With the continued success and popularity of HGTV-style property shows, more and more people are considering house flipping. Essentially, they buy a fixer-upper property, fit it up and make improvements, then sell for a profit. It can be a reasonably lucrative property investment strategy that can be simple enough to replicate. However, there are many risks involved so it is essential to get prepared before you can succeed in flipping houses.
Do Your Market Research
Before buying a property to flip, you will need to conduct thorough research on your local real estate market. Create a detailed list of property values, demand, and trends, consulting with an experienced local REALTOR® for expert advice. Keep an eye out for emerging neighbourhoods with potential for growth to maximize your return on investment.
Set a Budget
As with any real estate transaction or property investment, it is essential to set a budget before starting your search for a house to flip. Determine what you’d be comfortable spending on the purchase itself, any renovations, and carrying costs associated—taxes, utilities, insurance, etc. This will help keep you focused during your search and prevent you from overextending yourself financially.
Find a Profitable Property
With the market research and finances to shape your criteria, you’ll then want to focus on finding a profitable investment property to flip. If you are new to flipping houses, consider starting with a smaller property. This will help you gain experience without taking on excessive risk. And before making an offer, consult with your real estate professional to assess the property’s potential resale value after improvements. Ensure there is enough profit margin to make the investment worthwhile.
Once you have found a property to flip, it is time to start the renovation process. Focus on cost-effective renovations that yield the highest return on investment, like kitchen and bathroom updates. Build a reliable team of experienced professionals, including contractors and inspectors, and communicate your timeline and budget to them to avoid overspending.
When the renovations are complete, the only step left in the house flipping process is the sale. While it can be easy to get excited about turning your investment into profit, it’s crucial to play it smart when selling an investment property. Keep up to date with the current real estate market trends to avoid listing your property during periods of low demand and value. This is where a trusted real estate agent can be particularly helpful—not only in timing the listing, but creating a solid marketing plan to maximize exposure.
Be prepared for the possibility that the property may not sell as quickly as expected. Have a backup plan in case you need to rent it out or keep it in your investment portfolio longer. And when offers do come in, don’t be afraid to negotiate and be willing to walk away if the numbers aren’t working in your favour.
Flipping houses requires hard work, dedication, and a solid understanding of the real estate market. But with realistic expectations and smart strategy, it can also be an incredibly rewarding property investment strategy. For more information or to discuss flipping houses in the Saskatoon real estate market, contact me today!