Article by: Tina Martin of Ideaspired.
If you’re a senior looking to make some extra money while keeping busy in retirement, flipping houses is one possibility. Homelight reveals that the average flipper makes a return on investment (ROI) of about 40 percent, resulting in a gross profit of an estimated $64,900 for one house!
Done right, flipping houses can seriously bolster your retirement savings. An experienced real estate agent can help you find a fitting property to flip to get started. Before you go ahead, take your time to learn about flipping. This guide (presented by Easy Investing Income) provides the basic information you should know and walks you through the process from start to finish.
Determine your budget
Before buying a fixer-upper, set a budget. Budget Dumpster explains that many flippers refer to what’s known as the 70-percent rule. This dictates that you should not buy a property for more than 70 percent of what you estimate the resale value will be — minus the cost of repairs. So if you believe a house will be worth $300,000 once it’s fixed up and you estimate $50,000 worth of repairs, you shouldn’t pay more than $160,000 for the property when you buy it.
Find the perfect property
Once you have an idea of what you can afford to spend, start scouring the market for the perfect property. A real estate agent can help, providing insider insights into up-and-coming neighborhoods that may offer a good deal now and be more attractive to future buyers. Rehab Financial Group provides tips for selecting a house to flip, like considering the location and school district.
Schedule a professional inspection
It’s one thing to buy a property anticipating some minor repairs. It’s a whole other thing to buy a house only to discover that it needs a major overhaul, like a new roof. A professional home inspection before buying will spare you such nasty surprises. The American Society of Home Inspectors explains that a professional third-party home inspection will provide you with a comprehensive report of any issues with the home, from pests to cracked foundations.
Figure out financing
Even if you have a sizable nest egg, you probably don’t want to blow it all on your house flipping project. This is especially true for seniors who need to rely on their retirement savings. If needed, you can take out a mortgage to fund your home-buying. Bankrate offers a guide to comparing mortgages. There are many points to consider, from down payments to loan terms and interest rates.
Hire the necessary help for the actual flipping
Odds are that you don’t have the knowledge, skills, or tools needed to handle a full house-flip yourself. Trust an expert to handle more extensive renovations. Treasured Spaces recommends working with a general contractor, who will oversee all the details of a remodeling project and coordinate the various professionals needed to get the job done. Ask for an estimate and timeline upfront to make sure the project aligns with your expectations.
If you plan to hire employees or contractors, it may be a good idea to use accounting services to help you keep everything organized. Find services that allow you to customize the features in your accounting software, allowing you to find the data you need, when you need it. Many of these services will also sync up with other productivity apps you use for business.
Add the finishing touches
Take steps to boost your property’s marketability so you can maximize your ROI. This could include installing new appliances, sprucing up the landscaping, and adding fresh paint to the walls. Wallpaper is an easy way to upgrade the interior. The elegant designs are durable and easy to apply, thanks to the adhesive back. If you have application issues, you can always unpeel and reapply. You can even create one-of-a-kind customized designs.
Flipping houses isn’t an easy job. However, it can be extremely rewarding — when it’s done right. If you’re a senior looking for a lucrative project to keep you busy in your retirement years, let this introductory primer to house-flipping be your guide.
