Renovate and sell a home for profit
Edited by Ephraim, Charmed, Innocent Yogo, Nate Pepperell and 2 others
This article will discuss how to renovate a house and sell it for a profit; typically called "flipping a house".
The first thing you should do is research the location. Make sure it has a history of, or good prospects for, selling renovated houses quickly. This is important to increase your chances of selling the house. You can do this kind of research online. Real estate sites have house sales on maps, making it easy to see which areas are hot beds for house sales. It's good to familiarize yourself with different areas of the town or city you are thinking of buy in. The best areas are more affordable for first-time buyers. Also, naturally, you need to have enough available cash to finance this project.
- 1 Instructions on how to renovate your home and sell it for a profit.
- 2 How to save money when you're renovating.
- 3 High profit property repairs
- 4 Top 10 renovation projects that return a high yield when selling your house.
- 5 Questions and Answers
- 6 Comments
Instructions on how to renovate your home and sell it for a profit.
- 1Never make any decisions without doing your research first. By planning properly, your renovation will be more time and cost efficient. These lead to higher profits when you sell the house. Below are a list of things you should consider researching, before you start your home renovations:Do Your Research.Advertisement
- Location. Find out as much as you can about the resale history of homes in the area of the home you're interested in buying. What is the average price of homes in the area? How many homes have been resold in the past 5 years? What are the trends of these re-sales? Are re-sales increasing or decreasing? What is the current value of the home you're interested in?
- The cost of renovation versus the return on your investment. Consider how much your renovation is going to cost you and how much that renovation is actually going to add to the value of your house. After all the expenses have been paid, are you going to make a profit when it's time to sell the house?
- Choosing materials and equipment. Shop around to find the best deals you can on materials and equipment. Keep in mind that cheaper products and materials often means they are inferior products.
- Choosing your contractors. It is very important that you choose the right contractors for your renovation job. Make sure they are highly skilled, fully qualified and legally able to do the job. A good contractor will be able to supply you with references, credentials and any other paperwork you require. If you hire a person who doesn't have all the credentials required by law, you will inevitably encounter problems with the renovations, eventually costing you more money, and possibly delaying the sale of your house. Shoddy workmanship will also decrease the value of your house. So...only hire qualified contractors.
- 2It's essential you have enough money to cover all of the expenses for the entire duration of the renovation. You don't want to run out of money before you have completely finished your renovation, as this will prevent you from selling your property. When determining how much money you will need, make sure that you factor in the possibility of any additional costs. It would be very unusual if there weren't any.Have your Finances in Order Before you Proceed.Advertisement
- 3Make sure you have a timeline or schedule of when different aspects of your renovation should start, and when they should be completed. This will help you coordinate everything that needs to be done, and in what order.Have a Timeline.
- 4If you hire contractors to do certain jobs throughout your renovation, make sure you are in constant communication with them so they know exactly what they need to do. This will help prevent any mistakes being made by contractors who due to poor communications, where not clear on your directions. Be involved in every step of your renovation, and make sure you are always available to answer any questions a contractor may have about the job.Communicate with your Contractors.
- 5When selling your home after making renovations, you may need to provide documents to prove the work was completed by licensed and qualified contractors. These documents are also needed for insurance (liability). That is where you will run into trouble if you don't hire qualified contractors.Have all your Paperwork in Order.
- 6You can either list your property on the market as a private sale (meaning you handle all of the affairs related to selling your home), or you can hire a real estate agent to handle everything for you. Research both options and decide on the best one for you.List Your Property On The Market.
How to save money when you're renovating.
When renovating a home for the sole purpose of 'flipping' it for a profit, you want to save as much money as you can during the renovations. The point is to make a nice little profit when it comes time to sell. Below are list of things you can do to save some money when renovating a home for profit:
- 1Make sure you shop around and ask around when looking for reliable contractors. The internet is invaluable for accessing comments from previous clients on previous jobs. Ask for quotes from at least 3 different contractors before committing to anyone. Research and compare prices when it comes to materials and equipment you will need.Get A Variety Of Different Quotes.Advertisement
- 2A great way to save money on your renovation is to get in there and do some of the work yourself. Because of licensing and laws you will need to hire professional contractors to do specific work around your home, like plumbing and electrical work; however there are still plenty of jobs that you can do yourself. Communicate with your contractors and ask them what you could do to help. It will go faster, and save you money.Get Your Hands Dirty.
- 3Learn how to do some of the more simpler tasks when renovating, like painting, installing door knobs, hanging curtain rails, etc. There are plenty of sources like Google and YouTube that can teach you exactly how to do theses tasks, even if you have no prior experience.Teach Yourself A New Skill.
- 4Plan your renovation so you can do things that will keep your costs down, but you don't cut so many corners that you end up compromising the quality of the work. It will cost you more money to redo a job for the second time than it would for you to do it properly in the first place. Remember the carpenter's creed; Measure twice, cut once.Do Things Properly The First Time.
- 5Your contractors are somewhat in control of how long a job will take to complete, inevitably affecting how much money the renovations will cost you. If you are nice to your contractors, they will have a positive attitude regarding you and your project. You keep them happy, and they will do a little extra to keep you happy. You will also have to deal with your contractors daily, so it's a good idea to build a healthy rapport and have a good relationship with them.Be Good To Your Contractors.
High profit property repairs
There are certain types of renovations that consistently yield a higher return when selling your house. These things cost money to do, but increase the value of your house by doing them. You might spend $4,000.00 on a project that will increase the value of your house by $6,500, a profit of $2,500.
Top 10 renovation projects that return a high yield when selling your house.
PLEASE NOTE: The following recommendations are based on data from the annual "Cost versus Value Home Improvement Survey" conducted by the Remodeling Magazine and the National Association of Realtors for 2013 (source - http://www.remodeling.hw.net/2013/costvsvalue/national.aspx )
- 1Replace your front entry door.
- 2Fiber cement siding replacement.
- 3Building or repairing a wooden deck.
- 4Replacing the garage door.
- 5Minor kitchen renovations.
- 6Replace Windows.
- 7Turn the attic into another room.
- 8Turn the basement into another room.
- 9Add a second level to your dwelling.
- 10Mid-range bathroom renovations.
Questions and Answers
Is it really possible to yield profit on renovating house?
Yes, this is certainly possible. How much renovation is done in the house will depict how much more money/profit you will receive on the home. Also when renovating the home, understand the price of the home may go up, which will make you more money when you resell your house.
Categories : Financial
Recent edits by: Eng, Nate Pepperell, Innocent Yogo