If you want to turn a profit on a fix and flip property, evaluating it carefully before you purchase it is critical. This post goes over three factors to keep in mind when judging a potential purchase. In turn, you will be more likely to obtain properties that buyers will find attractive down the road.
Factor 1: Value to Buyers
To sell at a good price, a home needs to appear valuable to buyers. In other words, the property needs to offer them something. Gathering information on the property’s condition is key. The property’s neighborhood is important to consider as well. For example, Fit Small Business’s Melanie Patterson recommends judging the presence of streetlights, the condition of sidewalks, and if other houses in the neighborhood are well maintained.
Local amenities—or the lack thereof—can affect a fix and flip property’s appeal as well. Features like public transportation, green spaces, and shopping and dining options are major selling points.
Factor 2: Recent Transactions in the Area
Recent real estate transactions in the area are another valuable source of information when judging a fix and flip property. The Multiple Listing Service (MLS) is a great resource for this, and if you don’t have access to that, try looking for sites that aggregate information from it. This data can be useful for making comparisons; for example, you might find that buyers are after properties of a particular age, size, or style. It can also let you know what properties generally sell for.
Factor 3: Money Required for Repairs
Finally, it’s important to evaluate how much work a potential fix and flip property will need to become profitable. No matter how great a property looks on paper, it’s critical to visit the property in person and carefully examine its faults. Estimate how much it will cost to fix the property up and take that into account before deciding whether or not to make the purchase.
Interested in learning more about different types of investments, financing, and additional money-related topics? Check out Prime Wealth Development’s other blog content.