Is flipping homes in Albuquerque a good way to make money? Many people are looking for new ways to bring in an income, and flipping homes may sound like a smart business move. It can be, but only if you do it right. Flipping homes ends up being harder and more expensive than most people realize. And if you think it's a way to get rich quick, then now is a great time to drop that perception. Flipping homes should be treated like any small business, as it requires time, money, planning, patience, skill, and effort.
Here are some mistakes to avoid if you plan to flip a home for sale in Albuquerque:
Not Enough Money
It goes without saying that real estate is expensive. Plus, if you need to finance the home, then you'll being paying interest, which adds up over time.
Although the interest on borrowed money is still tax-deductible even after the passage of the Tax Cuts and Jobs Act, it is not a 100% deduction. Every dollar spent on interest adds to the amount you'll need to earn on the sale just to break even.
And if you use a mortgage or home equity line of credit (HELOC) to finance your flip-house purchase, only the interest is deductible. The principal, taxes and insurance portions of your payment are not.
You need to make sure you research your financing options to find a mortgage type that bests suits your needs.
It's also not as easy to make a profit as it used to be. Profit margins have shrunk over the years. That doesn’t mean there isn’t money to made, but it does mean that you need to be more careful.
It also costs money to fix up a home. Keep in mind that the sale price needs to be more than the combined cost of buying the home, holding the home, and the cost of renovations.
Not Enough Time
Time is the other major investment to consider when flipping a home. It can take months to find the right property in Albuquerque. Then you have to take to to fix it up to sell. When you're done with the work, you then need to schedule inspections to make sure the property complies with applicable building codes before you can sell it. If it doesn't, you'll need to spend more time and money to bring it up to par.
If you work a regular job, then you'll have to spend your free time to do the renovation work. Even if you hire professional help, you still need to spend time to supervise the work. And of course, the money you spend on help will cut into your profit.
Then comes the selling process. We can help you sell your home quickly and for the best price. But that process still takes time, sometimes weeks or months.
Not Enough Skills
If you're a professional builder, carpenter, or plumber, then flipping a home will come much easier, as you already know how to fix up a home. You may also have a union job that provides an unemployment check, which will let you work on the home on the side.
The best way of making money when flipping a house is through good old-fashioned sweat and effort. If you're handy with a hammer, enjoy laying carpet, and can hang drywall, roof a house, and install a kitchen sink, you've got the skills to flip a house.
On the other hand, if you don’t know a Phillips-head screwdriver from a flat screwdriver, you will need to pay a professional to do the renovations and repairs. And that will reduce the odds of making a substantial profit on your investment.
In the end, flipping a home takes time, money, and patience. If you have all three of those things, then you can make a success out of flipping homes in Albuquerque.