4 Questions To Consider Before You Fix-and-Flip

Television programs make it look so easy to buy a fixer-upper house, repair it, freshen it up, and put it back on the market. Yet the reality is not nearly so simple. If you think you might be interested in performing a fix-and-flip on a house of your own, first try to answer four key questions.

Can You Afford It?

Your first consideration must be your finances. Ask yourself if you can afford the purchase price of the house you want. You might try to bargain a bit to bring it into your price range, but you should not count on that. Just as important, you must make sure that you can afford the materials and labor to fix up the house. Renovation costs are not cheap, and that is usually a significant understatement. You must also figure in cost overruns and determine how you will handle emergencies and unexpected expenses.

Can You Do It?

You must also think carefully about whether you have the skills to take on a fix-and-flip project. Most fixer-uppers require much more than a few coats of paint and some new cabinets. You could be facing bathroom remodels, foundation problems, electrical issues, mold, and even rebuilds of various parts of the house. You need to determine if your skills are a good match for the property’s needs. Of course, you can (and sometimes must) hire professionals, but this will raise your budget considerably. Most people who choose to pursue a project like this have major do-it-yourself abilities. Be honest with yourself about whether or not you do.

Can You Commit to It?

Renovating a fixer-upper will take time, lots of time. If you can only commit to a weekend’s work now and then, this kind of project may not be for you. Depending on the amount and kind of renovations needed, a project could take months or even upwards of a year. You need to be able to commit to working on the project continually for that long and be able to make room in your schedule for it.

Can You Sell It?

Finally, you will need to consider if you can sell the house once you have fixed it up. Even before you buy, consider the real estate market in the home’s neighborhood. See if houses are selling at all, and notice what features they have. Research housing prices to determine if you will have any chance of getting out of the house whatever money you put into it.

A fix-and-flip project is no small commitment, so before you begin, take some time to be sure you have what it takes to finish.