Flipping homes is one of the easiest ways to make money in the real estate industry. Typically, you purchase an undervalued home and sell it for more than you bought it for. Read the extract below to learn how to flip houses at a profit.
Conduct some research to identify the following;
- What types of properties are in demand? It will help you determine the kind of houses you should invest in.
- What are the current trends in the real estate market? For instance, buyers today may be more concerned about the building's energy efficiency, availability of modern appliances and the flow of light inside the building.
- What are the high and low seasons? Homes are cheaper during the low seasons. They are easier to sell during the high season.
- How much do building materials cost? This is a vital consideration if you intend to purchase and renovate run-down homes.
A conveyancer will help you conduct due diligence to ensure the purchase does not lead to future liabilities. For instance, take a situation where you purchased a single dwelling in an area zoned for commercial buildings. The conveyancer will conduct a title search to ascertain the title name and lot number. He or she will use this information to research if the property is located on riparian zones or if the land is contaminated. Further, the conveyancer will identify zoning regulations and strata title restrictions. He or she will also ensure that the owner has permissions like renovation and swimming pool licences.
You may not have instant cash to purchase the property. If this is the case, your conveyancer will help you evaluate your financing options. These include;
- Refinancing your mortgage to access a line of credit.
- Taking out a bridging loan that allows you to combine two mortgages.
- Hard money loans, especially short term loan designed for property flippers.
- Private lenders, who give short term loans at a small interest.
A real estate agent will help you sell the property. The agent will advertise the property and organise home visits. He or she should have reasonable terms and conditions. Avoid agents that demand a small cut if you sell the property through other channels. Remember, the primary goal of flipping homes is to sell the property to the highest bidder in the least possible amount of time.
Flipping homes should be an easy task with the above tips. Conduct some research, observe due diligence, check your financing options and work with professional conveyancing services.