When it comes to paying for college, undertaking debt is a common option chosen by most individuals. However, flipping houses can serve as an unconventional yet useful method to put yourself through college. But, before committing to this option, it is important to understand its ins and outs, in addition to the risks involved, which will be discussed in detail in this article by Home Inspection Cost.
Determine the Profitability of a Property
While the price will provide a good indication of the property’s profitability, it should not be the sole factor you focus on. This is because if the current price of the property is higher than the average price of houses on the market it will be harder to flip it for a profit. Another factor that determines profitability is the length of time the property has been on the market. If the property has been on the market for a long time, it can point to the fact that the market in that particular area has become saturated, and even if you make meaningful modifications, it will be a challenge to receive a host of bids and make a quick sale.
Additionally, the current state of the property will need to be considered as well. The best properties to flip are those which need small yet useful modifications to increase their value and make it enticing for future buyers to pay a premium.
Get the House Inspected
Before you commit to purchasing a property, have it inspected. The inspection will tell you what is wrong with the property so that you can make an informed decision about whether or not to go through with the purchase. Home Inspection Cost can help you understand the different types of inspections and the associated costs so that you can budget for this step.
Choose a Great Location
Finding a property in a great location will streamline the house flipping process as you’ll receive more bids for the home and be able to sell at the expected price, as reported by Tellus. Try to focus on neighborhoods that have the potential for appreciation in value, which is driven by the development of other properties in the area, the construction of parks, shopping centers, and other public spaces.
Additionally, if you plan to sell the property to families, the home needs to be located in a great school district and have a low crime rate. Connectivity either through public transport or easy access to major highways, is always a plus for individual or family buyers.
Understandably, finding a location that provides all these amenities is a challenge. Hence, consider working with an experienced real estate agent who can shortlist properties based on your preferences and also suggest the required modifications needed to flip it for a profit.
Establish Yourself as an LLC
Choosing to flip houses as an individual can open you up to a host of financial and legal risks. Hence, the better option is to start an LLC for your house-flipping business, as it will protect your personal assets and finances from litigation and allow you to claim certain expenses as tax write-offs.
Additionally, even if you are flipping homes for the first time, an LLC will provide some much-needed credibility in the minds of your buyers, as they’ll feel they are dealing with a professional business rather than an individual.
List Your Property as a Rental
The current housing market is as unpredictable as it has ever been, and more individuals, especially young adults, than ever before are renting rather than owning properties. Hence, listing your home as a rental rather than immediately selling it can be a great avenue to earn a consistent income, at least for the short term. Additionally, finding renters is easier than finding buyers and involves less paperwork as well.
When it comes to charging rent, remember to price it in line with other properties in the area, as reported by SmartAsset. Undercutting will help to land clients quicker, but it will reduce your income, while pricing your property higher will drive away renters to your competition.
Support Your New Side Gig with Education
While you may not have envisioned yourself flipping houses when you signed up for your college courses, working through your first property might have changed your focus. If so, consider a degree in business or entrepreneurship.
You can also take courses or complete certificates that will help you with property investing that won’t commit you to it as a full-time career. For example, compTIA A+ certification can progress your career and help you with the technical aspects of marketing your side business or keeping your data safe. Plus, online courses make it easy to fit these helpful classes into your busy schedule.
Get Creative with Your College Funding
Flipping houses can serve as a unique and successful way to fund your college education. However, it is not devoid of financial and legal risks, which can be managed by establishing an LLC. When it comes to making the most profit from your investment, choosing the right location and modifications will play a key role. Additionally, don’t rush yourself into selling the property, as it can always be rented for the short term to earn a steady monthly income.
Article Courtesy of Bret Engle at DiyGuys.net
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