Retailing is the process of buying a house low and selling it high. A big part of the process can be making renovations and repairs to help increase the value of the property. This is the most basic method of investing in real estate. It can be a great part time income for someone who enjoys buying and fixing up a few houses a year or it can be a full time job where someone is working on two or three houses all the time. It can sound like a pretty simple process and an easy way to make some money but there can also be pitfalls if you don’t know the process and the industry. Knowing a few tips can help you to get starting in this form of real estate investing.
It’s great to find a really cheap house to buy but you need to also be concerned with the neighborhood and surrounding area. Nothing is worse than buying a house, investing time and money in repairs and then not being able to sell the house. You want to be sure the properties that you buy are in desirable areas and will be marketable once you complete your work.
When you get the loan on the house, always include the cost of the property, the cost of the repairs and then add in a contingency amount. There are always little surprises along the way and estimates are never perfect. You need to go into the project knowing exactly how much you are investing and how much you will need to sell the property for to make your desired return on investment. That being said, you will need to keep in close contact with any contractors that you are working with to be sure that they stay on budget and that you don’t end up with any unexpected costs just before the completion of the project.
When you set your renovation and repair budget, remember that someone is going to call the house their home. Think about what expectations they will have for the finishes and renovations that you make. Installing a slightly more expensive grade of cabinets and counters will certainly get you a much better selling price than just the lowest builder grade materials available. Know the area and what other homes in the area are offering. Try to find a nice balance with quality and cost, but be careful not to use materials that are too over priced for the area.
Once the home is completed, you need to have a process for marketing and selling your homes quickly. Paying carrying costs is the same as losing money on a lowball sale. Market the homes features and point out the professional workmanship and quality you have added in your renovations. Great pictures and full details of the house will get buyers interested and make them want to see the house in person.