Many Americans have made a profit purchasing older homes, renovating them, and reselling them on the market. While it looks attractive to create a secondary income, it can be risky. Before bidding on a mid-century modern fixer-upper, it takes solid research, preparation, and knowledge to navigate the world of real estate.
Along with building key relationships, knowing the ins and outs of the industry is essential. Here are the pros and cons of fixing and flipping houses.
Pro: Potentially Lucrative Opportunity
One of the biggest motivators of flipping properties is the profit potential. Many factors can play into the gains of your project, such as the location, the market conditions, and the materials used. As an investor, you must research your prospective properties. This way, you will know if it’s worth the financial risk. When you select your properties, schedule a tour with an inspector and contractor before making any commitments.
Con: Unexpected Expenses
If you’ve ever watched any home improvement shows, you should know that there are always unexpected expenses. There’s a chance that you will have to pay extra fees out of pocket because of things such as rotting wood or environmental interruptions. If necessary, you should look into the rehab loans available to you. That way, you’re not spending above your initial budget.
Pro: There’s More Flexibility
Another pro of fixing and flipping houses is that you have more control over your investment. Whether you want to invest with friends or by yourself, you can decide how much time, effort, and money you put toward the project. You can also flip any type of property you want!
Con: Requires a Lot of Time
That said, the more thought and research you put behind the scenes, the more likely you can profit. Flipping houses may take more time than you expect. It requires your full attention and can feel like a full-time job. If you don’t have enough time to devote to your property, having a working partner is best.
Now that you know the pros and cons of fixing and flipping houses, you can make the best decisions. With patience, time, and research, you can renovate the top-selling property!
