Property flipping may not be for everyone. Sure, it's tempting to get into the trend especially when everyone who's been successful would say it's a great way to earn quick money. But then again, some people believe that money earned quickly also vanishes like a bubble. So if getting quick buck is your only goal, better think many times before you try property flipping.
Not all people who've been successful in flipping homes have remained long in this kind of business. Some only had their days of euphoria for a short time while those who were not careful enough also experienced money problems in their personal lives.
If you're contemplating on trying it out, just remember that you need to study the housing market in your area. If home prices in your area are fast appreciating, good for you because you can make good money. However, in areas where the housing market is cooling, you really have to know your market.
To be successful in flipping homes, learn more about the experiences of other flippers including those who made it big and those who were not lucky enough. You need to avoid the mistakes that they've made in order for you to reap good profits. Here are some common mistakes to avoid.
1. Financing the whole property through your personal funds . Keep in mind that using your own private money will not always guarantee big profits for any home that you flip. It's best that you apply for loans to use in your home flipping venture.
2. Rushing things is never good for any endeavor . What you should do then is to decide everything including how you are going to proceed before you purchase a property you are planning to flip. Good planning helps.
3. Keeping the property for too long . Do remember that house flipping gives the best profits when the home concerned is resold at the shortest possible time. The longer you hold the property, the more costs you are accumulating.
4. Setting the selling price before buying the property . You should know that the housing market is never constant. Home prices fluctuate from time to time so avoid holding a fixed price for long before deciding to drop it. If your property is in a hot market, you can get a good price without even negotiating.
5. Paying too much for the house . Sometimes, home owners who need to sell their property quickly may still ask for financial assistance from their buyers. Some home flippers who are too eager to flip the house, in turn, are tempted to help the owners at their own expense.
6. Not having enough cash . You need to have your own money to pay for the monthly mortgage of the house you're flipping. If you've spent your funds in renovating the home, you're likely to encounter financial and credit problems.
7. Quitting your job . Home flipping will not guarantee you regular income. It might give you huge profits but then, it's not always that you will earn the big buck quickly. It's still best if you have a regular job that can provide you regular income for you and your family.
8. Hiring an unlicensed contractor . Before you have the house renovated, always check if the contractor you got is licensed. Otherwise, you will just be spending more for the work.
9. Not inspecting the house before buying . When buying a home, even if you're not planning to live in it, make it a point to personally check the interior and exterior to see what repairs are needed.
10. Underestimating renovation costs . If you're not sure about the repairs to be done, have someone you know estimate the costs together with you. Avoid doing all the work yourself. Two heads are better than one, remember?