4 Things You Need to Know About Flipping Houses
Residential real estate investors benefit from the appreciation in value that continually builds equity, increasing their wealth over the years while benefitting from the monthly cash flow of rent collections. In addition, well-diversified portfolios protect against a downturn in any one sector of the market and also build a hedge against inflation, as rental rates tend to keep pace with increases in the cost of living.
Most investors begin with flipping, purchasing a house at a price that leaves room for instant equity after repairs are complete. So read on as we explore four things you need to know about flipping houses.
Investing in real estate requires planning and following a proven strategy, when done right, thus allowing you to increase your holdings quickly. For example, many investors have successfully followed the BRRRR Method of flipping houses, buying, rehabbing, renting, refinancing, and then repeating the process. The long-term value of a property is a crucial factor to consider when narrowing down your candidates. In addition, you’ll want to seek out properties in neighborhoods with low crime rates and good schools, offering local conveniences such as parks and nearby shopping and business districts. It’s also advantageous to be aware of any plans for improvements or changes to zoning that could positively affect the area in the future. Highly seasoned professional home buyers can help you zero in on the right area; they’ve built a career investing in local real estate.
Assessing your skillset is essential when you become an investor utilizing the BRRRR method to build your real estate investment portfolio. Above and beyond protecting your property through proper accounting and building management, it takes people skills to navigate the day-to-day duties of a landlord. Something else you need to know about flipping houses is that no investor has succeeded without the help of others, it genuinely takes a team to make the dream work, and that communication is the key to success. When investors need to move swiftly on a great deal, it’s essential to work with reliable industry pros, from plumbers to electricians, so you can rely on their estimates for costs and how long they’ll need to complete the job. Then, with a realistic budget and timeline, you can run the numbers and choose the most profitable investment property. Professional home buyers have built vast networks and brought the most sought-after professionals as their in-house, on-call team, ready to jump into action for investors like you.
The next thing you need to know about flipping houses is that you’re now in the business of real estate investing, which is all about the numbers. Once you’ve decided where to look, it’s time to seek the features that make the property the best available location in the neighborhood. For example, properties with water frontage or views are highly desirable. Finding the right property takes an intimate working knowledge of real estate, including the red flags to watch out for when inspecting investment property. Professional home buyers are happy to show you the ropes, helping you avoid money pits so you can have the best possible experience as an investor, earning the highest possible returns on your investments. You’ll want to find the most affordable property that fits your goals in the best area you can afford while leaving room in your budget for the unexpected. Not only do you save time and money by working with professional home buyers, but you’ll never pay commissions.
Another thing you need to know about flipping houses is that your skill in property management will determine the overall returns you earn on the investment. For the best outcome, you need to hit the ground running, from marketing to tenant placement, routine maintenance, repairs, and rent collections; each is as important as the other in the wheel of property management. When you work with professional home buyers, you’ll benefit from our investor mentality and the years of experience of our property management team to help you with some or all of the tasks of managing your properties.