How to Profit from
Buying and Renovating Properties
home selling articles and tips
Renovating properties is a huge thing in today’s world! From reality TV shows and fictional characters doing it in the movies to your next-door neighbor deciding he might give this new trendy thing a shot. The reason for such a popularity is quite simple – buying and renovating property looks so effortless. At least when you see it on TV. You buy a house, renovate the bathroom and the kitchen, purchase new furniture for the living room, fix what needs to be fixed, maintain the garden and voilà – your property is ready to be sold for an enormous amount of money.
In reality, flipping houses, and properties in general, is not as easy and it does require quite a lot of planning ahead, making projections, consulting professionals and taking close care of the budget. In order to do it successfully, you have to follow certain steps and here are several tips that might make this task easier to handle.
Learn the Basics
You can do no job completely on your own, especially when it comes to construction and real estate-related tasks, nor can you do it if you are a complete layperson. That is why you should gather knowledge of this subject before going into buying-and-renovating business. Luckily, there is a great deal of e-books and webinars all over the Internet, usually held by experienced renovators who can teach you a lot. Furthermore, you can watch some of the most popular home renovating TV shows that will give you a new perspective on this matter.
Assemble a Crew
Another important thing is to form a crew of people who you will work with. While you can search for a property on your own – even though you might want a professional’s tip here as well – you should definitely not go into buying and renovating alone. Assemble two teams: one including lawyers, real estate agents, accountants and building inspectors, and the other consisting of architects, builders, contractors and interior designers. Only with such a crew will you be able to do your job well and expect success.
Make Projections
Nobody goes into this business because they want to smash, destroy and rebuild houses for fun, but because they expect to get paid and make a living. That is why you must make a detailed financial plan for the next five or ten years and know for sure what you expect from this career. Think about how much money you are willing to invest, how much you wish to make, how many houses you want to flip yearly, etc.
Decide When to Demolish
A very important segment of a renovation project is knowing when to renovate and when to demolish the property and start from scratch. You can try to make something out of nothing, but it does not work all the time. In a recent chat with my local demolition contractors, I found out that it is better to tear down an old house in poor condition – or at least some of its parts – than to invest in the renovation. Finally, it is more profitable, too.
Determine the Budget
The most important part of financial planning is determining the budget and making it as tight as possible. Remember: the less money you allow yourself to spend, the more you will earn. Of course, set aside about 10% for unexpected costs, just in case, but do not forget to squeeze every penny. This does not mean that you should do everything on your own – from paint jobs to fixing the roof – but know your limits and do as much as you can in order to save more.
Get Into It
After all of these preparatory moves, it is time to start buying, renovating and earning cash! Select a specific area you know well, investigate properties that are on sale and start choosing. Once you have found the perfect house, negotiate the buying price, determine what needs to be fixed and look for buyers.
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