Four Costly Repairs To Watch For When Flipping Houses
Home flipping is the day trading of the real estate markets. Practitioners buy up cheap and often somewhat dilapidated houses and turn them around for a profit after making whatever small fixes they can to make them more attractive to buyers. It is an exciting market, but also a dangerous one to the newbie who doesn't know what to look for. Take heed of the following:
Before you even begin looking in the house itself, you need to consider the neighborhood around it. A deteriorating block with several run-down houses is probably not an attractive place for the buyers you are going to need to attract. Similarly, unkempt lawns are a warning sign that the neighborhood has problems that may drive off customers. Also, keep in mind access to town. An isolated neighborhood may have several low-cost homes, but won't be as attractive to a young family as a shiny new development with a school and shopping center within an easy drive.
Water damage is among the most expensive problems that a home can have. A house with water damage could have issues that range from unsightly warping to serious weakness in its foundations. Moreover, water damage is not the kind of problem that you can ignore, as it tends to worsen over time. Water damage could be the result of an isolated incident, but it could also indicate an issue with the larger structure that is allowing water to seep in and ruin the home. If you see any visible signs of water damage, take a look around and try to determine if it is a pervasive issue or not, and err on the side of caution.
If a house's electrical system starts to act up or fails entirely, its value will quickly plummet. After all, people need electricity in their households to power the engines of modern life. With glitch power or none whatsoever, things like computing, lighting, and cleaning become impossible or far more difficult. And it can also be a sign of vermin infestation, which no one likes. When evaluating your potential purchase, be sure to try all the switches; if any of them give you a shock, there may be an underlying cause.
Other Structural Issues
While other structural issues might not be quite as expensive as the big ones listed above, they can add up and cause a big problem if you are not careful. Issues could include things like uneven floors, damaged stairs, crooked front porches, and sagging roofs. Any one of these is a hefty repair bill unless you can do the work yourself. And even if you are handy enough to repair a house on your own, the material and time costs might well flip the house from profitable to unprofitable. Think hard before buying a house with a major problem.
Finding the right home to flip is half the battle. Spend your time and do your due diligence and you'll find yourself with a fine short-term investment.
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