renovatorTelevision renovation shows have made the world of fix-and-flip investing look glamorous and exciting. In many ways, it can be. Yet buying a property, fixing it up, and selling for a profit comes with a degree of risk. To get the best and make sure the work goes to plan, you need to know the common mistakes many investors fall into. Below, we discuss the most common mistakes made by fix and flip investors.
Not Moving Plans Around
Fix and Flip is about renovating and then selling. But there are plenty of things that can happen on the way to the final goal. Finances, personal circumstances, problems with the property itself, and the wider market can all derail your plans. Therefore, to get the best results, sometimes it pays to change the expectations.
This may involve keeping the house for rental purposes. An example of this would be in a market like the one currently in the UK. Properties are not selling but the rental market is on fire. If a property has a great yield, it would be a perfect time to rent it out, let the property go up in value, and sell it later.
Likewise, if a property is too much work or the cost is too high, and the renovation stagnates, consider offloading it and starting on a new project. A great company for this is We Buy Any Home, which can have the money in the bank in as little as seven days. You may break even and be able to start afresh on a project that is smaller and more manageable.
Lack of Research
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A lack of research is the first element when it comes to successful fixing and flipping. This can be broken down further into two distinct areas: The property itself and the wider market.
With the property itself, make sure you get a full survey done before you buy. All houses will have some secrets hidden away that are bound to rear their head during the renovation. The trick is knowing this is likely to happen, planning for it, and having a contingency to deal with it. When you know more about the property and what is wrong with it, it is more likely this contingency will be considerably lower.
When you look at the market in general, make sure you know if it is a buyer or seller’s market. A buyer’s market means there are lots of properties and few buyers. This is a great time to get some bargain properties. The opposite, a seller’s market, is when there are lots of buyers but few properties, increasing demand. The best time for fix and flip is when you are in a seller’s market, as the demand for properties is much higher and you will be able to sell it quicker.
No Timeframe
Creating an achievable timeframe is vital. I not, projects can run on and on. When this happens, they slowly eat into funds and before long the renovation can be a huge financial burden. Make sure you plan everything accordingly and have a completion date set.
These tips should help you have a successful renovation. While the property market is quite stagnant, you may be able to get some deals that grow in price over the next year. Never underestimate the work involved, stick to a budget and it will soon reap rewards.
