1. Not Paying Attention to the Foundation
The bones of a property can make or break a sale. If you forget or ignore structural improvements, your potential buyers will notice. One of the first things you should do is analyze the current infrastructure to determine its strengths and weaknesses,” Larsen HVAC, a top HVAC company in Utah. “You need to double check the HVAC, plumbing, electrical, and roof status to ensure the operational safety of the home.” These are all areas that tend to be a pain for buyers, and you’re more likely to eliminate their hesitation if you take care of it early on.
2. Not Pricing a Property Correctly
Believe it or not, it’s possible to price a home too high or too low. Eager sellers might try to price the home too much to get the most out of it, while new sellers might also be too desperate to compete on the real estate market. Investors that overprice their home will find that it sits on the market for months at a time, accruing more and more costs out of your pockets. However, if it’s priced too low, it could create a “too good to be true” buyer mentality and also cut into your profit margins.
3. Budgeting Tightly
In every renovation, you have to account for and plan for the unexpected. Chances are, things will come up during the renovation process that you didn’t plan for. This is especially true when you don’t have the ability to do your proper due diligence (such as with a tax sale, for example). When it comes to distressed properties, you never know what you could find behind the walls. These surprises could hurt your profit or derail the project altogether if you don’t plan for it carefully. A contingency budget can go a long way.
4. Ignoring Home Staging
According to the Real Estate Staging Association, homes that are staged strategically sell 73% faster than those that aren’t. Yet many property flippers don’t consider this a crucial part of the sale, or falsely believe that staging is a tactic reserved for rental properties. No matter what or where you’re selling, staging can make all the difference. You can stage the home with basic smart technology, or go the extra mile and work with a staging company to “loan” furniture for the house selling process.
5. Adding Too Many Improvements
Over eagerness might quickly result in adding too many improvements. When it comes to property rehabilitation, the key is to focus on smart upgrades. There are many improvements that do little to affect the property value of a home and just as many that are cost-conscious and make all the difference.
Instead of adding luxury finishes and pricey tiles in the bathroom, go for a lower priced tile that has virtually the same value perception. Don’t focus on granite in the kitchen and expensive backsplash projects. And if the home has a backyard, landscaping is out. The key is to always stick to the basics. Aside from structural and maintenance, you don’t have to pay much attention to the backyard, basement, or attic.
6. Taking too long
Renovating and flipping a house is a long-term commitment and you cannot afford to stop midway because, by the time you want to give up, you would have invested your hard earned money as well as time in it. It would be a huge loss for you to give up everything just like that. This is the reason why you should know when to start working; when to invest the money; when to hire workers. If you have a day job, you should schedule house flipping work accordingly. You need to know how much you are investing in the work, your commute to and from work or home, all this takes time and you should add all your costs when quoting a price.
7. Not enough skills
Manufacturers and experts, for example, woodworkers and plumbers, frequently flip houses as a side gig to their regular occupations. They have the information, aptitudes, and experience to fix a house. The real cash in house flipping originates from sweat equity. In case you’re convenient with a mallet, enjoy laying rug, can hang drywall, roof a house, and install a kitchen sink, you have what it takes to flip a house. Then again, if you don’t have the slightest idea about a Phillips-head screwdriver from a flat screwdriver, you should pay an expert to do the remodels and repairs. Consequently, the chances of making a considerable profit on your venture are diminished.
8. Lack of Patience
The entire process of the flipping house requires a lot of patience. Those who know what they are doing are aware of exactly what they want and go for it. They do not go for the very first person who shows interest in helping or buying. Inexperienced people rush forward and get the first contactor who offers to help or the first person who wants to buy because they do not have the patience or the confidence to know that you wait for the best bids. If you are experienced and confident enough, you do not hire a realtor to help with selling the house, you do it yourself. This saves you from sharing the profits and also minimizes the costs. The profit margins are already very slim, lack of patience lowers the profits even more because you want to rush and be done with everything as soon as possible.