Agent Erin: Getting The Most From Your Flip
by Real Estate Sales Representative Erin McIntyre
I love watching HGTV, don’t you? It’s the same story over and over: two savvy real estate investors buy the worst house on the block and turn it into a stunning, well-designed masterpiece in order to turn a HUGE profit! What’s not to love!? And if you’re like me, you’ve probably considered flipping a home, putting in some sweat equity, and then re-selling for a little extra cash in your bank account. But you’ve got to go into that kind of a transaction with your eyes wide open, well-aware of what is going to give you the best bang for your buck so that your Flip doesn’t turn into a Flop.
LOCATION: First and foremost, you’ve got to choose a good neighbourhood for your flip. You can renovate a house and make it look phenomenal, but if it’s in a terrible location nobody is going to want to buy it. Consider things like the school district, neighbourhood traffic, comparable homes that have sold in that community recently, and the general “feeling” of the area! Go with your gut: would you want to live there with your family?
INVESTMENT: Again, I strongly suggest you look at comparable homes in the area and what they’ve sold for. You don’t want to sink your life savings into renovating a house, and then not be able to recoup those expenses when it comes time to sell your flip. Never put more money into a home than it’s worth. This includes ensuring you get a credible home inspection done to make sure it’s not a money pit. Inevitably you will find surprises behind the walls that the inspector couldn’t see, and they will require fixing. Plan accordingly and add some cushion to the budget! Remember: drastically overspending on a flip in an effort to “WOW” people can be a recipe for disaster – choose your finishes wisely. Not every flip needs marble countertops and travertine floors!
HIRE A REPUTABLE CONTRACTOR: You might be quite the handyperson, but there are some jobs you should still hire a professional for. It might look great to knock out walls and create a fabulous open-concept floorplan, but if you take out a load-bearing structure, you’re not only endangering yourself, but you’re endangering the buyers who will one day live in the flipped home. Trust me – hire a contractor to ensure things like structural changes, electrical changes and plumbing are all up to code. While we are at it, don’t skip out on getting the permits! Buyers like to see that all renovations were done to code and that means periodic checks with the local building inspector.
SPEND IT WHERE IT COUNTS! Let’s face it, the market is really competitive! So more often than not, it’s the kitchen and the bathrooms that sell a flipped home. A lot of buyers don’t want to be bothered with large kitchen or bathroom renovations, so if you can do that work for them, your home will attract more interest! Not every kitchen or bathroom needs a complete gut-job, but almost all require some updating. For example, look at the existing kitchen cabinets. Do they need to be replaced, or can they be refinished, refaced or painted? Perhaps they only need some new hardware to freshen them up. Remember that you want your choices to be appealing to as broad an audience as possible, so think: neutral paint colours throughout the home, simple tiles, white bathroom fixtures, etc. You don’t want to impose your own personal style in your flip as buyers will have trouble imagining themselves living there. Keeping things neutral means buyers will feel your home is turnkey ready and they don’t need to make any changes before move in day!
HIRE A REALTOR®! Obviously! When you’re done the renovations, hiring a Realtor® will ensure your flip is given maximum exposure to as many buyers as possible. Our team will provide you with professional photography and video tours of the home, advice on what the list price should be, and a strategic marketing plan to get that home sold and the equity in your pocket! Then it’s on to your next flip!
So there you have it – a crash course in flipping homes to get the most bang for your buck!