work-1100028_640

The Pros and Cons of House Flippingwork-1100028_640

We’ve all watched the shows – you know the ones, Flip or Flop, Flip This House, Masters of Flip etc., and now we want our kick at the can. Maybe you’re looking for a change or challenge, you’ve done your fair share of home renos, and you have the notion that flipping houses may be something that you want to start doing.  If so, be sure you know exactly what you’re getting into.  As with every business venture, there are pros and cons.  We’ve put together a list of such when it comes to flipping a house.

Prosright-1712994_640

Consright-1712994_640 (1)

  • Quick & High Profit – The potential to make a lot of money in a short amount of time depends on a few factors including purchase price, renovation costs and location of the home.
  •  Taking a loss. Flipping houses is a high-risk venture that doesn’t always turn a profit.

  • Increase Knowledge. There is much valuable information that you will gain when it comes to construction costs and detecting problems that will be an asset in your future flips.
  •  Costly unexpected expenses. Problems can easily arise that weren’t originally budgeted for and consume a large chunk of your allotted funds.
  • Be your own Boss. For many people, this is a big PRO as it allows you the power to call the shots and manage a team of workers that you may require.
  •  Taking on more than you can handle. Entering into a flip thinking you can do all the necessary improvements on your own to only find out that it is a much bigger project than anticipated will not only eat into your renovation budget but may also put you behind schedule causing you to not make your timeline that was laid out.
  • Expanding your network. By entering into this business you will come in contact with many people such as Real Estate agents, lawyers, contractors and building inspectors.  Associating with imperative people in the industry can help grow your business.
  •  The house won’t sell. Having to hold on and pay the mortgage (if you have one) and taxes due to not being able to sell the renovated house quickly can put you on a slippery slope.  Every day the house stays on the market is a day that you are losing money out of your profits.
  • The sense of Accomplishment. Once you have had a successful flip you may find that you feel great pride in seeing your vision and creativity come to life.
  •  Increase stress. Getting involved in this market can be very stressful.  Not only are you responsible for the project and little decision that goes along with that but you may find that it consumes all of your time and energy.

 

The bottom line is: Weigh the pros and cons of your situation and analyse if this is a risk worth taking.  Knowledge is key!  Get as much of it as possible so you can make an informed decision before jumping in.  Once you have all the tools in place and are ready to take on this business adventure let the house hunting begin!

SidebarImage3

Luc Trahan is one of Barrie’s leading sales agents with Century 21 BJ Roth Realty.

Today’s real estate industry is constantly evolving. Luc is committed to staying ahead

of the trends so his clients can acquire top dollar on the sale of their homes.

If you’re thinking about selling, call Luc Trahan, the Real Estate Man. (705) 818 1888