According to recent findings, the Pakistani real-estate market offers tremendous potential for profits and high returns on investment on flipped properties. Pakistani buyers are always on the lookout for affordable housing options, both for sale and rental purposes. Hence, there’s a good chance you can earn maximum profits on your investment and enjoy the many benefits of house flipping.
What is House Flipping?
House flipping is when a real estate investor purchases houses and sells them for a profit, after doing some renovation and additions to the property. Investors who purchase a house with the intention of flipping it, might consider reselling the property quickly. That’s because the longer a house sits on the market, the more difficult it becomes to sell it. Ideally, the time between the purchase and sale of a flipped house should be within six months to a year.
In case you don’t know much about flipping properties, there are two different types of house flipping:
- An investor purchases a house or property in a market with rapidly rising values. If there is no need to make any updates or renovation, the investor holds the property for a few months, and resells it at a higher price to make a profit.
- An investor purchases a property that is likely to increase in value with appropriates updates and repairs. Once, all work gets completed, the investor sells the renovated house for a price much higher that what they bought the property for.
While the idea of repairing or renovating a building/house is challenging, the rewards are endless. You just need to be prepared for all the upcoming challenges and have the necessary cash flow to invest in a property. Moreover, investors must have prior knowledge, patience, and an eye for detail to implement a successful house flipping business plan.
Some investors shy away from purchasing an old property since they fear the risks of flipping houses. However, if you work with the right contractors and seasoned real estate agents, you can close a lucrative deal to make good profits.
Flipping houses with no money is rarely a good idea. Hence, it is also crucial that you have a good amount of capital up front.
Benefits of House Flipping
Here are three major benefits of house flipping:
- Quick returns
- More experience and knowledge
- Goal satisfaction
We have discussed each of these advantages in detail below:
One of the most obvious benefits of house flipping is that you can make good profits in a short span of time. For real estate agents, companies, and individuals who do this for a living; this is a lucrative business.
Not only you can make a substantial profit out of every deal, you can also continue this business as a side-gig to secure future finances.
Personal and Professional Growth
It takes a good amount of money and time to gain significant house flipping experience. But every ounce of effort is worth it. When you regularly purchase homes and materials, you develop good negotiating skills and cultivate your crisis-management abilities to delegate time and tasks.
Personal development leads to professional growth as you learn to close multiple deals in less time, earning more profits. Gaining an in-depth knowledge of the real estate industry, popular construction trends, and the local market gives you an opportunity to grow as a professional real estate investor. You should also work on building your network to connect with as many contractors, attorneys, and investors who are interested in buying flipped properties.
Sense of Achievement
Some benefits are beyond monetary. There is a personal sense of satisfaction and accomplishment when you flip a property that had little or zero value before. Seasoned real estate investors can see the potential in an undervalued property by judging important metrics such as location, amenities, commuting distances, and nearby facilities.
Flipping houses also improves the quality of life in a neighborhood. But you will have to pour a lot of blood and sweat into an old house before it materializes into a potential property. It is certainly not an easy business and there are a few pros and cons of house flipping.
Since, you’re working for yourself, you are your own boss. But that can have its own drawbacks. Organize your workload and delegate tasks. Whether you’re a contractor or a real-estate agent, you can’t handle everything alone.
But, if you fail to do your homework and do not buy an appropriate property in the right market, you can suffer from a major loss. Just make sure you pay attention to the demographics and dynamics which are trending in your chosen community.
You need to collaborate with a team of professional contractors and professionals from all areas of life to repair or re-build your property. It also helps when you market your property the right way to attract potential buyers.
What you should do
First-time real estate investors typically commit the mistake of investing in just about any property to flip it later. However, not all houses guarantee profits. That’s why successful flippers pay close attention to several factors for reaping the maximum benefits of flipping houses.
If you are flipping propertyfor a living, the best thing to do is to work as a team. Find the best contractors and skilled professionals who can get your work done in less time and within your budget. Although, this is a business that needs a lot of work, the rewards you get at the end is matchless.
Flipping houses gives you an opportunity to earn quick profits, provided you pay attention to everything before investing in a property. The key is to search for homes that have a solid foundation. You can take care of the rest of the details later. Make an estimate of the building, plumbing and other expenses which you need to bear. That will save you from any major losses and reap the benefits of flipping houses.
You need professional services to cover all aspects of house flipping. It is crucial to find the best contractors that best fit your budget. But never hire amateurs for a complicated flipping job or you will go overboard your budget.
If you’re planning to make a long-term investment in the real estate market, there are two options you can consider: investing in land or buying a house. We also have a checklist for novice buyers, in case you’ve just bought your first house.
Also, if you are considering flipping houses, you might want to check out houses for sale in Karachi.
For more real estate-related updates, stay tuned to Zameen Blog, the top real-estate blog of Pakistan.