Purchasing a real estate property is a significant decision to make. So, give it careful thought because it is one of the most expensive purchases of your life. Here, we share a few strategies to help you find the home of your dreams and make any renovation project easier for you to undertake.
Check out real estate properties in up and coming residential areas
Narrow down your search for your dream home when you scout properties for sale in up-and-coming neighbourhoods. These are usually near ‘trendy’ and ‘dreamy' communities where property prices are super high.
Express interest in purchasing properties in these up-and-coming suburbs so your real estate agent or broker can help you find properties there. For sure, these are practical finds because the properties here appreciate very fast.
Tip: Planning to flip houses? Consider buying a slightly run-down home or a fixer-upper. These houses are cheaper, plus you can renovate the house as per your budget. Once fixed, you can sell the house for profit.
Negotiate all your closing costs
Closing costs often increase the final cost of buying a home from two to five per cent. These closing costs include appraisals, title fees, lender fees, escrow fees, attorney fees, termite inspections, interest, radon testing, etc. Read more about these here.
The good news is, most, if not all, of these costs, are negotiable. Negotiating these costs can be tedious, but getting more deals means saving more money on your home purchase.
Shop for the best home insurance package
Seek out the help of an agent and get deals from various home insurance providers. When possible, tailor your insurance package based on your needs.
Buy energy-efficient appliances
Here are the appliances that consume the most energy at home:
- washing machine
- clothes dryer
- air conditioner
When shopping for appliances, choose the ones that have a ‘super energy efficiency’ rating (at least seven stars). These are a little bit more expensive but will save you a lot of money in the long run.
Always check the energy rating label of the appliances that you plan to buy. The more stars these have, the better! Check the estimated annual electrical consumption of the appliance too.
Make use of helpful online platforms
Lucky for us, there are so many online platforms that we can use to scout land and house properties for sale. For instance, the online platform Lotmix can quickly help you compare properties and ensure that you have the correct information to make a quick decision. The platform is great because there won’t be any post-purchase dissonance.
If you are planning to renovate the property you’ve purchased, consider signing up for Superdraft. Superdraft offers a free project planning and coordination platform for its clients. Get to know more about its unique and valuable features here.
Buying to renovate and home flipping for profit
Flipping houses, when done right, is a profitable business. However, it is not a get rich quick scheme. It requires lots of hard work, effort, people skills, and knowledge of renovating.
Many seasoned real estate investors flip homes for a living purchase run down or dilapidated houses at a price below market value, raise the structure’s worth via repair and renovation, then sell it for a higher price.
Flipping houses is a business that requires a hefty investment. Make sure that you are knowledgeable about financing a significant purchase and a renovation before green-lighting your project.
How to flip homes
Before buying a house, you need to have the tools to value the residential investment property for deciding the return on your investment. The first point you must address is assessment. The assessment of a property involves these points:
- Conducting local market research.
- Finding potential properties.
- Estimate the cost of repair and other fees involved.
- Decide whether it's a go or no-go.
After you have completed the assessment and found the right property for flipping, it’s time to buy the property. Here are the steps you need to undertake.
- Secure funds.
- Negotiate with the seller.
- Close the deal.
After you have completed the buying process, you need to rehabilitate the property, and then it is time to sell it. For these activities, here are the steps.
- Obtain permits.
- Hire designers and builders. Find them via Superdraft.
- Manage your build.
After spending months researching, preparing, and rehabilitating the property, it’s time to find the right buyer.
- Perform a final inspection.
- Assess the value of the property.
- Enlist the house.
- Advertise the property.
- Stage the house.
- Find the counteroffers and negotiate.
- Close the deal.
After you have made the sale of your property, you have to pay the capital gains tax. This tax is applied to properties that are held for more than a year. Otherwise, this sale will get taxed as average income. Rates apply for the capital gains tax depending on whether the property is a primary residence, whether you sold the property immediately after buying, and if the IRS thinks about the property as a personal investment property. Again, you can talk with a tax professional to learn about the situation.
Although this information is sufficient to get you started on the work, there are many other things in buying and flipping a home. There are challenges involved in all properties, and a poor investment choice can set you back by years.
Buying a new home is not exactly rocket science. First, however, you have to follow the above-mentioned basic steps to make sure that you save both your time and your money when you make the purchase. Good luck!