During Season 4 of Modern Family, viewers sat in stitches watching as Cam and Claire tried their luck in house flipping, where a property is bought with the sole purpose of improving it and reselling it at a profit. Needless to say, things went wrong. What else would you expect from a sitcom? And what else would you expect from an episode titled “Flip Flop”? But maybe we can help you ensure that your flip doesn’t flop as well.
Have a clear and detailed goal
From the get-go, it is imperative that you have a clear idea of what you want to achieve. This will help you create a detailed “battle plan” that will guide you through every phase of the flipping process. Once the flipping commences it’s easy to get side-tracked when new ideas come along, but when your goal is clearly mapped out, it will be easier to stick to your guns, changing your plans only once you are sure they are truly better than what you originally had in mind.
A detailed goal will also allow you to complete the necessary research more thoroughly. As with any large-scale project, each decision you make should be based on trusted research, as any shortcomings in the early stages of the project will affect the later stages as well.
Accept that there are risks
From fluctuating interest rates to building blunders, flipping a property comes with financial risks. When planning, it is important to work conservatively with numbers to ensure that you have at least a little leeway for when things go wrong or when the economy changes. Unfortunately, you cannot prepare for all the risks that come with such a large-scale project, and need to know that there may be substantial losses before you see any profits.
Make sure you can commit
Property flipping is not a short-term endeavour. You must be able to commit to the project in the long run: financially, emotionally and physically. While the financial commitment is obvious – you need enough money to make sure the process doesn’t need to be stopped and restarted continuously – there are other factors you need to consider as well.
When flipping a property, you may opt to have a more qualified party oversee the remodelling processes, but you will still need to be physically available to come by the property at short notice when needed. You may want to be there as often as possible in any case, to make sure your dreams are taking the right form. This means travelling should be kept to a minimum until the project is done. Alternatively, you should enlist the support of someone you trust and who understands your vision to stand in for you when you are away.
The emotional strain of flipping a property can also be draining. While there are sure to be moments of joy, there will undoubtedly come times when you doubt whether it was worth it, times that you need to be prepared for.
Keep your sights on the future
When flipping a house, it’s easy to get stuck in the moment, struggling to compare the property before you to the costs involved. That is why it is vital to keep your focus on the future, on the possibilities and promise the property holds. By adding an en-suite bathroom or a garage, you immediately increase the value and appeal of your property. And remember, small changes can make a big difference. With a bit of remodelling and the necessary interior design, your property will already look like an entirely new property.
Prepare yourself for a journey
Patience is a virtue, true, but when it comes to flipping a property it is a non-negotiable one. Flipping a property takes time, a lot of it. Your property is bound to look far worse before it begins to show any sign of improvement. So see it as a journey, keep your eyes focused on the goal, and find a way to enjoy every step of the process.
When you’re ready for the journey to begin, get in touch with a trusted real estate agent that will help you ensure that your flip doesn’t flop.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)