House-Flipping 101 for Seniors
Money is a common worry for seniors in retirement, according to Barron's. If you're stressed about finances, you might consider flipping houses as an added form of income. The National Association of Realtors reveals that home-flipping can earn returns of some 40 percent if done well. The first step is finding the right property. An experienced real estate agent like Maggie Cano Realtor in California's Central Valley can help.
Before jumping into the house-flipping business, it's important to do your research. Learn the basics with the below guide.
Budget according to the 70 percent rule
When buying a house to flip, you have to take into account the fact that you'll likely have to spend a significant amount to get it ready for renting or resale. Flipper Force explains that many experts rely on the 70 percent rule when budgeting. According to this logic, when buying a property to flip, you shouldn't spend more than 70 percent of what the house will be worth after repairs, minus the cost of those repairs.
Get pre-approved for a home loan if needed
Once you have an idea of your budget, you can figure out financing. This online loan calculator from Maggie Cano Realtor can help you determine how much of a mortgage you'll need. It's best to go ahead and get preapproved for a loan before you start scouting out houses. This will make you look like a serious buyer to sellers, which can be advantageous in the current competitive real estate market.
Find a fitting property
With your financial paperwork taken care of, you can finally start property hunting. Trust a skilled realtor to help you identify houses in up-and-coming areas that may be more affordable now and are likely to gain popularity later. Before closing a deal on a property, schedule a home inspection to check for faults that could increase repair expenses. State Farm explains that a home inspection covers everything from safety to structural elements.
Enlist the services of a general contractor for the ‘flip’
Unless you have a background as a general contractor or in construction, you'll likely need to hire a professional to oversee your project. Home Stars explains the benefits of hiring a skilled contractor, who can help keep your project on budget. Even if you do have the experience needed to oversee the project, you'll want to hire people to do the actual grunt work, from electrical installation to carpentry and landscaping.
Invest in your property's presentation
Flipping a house requires more than simply getting a property in liveable condition. You'll be able to command a higher sale or rental price if you invest in the house's so-called curb appeal — the way it looks from the street. Better Homes & Gardens provides a guide to boosting curb appeal. Simple tips include installing window boxes with flowers, swapping out an old mailbox for a new one, and integrating exterior lights.
Put a streamlined property management system in place
If you flip your house to rent it, you'll also have to think about long-term management. Who will take care of the repairs? You may want to hire pros to do the job, freeing up your time to enjoy your retirement. If you do hire people, make sure to have a streamlined bookkeeping system in place to ensure prompt payment of your employees. With Quickbooks small biz software apps, you can also consolidate payroll with automatic tax calculation and filing.
Flipping houses as a senior can be rewarding financially. It can also be a fun way to keep busy after retirement. Make sure to do your research when flipping properties, enlist the help of a qualified real estate agent, and follow the best practices outlined above.
For more content like this, head to the Maggie Cano Realtor blog. I love to help people find and create dream homes. With my blog, I provide handy tips for homeowners as well as actionable advice on real estate topics like house-flipping. Check it out.
