Is House Flipping Worth Your Time?
If you've been considering real estate investing, specifically in the realm of house flipping, you're likely excited about the prospect of potentially drastic profit margins.
However, it's essential to understand just how time-intensive house flipping can be. This measure of dedication and perseverance often decides the success or break-even points for many budding and seasoned house flippers. The time that it takes to flip the house will affect the holding costs, so not only is time just to be considered but also budgetary considerations should be made too. This guide aims to provide a realistic expectation of the time investment you would need to dedicate to become a successful house flipper.
What is House Flipping?
House flipping involves buying homes, often at lower market prices, making necessary repairs and renovations, and selling them for a profit. House flippers can significantly spruce up blighted neighborhoods and abandoned homes, catering to the ever-changing dynamics of the real estate market. But, the question is - how time-intensive is house flipping?
How Time-Intensive is House Flipping?
We've all heard the glamorous stories about flipped homes selling for six-figure profits. And while these stories are excellent motivation, house flipping isn't always as cut-and-dried as TV shows make it seem. It involves due diligence during the property search, intensive labor during the renovation process, and a thorough understanding of the real estate market during the selling phase.
The time it takes to flip a house hugely varies, depending largely on the state of the property when acquired and the scale of repairs and renovation that it requires. On average, for a house flipper who's fully committed, the whole process from buying to selling can range from several months up to a year.
Factors that Affect the Time Investment in House Flipping
The state of the property has a massive impact on the time investment in house flipping. Homes that need extensive repairs can consume considerable amounts of time before they're ready for the market. The real estate market conditions also influence the time it takes to flip a home - a slow market could mean your renovated property sits unsold for a longer period.
Moreover, the legal paperwork, permits, and loan processes can additionally prolong the process. Therefore, it's best to always plan for extra time when estimating how long it will take to flip a house.
Ways to Minimize Time Investment in House Flipping
While house flipping will require a good chunk of your time, there are ways to minimize this investment. Firstly, it's vital to plan meticulously. Create a detailed plan outlining each phase of the process. Secondly, it may be beneficial to work with a local real estate agent with a thorough understanding of the market. They can help in quickly identifying potential properties, estimate renovation costs, and offer valuable advice during the selling phase.
Lastly, treat house-flipping like a business - because it is. Set work hours, define goals, and hold yourself accountable. Remember the longer you hold the property the more you need to dedicate in your budget. These holding costs can be things like property taxes, utilities, and more.
Suppose we look at John, an experienced real estate house flipper. His last project was a worn-down property purchased for $150,000. The home repairs and upgrades took him about four months, costing around $50,000. When he finally sold the property, it went for a cool $250,000. Although this decent profit margin might seem enticing, it's also noteworthy that John had to dedicate substantial amounts of time and energy during those four months.
Understanding the various phases of house flipping and planning can help you better manage your time. While it is indeed time-intensive, with the correct strategies and a solid understanding of the real estate market - you'll be able to gear up and make informed decisions.
As you embark on your house-flipping journey, remember that this field requires commitment, resilience, and most importantly - time. While the exciting prospect of a flipped home can make for a promising profit margin, it 2019s vital to consider the time investment required to successfully flip a house.
About Samantha Ankney
Samantha has been a media specialist for DealMachine for 2.5 years. She produces, edits, writes, and publishes all media that is distributed to the DealMachine and Real Estate Investing community.