Do you know how to fix and flip houses for your own profit? Here are some important tips on fixing up a house in order to sell it at a higher price.
Before buying a fixer-upper house to invest on, you need to know about the specific repairs and improvements you must make on it. There are some simple rules that you need to abide with where you can compare the possible fixes.
Return on Investment
A good example of repairs and improvements that will not give a profitable return on investment is when you do a kitchen remodeling worth $40,000 but the whole improvement just added $10,000 to the total value of the house. You’d be very disappointed when this will happen to you too.
For upper-fixer houses, do the repairs and improvements that can give the most return on investment. You must goal for a three-to-one return on the improvements done on your fix and flip houses. If you are planning to resurface the driveway for the amount of $1,000, then you must raise the total value of the house by $3,000. If you really want to invest safely in this business, then always keep in mind the three-to-one formula even if you are just guessing the value of the property.
Small Fixes for a Fixer-Upper
Putting new curtains on the fix and flip houses can’t increase the estimated value of the property. But what you can actually do is bring together all the small repairs and improvements you want to make and vision out in your mind the new appearance of the house when these are done. Then it is now the right time to make an appraisal if you can really increase the total value of the house just enough to justify the cost of your investment.
Usually, the small repairs done on the house will bring the most return on investment for your fix and flip houses. Examples could be flowers on the porch, new mailbox, trimmed trees, and a raked yard. These things give out good first impressions to the potential buyers. Remember that first impressions will always last.
Other example of small investments that pays back good return of investment are new shelves, new switch covers, new doorknobs, a birdhouse, curtains, new light furnishings, new faucets, new rocks on the outdoor paths, and of course, general cleaning.
Big Fixes for a Fixer-Upper
Under this are the functionality of the basic systems of the house like kitchen, bathrooms, bedrooms, and carport. You must be creative enough to make some improvements for you fix and flip houses that would still come under the three-to-one rule. An example would be putting up a wall worth $1,000, which results to an additional value of the house for $8,000. This is really a good return on investment for anyone on the business.
Improvements on the bathrooms and kitchens are significant. To profit from your fix and flip houses, you must look out for improvements and changes that are valued universally and make sure that it will give you an appropriate return on investment.