Tips for flips

Not long ago, if you mentioned “flipper,” people figured you meant the dolphin. These days a flipper is a home buyer who buys properties, improves them and sells them promptly for a profit. Could there be a flip in your future? Consider the following before flipping over a flipper:

• Figure out a budget. What will it cost to buy the property, improve it, own it for a (hopefully) short time and market it for sale? Can you comfortably cover such costs?

• Be realistic. Many flippers can’t afford to wait too long to sell a house they’ve improved. Pay attention to the condition, selling price and time on the market of comparable (or even competing) properties in the same neighborhood. To be safe, figure on getting your lowest estimate for the home, after a long time on market. If it will still provide a desirable profit under those conditions, consider moving forward.

• Don’t over-Improve. Choose improvements wisely. These are your variable costs. Imagine the type of buyer who house hunts in this neighborhood. Upgrade and improve with that target in mind. Kitchens and bathrooms are good places to start, but depending on the property, the necessary renovations could be much more extensive.

• Highlight the home’s improvements. When it comes time to sell, be proud of your efforts. On the listing sheet, include each new feature or improvement in detail. However, be cautious not to price yourself out of the market. A pie-in-the sky asking price might cut into your profit. (Remember, you own the property until it sells. That means you pay all the carrying costs such as utilities, indoor and outdoor maintenance, taxes, etc.) Price your masterpiece fairly, sell it quickly and put your profit towards your next project home.