It can be difficult to figure out how to grow your money. There are just so many ways to do it. Investing in stocks, starting a side hustle, opening a time deposit, etc., are all viable ways to make more with what you’ve got instead of just letting your money sit in a bank account. The key to making real and tangible gains is to figure out what approach you’re comfortable with that works for you.
If you’re a handy kind of person or have a flair for decoration, then maybe you should consider house-flipping as a source of income. House-flipping is a type of investment strategy where you buy a property to increase its value to resell it quickly afterward. Basically, you buy a fixer-upper, make it nice, and flip it for a tidy profit. Here are a few things to keep in mind to get you started.
Skills are Important
Many people who flip houses are skilled professionals like carpenters who do it as a side hustle. These people have the knowledge and skills to know what to do to increase the property’s value and can do it themselves. This way, they decrease the amount of money they need to invest in the house and replace the cost of hiring workers with sweat equity.
If you’re interested in getting into house-flipping as a source of income, then it can’t be understated how important it is that you learn how to assess a house properly. All houses have issues here and there, but the real art is knowing what fixes to prioritize to most efficiently get the place in selling shape.
While the idea of buying and selling a property can be appealing, never forget that flipping real estate is an inherently expensive line of business. You need to be comfortable investing large sums of money or have good credit to fund this kind of venture. While buying foreclosed properties can make it easier on your bank account, never expect to get anything for a song. If it’s too good to be true, it probably is.
There are many ways to fund this line of business, with paying out-of-pocket being preferable. You incur less debt and don’t have to pay interest this way, but you still sink a significant portion of your assets into the property, and that comes with its own risks. Taking out home loans is also an option but keep in mind that if you do so, that only the interest on the loan is tax-deductible.
Keen Eye For Detail
To actually make a profit off of the property you buy, you need to plan how exactly you’ll improve it. Vague notions of just updating the fixtures and making it look “nice” just won’t cut it. If possible, try to tie all the fixtures and the house’s aesthetic together to make the place look coherent and well-thought-out.
Making sure that the place won’t require much maintenance after selling it is good too. Many buyers will ask about the condition of major parts of the house like the roof or the HVAC system, so make sure that while you’re having work done, you nip these potential problem spots in the bud to assure your buyers that the place is in good shape. This will help you build a name for yourself and negotiate for better selling prices.
You Need to Be Patient
Despite all the TV shows showing how quick and easy house flipping can be, in reality, it is anything but. Selling houses isn’t easy, and fixing them is even less so. It can be tempting to slap on a fresh coat of paint and do the minimum amount of work to make the house presentable, but not properly addressing the property’s issues will bite you in the long run.
Be patient, and take it slow. Do as much research as possible on every property you buy and go into negotiations armed with all the information you can get. While it might seem tedious, it’s your money on the line so caution is vital. Don’t make impulsive buys on super sweet looking deals. At the end of the day, you need to make sure that you make smart decisions that protect your interests from anyone looking to cut into your margins.
Do Some Networking
Reach out to friends and family to see if they know anyone who can do the work you can’t. You’ll need a trustworthy list of skilled workers to work on your properties after all. While it’s tempting to do everything yourself, there are some times when you need to give in and admit you need help. Having contacts for different skill sets can really help you out when you’re in a bind.
Make sure to take good care of your contacts too. Don’t try to shortchange or swindle them. Cutting corners really only hurts you and your reputation in the long run. If you find a skilled worker you get along with, cut mutually beneficial deals with them so you can rely on them to do good work for you later on. After all, in an expensive business like this, it doesn’t pay to be cheap.