Are you thinking about flipping a house and selling it for profit? If this is your first venture into buying a property as an investment, there are a few things to remember to make your flip as profitable as possible. These tips for flipping houses will help make your first time a success! Read on to discover everything you need to know for flipping a home.

Choose your Location Wisely

A home is only as good as its neighbourhood. Location plays a massive role in flipping a house. Even if you find the perfect home to invest in, you’ll have difficulty selling it if the neighbourhood isn’t clean and safe with in-demand amenities.

Thoroughly research the neighbourhood, community and amenities before purchasing. Getting a knowledgeable realtor on your side is perfect for this. Learn about the community, shopping, schools and recreational facilities, as well as the overall reputation of the neighbourhood.

Up-and-coming neighbourhoods are perfect for flippers. Neighbourhoods that are currently under construction with planned improvements mean you’ll be able to get the property for a better price now and reap the rewards when it comes time to sell.

How do you find an up-and-coming neighbourhood? Look for areas where new businesses or restaurants opening, or municipal investments. If the government is investing in the area, improving roads or adding parks or recreational facilities, that’s a good sign.

Do your Research when Flipping a Home

Before you choose a home to flip, a good place to start is researching the cost of common renovations. While it’s not a substitute for a solid quote, it helps to have a rough idea of what you can expect regarding costs.

Once you have chosen a property, be sure to have the home inspected before you place an offer. Having as much information upfront before you buy can help you negotiate.

If possible, get a contractor in to give an opinion on how accessible the space will be to renovate and what will be involved. Knowing how extensive the repairs will be will help you avoid surprises. Look closely at what will need to be done. If this is your first time flipping a house, avoid significant issues like water damage or foundation repairs, which are costly and time-consuming.

Bring in the Pros

When flipping a home, some areas are ok for hands-on DIY, it’s better to bring in professionals for any significant repairs. Be sure to play to your strengths. Put in some sweat equity to save yourself money in the long run, but only in areas where you are confident the job will be done quickly and with the same professional results.

Things like demolition, painting, and landscaping are good areas for DIY, while structural work, electrical work, and plumbing should be left to professionals. Be sure to vet your professionals carefully—not all contractors are created equally. Do your research and choose a company with a stellar reputation.

Think like an Investor when flipping a home

It can be challenging to think like an investor, especially if this is your first time flipping a house. You put hours of work, money and energy into a property so it can be easy to get attached. When flipping a home, the goal is to make money, so always keep the numbers at the forefront of everything you do.

Be realistic up front about how long it will take to repair, renovate, clean, market, stage, and sell the home. Set a timeline and try to move as quickly as possible. The longer you hold onto the property, the more costs you will incur. When setting a timeline, check with contractors on the order of the work. Some renovations will have to be done before others—scheduling the work in the proper order will help make sure you aren’t waiting.

You’ll probably have to make tough decisions about where to spend your money. Choose your investments wisely, spending money on the most important things. Knowing what buyers are looking for will help you make those tough decisions.

Keep the Buyer in Mind

When flipping a home, it’s important to consider the buyer’s wants and needs. The more you can customize the home to what buyers are looking for, the easier it will be to sell when the time comes.

Research current market demands and buyer trends. What is today’s buyer looking for in a home? Create a target buyer for the house and neighbourhood your property is in. Is the neighbourhood for families, retirees or younger singles? Each buyer will have differing opinions on what they want in a home.

Know Tax Requirements when flipping a home

When flipping a house, you want to be familiar with Canadian tax laws so you won’t be surprised. When you flip a house and make a sale, the income will be reported as a capital gain. The principal residence exemption does not apply, and the profits you make are taxable as business income.

Get an Expert Realtor on your Side

An experienced real estate agent will know the area you are searching in. They will be able to guide you to the best neighbourhoods for flipping and help you find the perfect property. When it comes to sell, they can also use their knowledge to price the property correctly and market it for a quick and profitable sale.

Flipping houses takes a big commitment, both financially and in terms of time and energy. Before you flip your first house, be sure to do your research. The more you know about the current market, the neighbourhood you are buying in, and what potential buyers want, the more profitable you will be. If you’re thinking about flipping a home, let’s have a chat. Our team has extensive knowledge in real estate investing and renovations and we’d love to share our experience with you!