Why New Real Estate Investors Are Flipping Houses

Successful real estate investors look for ways to make easy money in a short or limited amount of time. One tried and true way to build money in a booming housing economy is purchasing a home, living in it, and reselling the property at a considerable profit two or three years later. When the housing market isn’t thriving as quickly, money can be more difficult. That is why real estate investors turned to flipping houses to make money.

What Constitutes a Flip?

A home sold twice within 12 months is considered a flipped home. It doesn’t matter if it was always empty or once filled with a happy family. Buying a home and reselling it quickly is considered a “flip.”

How Did Flipping Get Started?

For decades speculators have been purchasing homes and sitting on them or renting them out for a year or two, then reselling them at a huge profit. Smart real estate investors watched as the long-term speculator made money, then they improved the plan by making the buying and selling of the investment property a short-term deal.

How Do Investors Flip a House?

One way to flip a house is to take a run-down, rot-filled home, completely gut it and fill each room with new, modern appliances. While the project will likely take months of intensive improvements and a large expenditure of money, the house can typically be sold for a large profit in the end.

However, some real estate investors aren’t interested in putting so much energy into one project, so they take the route of quickly flipping houses. By knowing the market and what the buyer wants in different areas for the city, a real estate agent can look for homes requiring little more than cosmetic improvements to add instant value to the property. By fixing a hole in a wall, adding a few plants to improve curb appeal, and updating appliances, the property can gain value and more easily attract buyers.

What’s the Benefit of a Quick Flip?

A home that doesn’t require months of renovations generally won’t carry extensive costs, both in terms of home improvement expenses and monthly mortgage payments. Savvy investors can work on quickly flipping multiple homes at once, potentially garnering a higher total profit when compared to the flip requiring a complete overhaul.

Smart property choices are the key to successfully flipping houses, and real estate investors can be first to find properties easily improved for a big money flip.

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