In the recent past, homes are being flipped at a rapid pace. Most real estate TV shows make flipping seem very simple; buy a cheap house, make some few cosmetic fixes and resell at a higher price to make huge profits. On the contrary, it is not as simple as it may look and can either be a success or disaster.
As the Expo 2020 nears, several new real estate projects in Dubai are expected to be launched soon. For instance, Meraas Bluewater apartments and Madinat Jumeirah living apartments are projected to be completed by 2020. Currently, these apartments are sold off-plan at very affordable prices.
But before you plan to flip by investing in these new projects, here are some tips on how to flip your first house:
Finance the house flip with cash
House flipping is a very risky undertaking and adding debt make it even more dangerous. There is one major reason why experts advise investors to use cash when flipping. Normally, debts come with interest. Therefore, if the property stays longer in the market than expected, the interest accumulates and the flipper may make losses in the long-run.
Know the market
If you want a successful house flip, you must understand the market. Otherwise, you won’t know if you are getting a good deal or being conned. It is recommended to buy an investment property at 80% of the market value minus the cost of repair. Also, if you don’t understand the market, you won’t be able to accurately value the house. Your valuation must be based on a comprehensive analysis of the market.
Create a budget for the house flip
It is important to create a budget before purchasing an investment property. The budget will help you know the price range for purchasing the property, repairs and all the expenses involved. Make sure you have identified both small and big problems that may require change and how much they might cost. If you don’t have a background in construction, you can always involve a contractor.
Invest in smart technology
Some renovations works such as installing hardwood floors can cause the cost to get out of hand. However, you can forfeit certain renovations and concentrate on smart technology. You might spend less but still boost the value of the house.
Consult local real estate expert
It is possible to make good money in house flipping only if you do it right. A quality real estate agent will provide you with the market knowledge and guidance to make the best decision. You should consult Dubai real estate agencies to get the right agent.