Canadian Finance Blog

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This Is Flipping Fun! Posted: 08 Aug 2011 02:00 AM PDT Did you feel inclined to build Lego cities or sand castles when you were young? Did you always insist on decorating and setting up your room so that it's trendy, practical and useful? Are you worried that your creativity is not fully utilized in your job? Well, then you should consider flipping houses as a side project. Whether you make it a side project or do it as pastime, house flips are an exciting activity that can be highly profitable if you know what you're doing. You can engage your family as well, if you like. The principle may be familiar to you from various reality shows or TV programs. To flip a house means to purchase a run-down property (a condominium unit or a house), invest in its renovation, then sell the renovated property to an end-buyer for profit. As you may expect, location and timing are everything. Of course, merely making the necessary repairs and upgrades usually pays off generously, but the real potential is in the planning of the transaction. If you expect that a neighbourhood will become more popular in the future, you'll do better flipping a house there than doing the same in a declining neighbourhood. If you think that the market will pick up soon, get your house now so that it's ready for the hype. The real cherry-pickers will meticulously seek old or abandoned houses in prominent neighbourhoods and snatch any shabbier house that has posh neighbours. Not only does this approach often maximize the return on investment, but the neighbours will be happy to see that the dark spot of their home area will receive a facelift. A professional real estate agent experienced in house-flipping will be a great boon when you're looking for good candidate houses. (Learn more about investing in Calgary real estate here.) Not every Realtor® is skilled in this technique and few are true specialists. Those who are, however, do it because they love the adventurous nature of flips from the bottom of their hearts — just like you do. Once you've found a promising house and secured the necessary funds, it's show-time. First, you must master the technicalities of the repairs, such as maintaining the stability of the house, engineering requirements, and liveability standards and appliances. While you're figuring this out, your family can help you mow the lawn in front and behind the house, remove broken windows and doors, or locate all the loose bricks or floor pieces. Of course, you can pay somebody to do it, but it's a great opportunity for a bonding experience and, in the end, you will have achieved something together. Once you've "prepared the workplace," you can call in the professionals to take care of the house or condo and get it back in shape. After the hard work has been carried out, you can engage your family in picking the colour scheme for the interior and exterior and deciding how to decorate the yard or the driveway so that it appeals to potential buyers. Sometimes, your Realtor may be interested in chipping into the repairs in exchange for a share of the final margin. This might ease the financial burden for you and allow you to perform more extensive repairs than you could fund by yourself. Ask your agent whether he or she is interested in such arrangements. Author Bio: Written by David Tsegai of Calgary Real Estate, a real estate firm specializing in property investment in the Calgary area. Related Posts: Should You Use A Real Estate Agent To Sell Your House? Save Money By Selling Your House Without A Real Estate Agent Purchasing a Vacation Property in the US This Is Flipping Fun! originally appeared on Canadian Finance Blog on August 8, 2011.

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