Since HGTV shows such as Fixer Upper and Flip or Flop came on the television scene, partnered with the opportunity for a great investment, flipping homes has become a popular trend. In 2017 alone, more than 200,00 homes were flipped in the United States. This is the most houses flipped in the last 11 years. So what does flipping a house in Tacoma mean?
Flipping a House in Tacoma
The act of flipping a house in Tacoma refers to when a property investor buys a house with the intention to fix it up and quickly re-sell it. The idea is that the investor can buy the house and fix it up for less than what it could sell for once it’s done. Another definition of house flipping is purchasing and reselling properties in a market where home valuations are on the rise. For example, the property investor might seek out foreclosed homes, or low-priced homes, purchase the home, and wait a few months to sell it when the prices increase.
Things to Think About Before Flipping a House in Tacoma
Like any investment property, house flipping has it’s pros and cons. Ask yourself these questions before you pull the trigger.
- What’s the price? Remember, you want to mark up the price once you re-list it, so it’s important that there’s room to grow. If you’re buying a house at maximum price in the area, the room to grow is slim, and you’re not likely to gain a profit. This is especially true since you’re putting in costs to fix it up.
- Market conditions in your market. What’s the demand for housing in your local market? Is it likely that’ll you’ll have enough demand to sell your home in the next few months? Zillow Zestimate is a good tool to utilize to research market trends.
- Condition and location of the home. How much work does the home require? Are there major problems, like foundation cracks, or roof leaks, or is it all updating the interior design of the house. It’s important to get a home inspection done so you know what you’re getting into. Location wise, you want to make sure the home is in a good location that will keep the demand high for the area, helping your chances to resell the home in a few months.
- Check your credit. Do you have enough money to cover the cost of the home, closing costs, and any expenses associated with fixing up the home? If not, how’s your credit? Talk with your lender to make sure you’re in a good position financially to make this investment.
If you’ve answered all of these questions with confidence that flipping a house in Tacoma is right for you, then make sure to secure a good real estate agent. They can offer great insight into local market conditions, strategies, and negotiations. Finally, you’ll need an experienced lender on your side to help your with the financing of your fix up, both funding the purchase of the home and covering renovation costs. At Guild Mortgage Tacoma, we are experienced in helping our clients with flipping homes in Tacoma, and would be happy to help you.