Ways To Appraise a Fix and Flip Property
When you’re on the lookout for your next fixer-upper, it’s important to be aware of a house’s potential profitability. If you aren’t meticulous, you run the risk of putting more money into your investment than you’ll get out. A bit of investigation and math should tell you the important details. These are some ways to decide whether or not a fix and flip property is worth it.
Evaluate the Property Yourself
The most obvious strategy is to appraise the house yourself. There is no way to be certain that the cost of repairing a house will be less than the purchase price without first knowing what repairs are necessary. Go through and make a list of all of the issues in the house and any improvements you’d like to make. Get estimates of what each job will cost and total up all of the expenses. Next, take a look at the price of other houses in a similar condition to the one you expect your fixer-upper to be in when the renovations are complete. This should tell you what you can expect to sell for. Lastly, total up the purchase price and renovation expenses and subtract them from the price you expect the house will resell for. This should give you a solid understanding of the house’s potential profitability, but be sure to leave wiggle room for unexpected expenses.
Seek Expert Advice
If it doesn’t suit your schedule or know-how to appraise your potential properties DIY style, it may be better to seek the help of an expert. You’ll have to pay a fee, but it will be reassuring to know that a trained professional has done a thorough inspection of your house and that their estimate is reliable. Consider searching online or locally for the ideal service to meet your needs.
Look for Information Online
Perhaps you have the time to evaluate the house yourself; you’re just missing the know-how. If that’s the case, it could be beneficial to spend some time researching the ins and outs of fix and flip evaluation. Try to get a feel for what you should inspect, how to do the inspections, the criteria of a good candidate house, and anything else you feel is necessary. Once you feel confident in your new knowledge, try out the method outlined in tip number one to appraise a potential house.
No matter which of these methods speaks to you the most, you should now have a good grasp on ways to evaluate the potential value of a prospective property. Stay mindful of your budget and the local real estate market in order to maximize your returns. Happy flipping!