Many people have a natural sense of pride of ownership when it comes to homes. That’s a great characteristic that will serve you well as a home owner, renovator and investor. But that being said, to be successful in flipping requires a firm grasp of one very simple concept: flipping means business.
Here are some tips related to the business of home flipping.
- Keep your unique design preferences at bay. Your design preferences must be secondary to common sense, speed of finishing and – always – budget. Maybe you love bold colour schemes and that’s great for your home – but a very neutral, understated decor will almost always be more advantageous when flipping. You may think beige is boring, but remember you don’t have to live in the house you flip: you just need to sell it, and do so as quickly as possible.
- Resist the urge to go with custom finishes or items that require special ordering. There is almost always a faster and more-or-less equivalent to items that require special ordering. A huge aspect of flipping success is the ability for the investor to turn that property around and sell it quickly. Avoid the urge to order anything that isn’t readily available.
- Embrace the pursuit of the bargain. Even if you are flipping a very high-end home, you must be committed to finding deals. Splurge when and where it makes sense – finishes in kitchens and bathrooms, for example – but be committed to saving everywhere possible and searching for creative and inexpensive alternatives. Paints on sale, carpet remnants, and even the occasional ‘scratch and dent’ sale are the kinds of things to consider.
- Gain a complete grasp of diminishing returns. Often, sellers have over-spent on some items and can’t understand why buyers don’t want to pay them dollar-for-dollar for their renovation extras. The concept of diminishing returns is something that every renovator needs to understand. Will I get a good return on investment for this? That question needs to be asked over and over again when making decisions on how to spend renovation dollars. If you are unsure what renovations tend to yield the best returns on investment, consult a Real Estate Agent.
- Don’t forget the importance of Staging and marketing when it comes time to sell. You’ve renovated a house and you’ve done a fantastic job. Now, it will sell itself, right? Well, not likely. Plenty of people are flipping homes, so you’re in competition with other sellers. And in case you haven’t noticed, home buyers are extremely demanding these days. As part of your overall flipping budget, plan for Staging your home. I’ve hosted many open houses with empty homes and most buyers struggle to visualize how their furniture will fit, etc. It’s not the best way to showcase a reno. Next, interview Real Estate Agents and find someone who has a strong plan to market your home aggressively – getting the home you have flipped maximum exposure and aiming for a quick sale – another key factor in successful flipping.
Read more of my blog posts about flipping homes.
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