Renovate and sell a home for profit

Edited by Ephraim, Charmed, Innocent Yogo, Nate Pepperell and 3 others

...More

This article will discuss how to renovate a house and sell it for a profit; typically called "flipping a house".

Home.jpg

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.

Was this helpful? Yes | No | I need help

Ad

Instructions on how to renovate your home and sell it for a profit.

  1. 1
    Do Your Research.
    Never 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:
    Advertisement
     
    1. 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?
    2. 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?
    3. 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.
    4. 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.
    Was this step helpful? Yes | No | I need help

  2. 2
    Have your Finances in Order Before you Proceed.
    It'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.
    Advertisement
    Was this step helpful? Yes | No | I need help

  3. 3
    Have a Timeline.
    Make 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.
    Was this step helpful? Yes | No | I need help

  4. 4
    Communicate with your Contractors.
    If 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.
    Was this step helpful? Yes | No | I need help

  5. 5
    Have all your Paperwork in Order.
    When 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.
    Was this step helpful? Yes | No | I need help

  6. 6
    List Your Property On The Market.
    You 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.
    Was this step helpful? Yes | No | I need help

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:

Was this helpful? Yes | No | I need help

  1. 1
    Get A Variety Of Different Quotes.
    Make 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.
    Advertisement
    Was this step helpful? Yes | No | I need help

  2. 2
    Get Your Hands Dirty.
    A 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.
    Was this step helpful? Yes | No | I need help

  3. 3
    Teach Yourself A New Skill.
    Learn 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.
    Was this step helpful? Yes | No | I need help

  4. 4
    Do Things Properly The First Time.
    Plan 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.
    Was this step helpful? Yes | No | I need help

  5. 5
    Be Good To Your Contractors.
    Your 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.
    Was this step helpful? Yes | No | I need help

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.

Was this helpful? Yes | No | I need help

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 )

Was this helpful? Yes | No | I need help

  1. 1
    Replace your front entry door.
    Was this step helpful? Yes | No | I need help

  2. 2
    Fiber cement siding replacement.
    Was this step helpful? Yes | No | I need help

  3. 3
    Building or repairing a wooden deck.
    Was this step helpful? Yes | No | I need help

  4. 4
    Replacing the garage door.
    Was this step helpful? Yes | No | I need help

  5. 5
    Minor kitchen renovations.
    Was this step helpful? Yes | No | I need help

  6. 6
    Replace Windows.
    Was this step helpful? Yes | No | I need help

  7. 7
    Turn the attic into another room.
    Was this step helpful? Yes | No | I need help

  8. 8
    Turn the basement into another room.
    Was this step helpful? Yes | No | I need help

  9. 9
    Add a second level to your dwelling.
    Was this step helpful? Yes | No | I need help

  10. 10
    Mid-range bathroom renovations.
    Was this step helpful? Yes | No | I need help

    Advertisement

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.

Was this helpful? Yes | No | I need help

Comments

VisiHow welcomes all comments. If you do not want to be anonymous, register or log in. It is free.




Amir Rose07
Premier Author
150 Articles Started
809 Article Edits
29,100 Points
Amir Rose07 is a premier author with VisiHow. Amir Rose07 has achieved the level of "Lieutenant" with 29,100 points. Amir Rose07 has started 150 articles (including this one) and has also made 809 article edits. 1,806,000 people have read Amir Rose07's article contributions.
Amir Rose07's Message Board
Amir Rose07: Hi, my name is Amir Rose07.
Amir Rose07: Can I help you with your problem about "Renovate and sell a home for profit"?
 

Article Info

Categories : Financial

Recent edits by: Anonymous, Eng, Nate Pepperell

Share this Article:

Thanks to all authors for creating a page that has been read 4,922 times.

Do you have a question not answered in this article?
Click here to ask one of the writers of this article
x

Thank Our Volunteer Authors.

Would you like to give back to the community by fixing a spelling mistake? Yes | No