How to Make Money Flipping Houses
Are you looking to start flipping houses? House flipping can be a fun and lucrative business in Malta, as it is in many other countries around the world. So, what exactly does flipping houses entail and how can you make money doing it? Most people who flip houses do it to make a quick turnover. It involves buying a property at low or reduced price, doing it up, and selling it at a profit. Doing up the property usually involves a lot more than just painting it. Some projects can take several months and involve a great deal of planning and a significant amount of work. But, if you find the right property and manage the project well, you’ll have a tidy profit at the end which will make it all worth it.
The first step in successfully flipping a house in Malta is finding the right property. If you don’t buy something appropriate, you’ll run the risk of losing money. Either that, or not being able to sell it at all. When you’re trying to find the right property in Malta to flip, it pays to pay attention to the market. Do your research. What are people buying? Are buyers looking for villas, detached houses, three-bedroom apartments or studios? Which areas in Malta are buyers interested in? If you flip a property that no one will want to buy, in an area where no one is looking, it’s really not going to be easy to sell. Remember to take your personal preferences out of the decision. You’re not buying the property for yourself; you’re buying it to do it up and sell. One option which many house-flippers do successfully in Malta is convert a house into several flats and then sell those off.
In addition to finding a property of the right type and size in a good location, you also need to consider the price. If you blow your budget on buying the property, you might not leave yourself enough to build, renovate, extend or decorate. So, how do you know if the property you’ve found is the right price? Many house-flippers and house-flipper-advice-givers advocate the ‘70% rule’. This rule states that you should pay no more than 70% of the property’s resale value, minus the cost of the repairs and renovations. These figures can’t just be pulled out of thin air. Consult your Sales Specialist to get a realistic estimate for how much your finished property will sell for. Get more than one quote for the works and then overestimate, just in case.
When it comes to the works, what are you going to do to the property? What needs doing? Are the repairs and works just cosmetic or structural? This is definitely something you should get a professional opinion on. Be careful of a property in Malta that needs more than just a cosmetic makeover. It’s a good idea not to take on something too extreme for your first flip. Considering that house-flipping is supposed to be a quick business, you don’t want to get bogged down with a property that’s in a terrible condition. When you don’t check everything beforehand, problems can come out of the woodwork and push back your scheduled completion date. Not to mention what hardcore problems can do to your budget. If you know what you’re getting into, you’ll be able to plan accordingly and not get blindsided.
Once you know what work the house needs to be ready to sell, you can get planning. How are you going to get the work done? Are you going to be doing the works yourself or will you be employing other people? You can make a profit either way, so it really depends on what suits your lifestyle and your skill set. Most people will be able to plaster and paint, but you’ll need to hire professionals to do any plumbing or electrical works. Get quotes for everything and make a solid plan. If you need to get professional works done, ask around for prices and get estimates on how long the works will take. When you’re putting together your plan and budget, it’s recommended to overestimate the cost and the time it will take. Treat it like a business, not a personal house renovation. When you’re choosing tiles, paints and fixtures, remember to be sensible. Go for cheaper and more popular options. You’re renovating the property to sell it, not to keep it for yourself!
Your aim throughout the whole project should be to sell and sell quick. The sooner you get the property in shape to sell, the better it will be for you and your pockets. The longer a project goes on for, the longer you’ll be paying the bills and the loan repayments (if you have a loan, of course). So, when it’s ready, put it on the market right away. It might be tempting to overprice the property (more profit is always a nice thing) but it will take longer to sell if buyers are put off. Your Sales Specialist at Zanzi Homes can help you value your property accurately. They will also market your property and do all of the viewings. For the viewings, it could be an idea to stage your house. If you haven’t already, it could help to sell your property in Malta if you furnish it. You can include the furniture in the asking price as well.
When you reach the end of your house-flipping project, you’ll probably be itching to sell and make some money back right away. However, you never know what the market is going to be like. When you put your property up for sale, it might not be the best time to sell. Properties sell at different rates and prices from month to month and from year to year. If you’re struggling to sell, it might be an idea to hang onto it and rent it out. In Malta, monthly rental prices are often a lot higher than mortgage or loan repayments. Do your sums and work out whether renting is a viable option for you. It might get you an income (enough to cover your loan and perhaps a little more) until you’re able to sell at a better price.