If you ever decide to take on a large do it your self project like fixing and flipping a house, there are a lot of things you need to consider before moving forward. If you don’t educate yourself first and do your due diligence, you could find yourself in a world of pain.
Based on my experience of flipping many houses and condos over the years, here are my top tips.
- Use an experienced realtor that knows the area you are buying in. They will help you determine how much you can pay and still realistically walk away with a nice profit once you have completed your renovations.
- Do your homework – research how much homes in the area are selling for when they are in an average condition and when they are renovated. Some areas just don’t have much upside potential since they may be viewed as undesirable neighborhoods, so it makes no sense to sink a lot of money into them. At the same time, some communities have great potential for high prices if the property is dramatically improved.
- Know your budget – It is very easy to get excited about transforming a neglected property into a gem, but you need to stay focused on what you are trying to do. If you go over budget, you may not get as much profit as you wanted.
- Be consistent throughout the house. You can’t just transform one or two rooms. You have to renovate the entire home. If you just update the kitchen into something that is show home quality, but leave the rest of the home dated, you will not get top dollar when you sell.
- Know the styles that are in right now. You want to make this home look like a brand new show home that the builders are making. Go view some of their show homes to see what they are doing and try and duplicate that. These builders have deep pockets to hire designers and decorators so they can dictate what is going to be “in”.
- Get a home inspection from a qualified and licensed professional that can spot structural problems with the foundation or anything else that could be a game changer. Although they can miss things, this is the best $500 you can spend.
- Be aware that you may encounter some nasty surprises when you start ripping things apart. These are things that your home inspector may not be able to see. By far the biggest worry is asbestos. This is a big concern if the home is older than 1990. It can be found in floor tiles, insulation, and drywall mud to name a few. The problem is that it is very dangerous to your health. Breathing in the asbestos fibers can cause very serious lung problems and eventually death. It is very important that you do not disturb the asbestos. If you have linoleum or tiles with asbestos, you can just cover them up with hardwood or some other type of flooring. If you need to have the asbestos removed, you must hire a qualified professional asbestos removal company. However, this can get very expensive so remember that this is always going to be a possibility when you purchase an older home. Thanks to Steven from Ross Environmental for this information about asbestos. He does asbestos removal in Didsbury Alberta and surrounding areas.
Although this is not a comprehensive list of things to do when you buy a home to fix and then sell, it does include what I think are the most important points that will help you to avoid making any big mistakes.