Fixer Upper. Flip or Flop. Love It or List It. Property Brothers. Television today is inundated with shows where a property company comes in, buys houses in disrepair, restores them to better than new, and then provide them to new homeowners who (hopefully) fall in love with the re-creations.
This trend of buying houses, restoring and updating them, and then ultimately flipping them started heating up in the first decade of the 2000’s. When the dot-com bubble burst, Americans were looking for a different way to invest their funds and, in theory, reap the rewards. The two biggest unforeseen obstacles were the crashing of the housing market due to the massive collapse of the sub prime loan industry and all the effort it takes to truly flip a house. Vast amounts of people were caught completely off guard and suffered the consequences.
While television makes the transition from a dilapidated dwelling to an immaculate manor seem effortless, the fact of the matter couldn’t be further from the truth. As with any major project, the investment of both time and money is extensive. Not to mention the uncountable amount of setbacks you will experience on the road to completion. Television does not show the sheer amount of blood, sweat, and actual tears that goes into the restoration in a property. With each delay, with each obstacle, there is a continual drain of both time and finances.
To put it into perspective, let’s look at how much a project like this would truly cost. First you start with the acquisition of the property. Which means that you’re most likely going to need a realtor. The beginning range for the acquisition is easily in the tens of thousands. The next step is the demolition of the interior and parts of the exterior. Even the most well kept house is still going to need some form of renovation, updating, and personal touches. You could try and do it on your own; but honestly the less expensive option would be to hire a company (who has far more experience renovating homes than the average Joe). The good news is that you have multiple options (https://porch.com/ http://www.houzz.com http://www.homeadvisor.com for a few examples) where you can choose a professional home contractor – especially since sites like these have vetted their pros and there’s examples of their work for you to view. Once you’ve hired a crew, you’re going to have to factor in the length of the project. Bare minimum (depending on how much work needs to be done, of course), is going to be around two to four weeks. Possibly even eight weeks, if it’s an extensive renovation. If your lucky, you’ll find a crew that does landscaping as well a home renovation. This will save on your overall budget; but may lengthen the time of the overall project.
So, now that the project is over and you now have a house that is better than new, you now have to sell the property. The smart bet would be to keep the initial realtor that you bought the property through. Depending on what you had done, the value of the home could have skyrocketed and you’ll be able to sell it for a nice profit. However, there’s also the option of renting the property and keeping it as a continual profit. The issue with that is that you won’t have an immediate enough lump sum if you decide you want to move on and start the process over again. Not to mention all the new responsibilities you would now have as a landlord. The benefit, however, is that you may be able to fill the occupancy much sooner if you rent as opposed to full out sell. A good realtor will be able to unload it in a matter of weeks. A bad one and it sits on the market for months.
House flipping is hardly a get-rich-quick opportunity and honestly should be left to the professionals. While the market has improved significantly since the crash of ten years ago, there’s no absolute guarantee that a property that you’ve invested over a month’s worth of work and thousands upon thousands of dollars will be sold within a short time frame. So many circumstances must be considered before you even begin the process; and it’s often the things that you never thought of that will hinder you the most. It’s best to take the safe route with the professionals and reap the rewards of their hard labor.
Heart & Soul Property Solutions 