Since the burst of the house market bubble nearly a decade ago, many Americans around the country have seized the opportunity to invest in properties at lower prices in order to turn a profit. House flipping became a major trend around the nation as more people bought a cheap property, invested some money in home renovation projects, and successfully resold the house at a higher price. For every success story however, there is a cautionary tale as many would-be house flippers got stuck with a bad deal and ended up losing money on their investment. For those who think they have the skill, here are some things to consider before you start flipping houses in your area.
The Art of Flipping a House
The first step in flipping a house is to secure a property at a good price; studies suggest that flipped houses were originally purchased at 26% below the estimated market value for the property. Using thoughtful renovations, house flippers were able to return an average gross profit of $55,000 in 2015; this figure represents an average return on investment of 45.8%. More people have recently started investing in the property market by flipping houses after seeing the success of other investors. Statistics show that there were 110,008 investors that completed at least one home flip in 2015; this number is not far from the 130,603 home flips that occurred in 2007 just after the bubble burst. As these flippers would tell you, the hardest part of flip real estate is not finding a cheap house, but instead determining which improvement projects would be best for your project.
Where to Invest Money in a Home
When considering renovations, think about what new home buyers are looking for. Many estate realtors say that new home buyers are considering three factors when looking at a home: safety, comfort, and savings. The “Remodeling Impact Report” found that a new steel front entry door has a median cost around the nation of $2,000 when installed, yet can recover up to 75% of that cost on resale. New windows, doors, and locks are all ideal places to start investing some money; it helps assure buyers that their property will remain safe, giving them a seldom earned peace of mind. The comfort of home buyers is equally essential; many new home buyers are regretful of their new home purchase, as many are cited as saying that they do not feel at home even as many as six months after moving into their home. An updated kitchen or bath is one of the best projects to start — while these projects are indeed more costly, they promise a greater return on investment typically. Up to 82% of new homeowners said that an updated kitchen would give them a greater desire to be at home; ugly and out of date kitchens help push homeowners towards fast food menus. Finally no homeowner wants to spend more money after purchasing a new home; investing in new HVAC infrastructure, plumbing, and other elements to help keep operating costs low is a strong selling point for many home flippers — of course, determining how best to flip a house is another challenge of itself.
Getting the Competitive Edge with Real Estate Investment Software
Budgeting successfully is a difficult process to master; unfortunately for home flippers, there is too much at stake not to get it right the first time. Thankfully there is real estate investment software designed to help house flippers. The flipping software can gain an effective analysis of each real estate transaction; real estate investment software includes demographics based on your region, so you can make effective investments that will guarantee returns. Naturally, different programs will have different features an individual may or may not need, for this reason it is pertinent to look into house flipping software reviews to determine what kind of help one may need to sell a house. With determination, investments, and patience, real estate investment software can help any flipper turn into a real estate mogul.