How Retirees Can Get Started in House Flipping

House flipping is big business. In 2019, flipped homes accounted for 6.3% of all sales. Many retirees consider house flipping to be an appealing option for making extra money in their retirement. However, as with other forms of entrepreneurship, it's important to have a good business plan before you start. Here’s some guidance below.

Choosing the Right Property

When choosing a property, it can be tempting to look only at the listing price. Incredibly low-cost fixer-uppers are appealing at first glance. However, for those who lack the skills to renovate the property themselves, the list price can be a false amount.

Retirees who are considering purchasing a fixer-upper should have a full survey done so they know exactly what work is required. Foundation and roofing problems can be costly to fix. Electrical or gas work should be carried out only by a qualified professional. HVAC repairs or upgrades may cost more than first thought, especially if the current system is very old and uses phased out refrigerants. Issues with mold or asbestos could present a health hazard and must be treated carefully.

After getting a list of issues to fix and desirable jobs, such as decorating to-dos, estimate the cost of those jobs, and add 20% to the cost for unforeseen expenses.

Funding Your Property Purchase

While some fortunate seniors may have the funds available to purchase a fixer-upper outright, many flippers use a mortgage for this purpose. Look for as low of an interest rate as possible, and experiment with different deposit amounts to find the best rate you can. Be aware that properties in poor condition might not qualify for a traditional mortgage.

High-Impact Home Renovations

Most successful flippers focus on renovations that will offer a significant return on investment, such as bathroom or kitchen remodels. When it comes to the kitchen, you can complete a full-scale renovation or add some new appliances and a wall mount range hood to help clean the air.

Marketing Your Property on Social Media

When it comes to marketing your home, social media can be a powerful tool. By creating a strong online presence, you can reach a wide audience of potential buyers and get the word out about your listing.

You can create a social media profile for your home and post regularly about its features and highlights. Be sure to use attractive photos and compelling descriptions to really capture people’s attention. You can also use a banner design online to create an attention-grabbing banner on your social media pages. Choose a template and add your own photos, text, and images.

Selling Your Home for a Profit

Once the hard work is done, the next step is to sell the property. Patience is key here. The national average gross profit for flipping a property is 37.2%, although the return on investment varies from area to area. Actual profits depend on the cost of renovations, selling fees, and other expenses.

Property prices can vary widely depending on both economic factors and local issues. Ideally, would-be property flippers should try to keep sufficient cash flow available so that they don't feel pressured to reduce their asking price for a quicker sale.

Property Flipping Takes Planning

Seniors should be mindful that property flipping is not easy money, as it takes planning on both the business and renovations side. However, the right property, with a low-interest mortgage and some savvy renovations, can generate a good return on investment.

When you’re ready to purchase a Minnesota property, trust the experts at Scates Real Estate for exceptional service.