rather than only being able to focus on your current task in hand.
Four: Thou Must Learn To Market Well
Think your project is over once you’ve finished the decorating? Think again! You now need to think about selling the property for as high a price as possible. And the best way you can do that is by marketing it well. Your real estate agent will help you with this, but it’s worth using social media and local message boards to try and spread the news about the home as wide as possible.
Five: Honor Thy Real Estate Agent
You will definitely need to hire a real estate agent to help you sell the home and it is really important that you honor them and listen to all of their tips and ideas. They will have been in this business for a long time and will know exactly what it takes to sell a fix ‘n’ flip property. Even if you aren’t too taken with their ideas, it really is worth trying them out for a few months – you might end up pleasantly surprised with the results!
Six: Thou Must Learn The Property Law
When you are doing up your property, you might be tempted to knock a wall down to create an open-plan living space, or you could be thinking about adding an extension to create some extra floor space. However, before you start tampering with the property’s structure, you need to find out whether or not you need to obtain planning permission. If you do, but carry out the building work without gaining permission, you could end up in a lot of hot water. You could be fined a huge amount, or you might even be told to reverse all of the work, which might end up extremely costly! So, before you start your fix ‘n’ flip, make sure you are familiar with property and building laws in your area.
Seven: Thou Shalt Decide Between Selling And Leasing
You’ll also have to figure out whether you want to sell your fixed-up home or just rent it out to long-term tenants. It’s a good idea to figure this out before you begin the project as some of the decorative features might depend on which option you go with. There are pros and cons of both selling and renting, so it’s important that you carefully weigh these up before you make your decision. For instance, if you do rent out the property, you will become a landlord, and will be responsible for taking care of any further fixes and maintenance that need carrying out. If you sell your home, then you aren’t responsible for the property at all. However, if you do rent, at least you will get a regular monthly income.
Eight: Thou Must Not Ignore Thy Outdoor Areas
Lots of fix ‘n’ flipper projects feature one major mistake: the house often ends up in pristine condition but the owner forgets about sorting out the garden and outdoor areas. This can bring down the overall value of the home as it can really damage its curb appeal. So, it’s important that all of the property’s exterior walls are given all the attention that they deserve and any repairs are carried out to them. You will also spend some time gardening so that any overgrown bushes and lawns are trimmed and neatened up. If you have a pathway that leads to your front door, you should make sure that it is well-maintained and any uneven areas are taken care of.
Nine: Thou Must Update Thy Kitchen And Bathroom
When it comes to working on the interior of your home, there are two super important areas that need as much of your effort and dedication: the bathroom and the kitchen. These are the two most important rooms in any house or apartment, and they are what anyone who comes to view the property will be most concerned about. They will want to look in every nook and cranny! So, it’s really important that you ensure that you update the kitchen and bathroom to a very high standard. You might even get away with the other rooms in your property needing a bit of extra work. But, as long as your kitchen and bathroom are fantastic, you shouldn’t have too much to worry about once the house is listed on the market!
Ten: Thou Shalt Not Overprice
There’s one thing you need to do before you do put your home on the property market: get it valued and decide how much you are going to ask for it. There are various factors you need to consider when you are thinking of your asking price. For instance, you need to consider how well the housing market in your local area is currently doing as this will have a direct effect on the valuation of your home. You should also ask yourself whether you want a quick sale too. If so, it’s always good to price your home at a price that is slightly lower than the average asking price on the market. That way, potential buyers will view it as a bargain and will be more likely to snap it up. However, if you really aren’t that bothered about selling it quickly, you can afford to value it at slightly more. Just expect to wait a little longer to sell it! Don’t forget that you’ll also have to spend some time thinking about your asking price for monthly rent if you decide to lease it out.
As you can see, a flix ‘n’ flip project can be a very worthy way to make a bit of extra cash. In fact, many people decide to take part in these kinds of projects just to strengthen their investments. Follow these ten commandments, and your project should go smoothly!