The real estate business has become a popular source to earn large profits. It is among one of the rapidly growing industries in the United States. There are several small and big businesses to jump into the real estate industry. House flipping is one of the businesses under real estate through which you can earn lots of profits if done with correct strategies and ideas.
What Is House Flipping?
House flipping is a process through which an investor buys an old property at a low price, renovates it, gives it a modern look, and makes it a comfortable place to live. They sell it at a higher price to earn a profit.
It is gaining popularity in the U.S. as it is a lucrative business. If you are bored with the regular 9-to-5 jobs, it can be a great source to earn a living. As per the report, the total earnings House flipping business in the year 2021 is around $68,693 per year that is $33/hour in the U.S.
How Do House Flippers Earn?
Do you want to make one million dollars through house flipping? You can surely give it a try. The house flippers aim to buy at a low price and sell at a high price to earn large profits. In 2017, 5.7 percent of the houses were flipped. It increased with a high speed by the 1st quarter of 2020 by 7.5%. It slowed down by the end of 2020 and was at 5.9%. It was due to the rise of the pandemic. It also raised whether flipping a property is a profitable business or not in 2021.
House flippers can earn profit by :
- Following the formula: The purchase price should be a maximum of 70% of the after-repair value (ARV) after subtracting the renovation cost. It can exceed 80%, keeping in mind the increasing market value.
- Limiting the timeline: Keeping your timeline at a limit helps you increase your profit by selling the property within the time limit. It also allows you to move to the next project faster. Most flippers set their limit for three months to buy, renovate, and sell a basic project. For more significant projects, This may exceed five months.
- Following the latest designs and trends: While renovating the property, It is essential to follow the latest designs and trends to make it appealing in the market. At the same time, you have to take care that you don’t overdo it. Make it neutral to attract more buyers. It’s tough to balance these two, but it can lead to large profits if done correctly. Renovating also focuses on what the neighborhood demands.
How to Renovate a House to Sell It for the Best Price?
People are in love with interiors. They want their house to look the best. Renovations have risen 15% in the last year, and the average has reached $15,000. There was a visible increase of $85,000 in higher budget projects in 2020.
To sell the house at the best price, renovate the home focusing on the trends. Some ideas are as follows:
- Groom the Garden or Balcony: Uniquely renovating the garden can add up to 5% to the sales price. Decorating the garden with beautiful vases and growing Kikuyu grass can increase the house’s curb appeal.
- Focus on the Bathrooms and Kitchen: A house has many rooms, but a large number of sales depend on the kitchen and bathroom. Both should be attractive. All the fixtures and fittings should be modern. Due to the pandemic, the demand for touch-less faucets has increased. Walls with beautiful wallpaper are always an advantage.
- Keep the Windows Attractive: Focus on the windows of the house. The look of the home largely depends on the window. The windows should have nice shades, simple mini or wood blinds. It can help you generate sales faster.
- Add a Gym: Due to the pandemic, the trend for the gym at home has spread widely. People are becoming more health-conscious and want to work out in their leisure time. So a room dedicated to the gym can be an add-on to increase sales.
- Choose Wood Flooring: This can mark a good impression on the buyers. Wood flooring has become the 1st love for the people. Replacing dirty and poorly colored flooring with wood flooring can be a good option.
Just changing the wall paint can increase the value of the property by 5% to 10%. So think properly. If you renovate a house adequately, follow the modern trends, and satisfy your clients’ needs, this can take your house flipping business to another level and result in large profits.