It’s amazing what you can learn from reality TV sometimes. Reality TV has evolved from the days of rat-eating and bungee cord jumping to nowadays when reality programming stands to deliver valuable information to their viewers. Let’s take for example the A&E TV series called “Flip This House”. The show is about real estate developers who purchase houses with the sole intent of renovating them in order to sell home fast. A good buy is always of interest to someone who can buy houses quickly. To someone who is considering going into the business, just a few episodes of the series can disseminate some very valuable information about the business. Some of the tips I’ve learnt are as follows.
Make sure you have enough cash to finish the project even if this means taking out a loan. You don’t want to have all your money tied up in a stalled project with no end and no return in sight. Don’t take on too big a project and make sure the money you have can see it through all the way to the end.
Know what to expect. The goal of flipping a house is to make a profit. What gain will it be to someone if they spend thousands of dollars to flip a property and make a loss on the sale. Know what the value of properties in the neighborhood is. Keep track of the going prices and get to know your chosen real estate market.
If your house is going to sell for big, it must look good from the road. An important contributor in looking good from the road is the landscaping. Flowerless, shrubless dwelling places with browning lawns do a lot worse on the market than front and back yards that are sufficiently green and vibrant. And so a rule of thumb is the green thumb rule. Allot 8-10% of your real estate flip budget for landscaping, but don’t go overboard. Simple and well-manicured is best.
Two things that home buyers are very interested in are appearance of the kitchen and bath. Dated and dingy-looking kitchens, bathrooms and fittings will put a serious dent into your profits. Opt for newer fixtures. Replace old bath tubs and purchase new vanities. Refinish counter spaces and kitchen sinks and re-tile if necessary. A little money spent in updating those two very important areas can mean big profits of closing day.
Lastly, learn from each sale. There are valuable lessons to learn along each stage of the journey from purchase to sale. Make sure to learn from your mistake and repeat your good decisions.
