Everyone’s watching HGTV, and everyone wants to flip real estate! Is there money in it? Yes, absolutely. Potentially. Is it easy? It can be, if you enjoy it and have the right people and procedures in place.
It’s always my intention to be of value to you, and not just help when you need to buy or sell. If you are considering flipping real estate in the Toronto area, here are some tips I’ve learned from hard experience in the trenches, renovating and re-selling my own real estate investments:
Buying Wisely is Half the Battle: This sounds like a no-brainer, but you need to know ahead of time what your costs are going to be and what the likely selling price will be before you invest. You need a home inspection to ensure you won’t be hit with unexpected costs, and you either need a good contractor who will quote you accurately, or you really need to know your stuff when it comes to DIY renovations. Equally important is an accurate projected timeline, as delays can eat into potential profits very quickly as you are forced to pay carrying costs. Much of this knowledge comes with experience, but a lot can be learned from intelligent research. The better and tighter your information, the more money you’ll be able to keep in your pocket.
Know What Pays and Where: I’ve seen people rip out everything and put top of the line kitchen and bathroom amenities and new finishings throughout a home, only to find that the market won’t bear it. I’ve also seen people go super cheap on finishings only to find that buyers in a given neighbourhood are expecting way better; in both cases the house will be difficult to flip for profit. I’ve found it helpful to take a look at homes for sale in a given neighbourhood before committing, to ensure I understand what’s ‘normal’ in a renovated home locally. It may be that granite and stainless steel are not necessary, but that new bathrooms are, for instance, or I may discover that I can’t just refinish the hardwood but that an entirely new modern interior is expected by buyers. Also, note what paint colours and finishes seem to be popular. Remember, you’re not aiming for what YOU like but rather what will appeal to current buyers.
Older Homes: Be careful of homes that are so old that they are going to require major corrections like new roofing, etc., in the next few years. While you can fix it up, such a home may have a hard time attracting buyers because of the high costs looming in the not-so-distant future. It’s often easier and more profitable to choose a home that still has a useful life left in its roof, windows etc., and is just outdated or in poor condition, than to do a complete overhaul. Remember that flipping is all about appealing to people. Which brings me to my next point…
Presentation: Stage the home! You don’t need to fully furnish it, but be aware that buyers have a hard time seeing themselves living in an empty home, even though it may be perfectly nice. They can’t envision what size bed goes in the bedroom, and they can’t picture furniture placement. It needs to be suggested. Think of it like a model home and present it accordingly, if less expensively. This is also the time to hire a Realtor who invests in professional marketing. The money you spend on a good Realtor should attract a higher number of potential buyers, netting you more money in the end.
If you’ve got any questions about neighbourhoods or renovation ideas, please don’t hesitate to get in touch. I’m happy to help!