What You Need to be Aware of When Flipping and Renting Properties?
There are several ways that you can make money in the real estate market. You can invest in rental properties or REITs (real estate investment trusts), flip properties, or even rent out your entire home or a small space on Airbnb. While all of these seem fairly easy to do, there are some things that many people don’t realize about these tasks.
Flipping a home, that is buying a home and fixing it up, has the potential to increase its value and make it more marketable. Before the pandemic, more than 6% of homes sold were flipped beforehand. Although it seems like a fairly easy task, it can be a lot more complicated than it sounds. Check CIVICFS for more information about flipping houses.
It costs more money than you think.
The purpose of flipping a property is to fix it up and then sell it to make a profit. To do that, first, you have to buy a property, and this alone can get pretty expensive, depending on where you’re buying and what kind of financing you have.
Once you’ve purchased a property, it’s time to renovate or remodel it before you put it back on the market. Renovations don’t have to be insanely expensive, but they still do cost money. You also need to consider any taxes and other fees you may encounter when you’re the owner of a home.
Flipping homes may require the expertise of a professional.
Not just a professional house-flipper, but professional tradesmen and women. You may need to hire carpenters, electricians, plumbers, and other contractors to help you with some of the major renovations. This also adds to the cost of flipping a house. Some projects you will be capable of doing on your own, but it’s best to leave electric work, plumbing, and roofing to the professionals.
Flipping a house is time-consuming.
Renovations on homes can take weeks and sometimes even months, depending on how much work needs to be done. But finding an actual property can be time-consuming too. You want to make sure that you’re putting your money into something worthwhile, so you don’t want to invest in the first property you find.
When you’ve found the right place and renovations are complete, you still have to have the building inspected to make sure that it meets all requirements. After all of that is done, you’ll be ready to put your property on the market. But selling a home takes time, and you may need to hire a real estate agent to help you sell.
Similar to flipping properties, you can invest in a single-family home to rent it to others. This can cost less, as many people don’t buy fixer-uppers to use as a rental property. But that doesn’t mean that it’s easier to rent out properties.
Rental laws not only differ from state to state, but they also differ from city to city. This is also true for Airbnb rentals, as this type of rental is not legally allowed everywhere. When renting any type of property, it’s important to check the Airbnb regulations based on the city before putting your property on a rental listing.
Consider the location of your rental property.
The purpose of investing in a rental property is to attract tenants, so it’s important to make sure that you’re investing in a property that is in a good market. A good rental market has things like tourist attractions (for short-term rentals), a good job market with growth potential, a growing population, and even good schools (all for longer rental periods).
There’s a lot of potential to make money with both flipping and renting houses, but it’s helpful to be knowledgeable about the real estate market in general. When investing in any project, it’s important to do research to know exactly what it is you’re getting into.