Perhaps you have been bitten by the real estate investing bug. Maybe you have seen more than your share of shows about house flipping. Regardless of your motivation, if you are considering getting into the business of real estate investing, there are a few things you should know. Below we offer three tips for beginners, as you begin your journey from first time home flipper to experienced real estate owner.
Understand the Consequences of Flipping Homes
Buying and selling real estate may seem like an easy way to make money. However, many beginning real estate flippers seem unaware that “making money” can be tantamount to “income” as far as the government is concerned. Depending on how fast you buy and sell investment properties, any money you make may be considered business income. This, of course, means you will be paying taxes on your profits.
Be Prepared to Walk Away
Buying and selling homes can be a profitable business. However, this is only true when you approach house flipping as the business it is, not a labor of love. If you easily fall in love with properties, or features of a property, such as a yard, the sun porch, or the kitchen, remind yourself to leave your emotions at the door when you enter. You must be able to objectively assess the value of the home, and the potential future value, depending on improvements if you want to succeed in real estate flipping. You must also be willing to walk away if the deal doesn’t work on paper.
Work with Someone Who Understands Your Business Model
When you work with a real estate agent, you have the freedom to choose any agent you want. If you are planning on investing in real estate, consider finding and working with a realtor who also has experience with short-term real estate investments. Of course, you will rely on your own experience in assessing the cost of rehabilitation and repair. However, having a second set of eyes and another person to discuss possible repair approaches can provide additional insights.
If You are Considering Investing in Real Estate
If you are considering investing in real estate, contact the realtors at Re/Max Hallmark. We have realtors experienced in real estate investing. Let our experience work for you. We provide complete real estate service, from finding homes in your price range, to working in the neighborhoods you love. Contact us today to discuss your real estate goals.