Flipping a home is a lot of work, but it pays off in the end if you make the proper renovations. Before you put your fix and flip on the market, make sure you make these different home renovations to receive the maximum profit of return for your investment.
How Common Are Fix and Flip Homes?
Fix, and flip homes are more common than you may think. In 2017, over 100,000 businesses and institutions flipped homes, which was more than a 2% increase from 2016. Different popular house-flipping TV shows take you on a journey from the beginning to the end of the house flipping process.
What Is the Average Profit?
Flipping a home can return a 10% to 20% return on investment. Maximizing your profit requires you to:
- Assess the purchase price of the fix and flip
- Closing costs and costs to rehab
- Material and labor costs
- Cosmetic home repairs
- Carrying costs
Too often, homes, especially older homes, have more than three bedrooms but only one bathroom. Renovating and adding at least one more bathroom in your fix and flip may give you a return of 80 percent. The bathroom is considered private space, and most homebuyers want a bathroom that is large enough for them to relax, take a bath, and unwind from the day without being cramped and nowhere to store their washcloths, towels, and other necessities. Underutilized spaces in the home can make an excellent location for an extra bathroom.
Aim for $1,000 to renovate a basic bathroom to $4,000 for something more luxurious. If you’re adding a new one, add another $1,000 for labor costs, such as plumbing.
The kitchen is often the heart of the home, and it’s a place where families come together to share meals and talk about their day. When you’re considering kitchen renovations for fix and flip property, think energy efficient. Homebuyers want to save money. Regardless of how luxurious you make the kitchen, homebuyers appreciate appliances that will help them save money. Kitchens also need to be functional, which means you need to add convenient storage space.
The cost of a kitchen can vary widely. As a renovator, you need to get it looking good enough to sell but without the big-budget price tag. Depending on the size, expect to pay between $4,000 and $10,000 for the kitchen. Labor costs will add more, including rewiring, plumbing and any custom surfaces. However, a good kitchen can add up to 10% to 15% to the value of the home and make it easier to sell.
Repainting the Interior
Paint goes a long way, but using bright colors can deter homebuyers. When a homebuyer tours the home, they are looking for ways they can personalize the house and make it theirs. Use neutral colors, such as beige, terracotta and off white, especially for the living room and kitchen. Use neutral-colored decorations to help make the home lively and cozy. If natural sunlight is available, use it.
A good painter will cost you, though, and this means you’ll have to do the work yourself if you want to make a good profit. However, $400 worth of the right paint can add thousands to your fix and flip’s value.
Getting Help with Expenses
Hard money loans can help you with the cost of repairs and renovations to make your fix and flip a cash cow masterpiece. This home renovation loan gives you access to fast approval times, which means you get your funds sooner, and you don’t have to have perfect credit to get approved. You are more likely to get approved for a hard money loan than a traditional loan because there are no rigid qualifications to follow with a home renovation loan.
At Wildcat Lending, we understand your urgent need for hard money loans, and we’re here to help. We make getting approved for a loan easy. There are no hassles or frustration. Contact us or apply for a loan today. Happy flipping!