In my office I have framed the Mark Twain quote “Buy land, they’re not making it anymore.” With the stock markets tossing and turning as they have been for months now, many folks are concerned about securing their investments. By the emails and calls I’m getting lately many are considering real estate as an investment. There are various ways to do that. Some TV shows have buyers thinking about flipping properties and that can be an excellent way to go if you are prepared. It is definitely a different game than buying a home to live in. So here are some tips to consider:
1. EDUCATE YOURSELF – There are many excellent books on real estate investment, and plenty of investors who are willing to share their expertise. Familiarize yourself with municipal zoning and building by-laws and fire and building codes.
2. TIMING IS KEY – Flippers are always working against the clock and many times around the clock. Time is definitely money whether it comes to borrowing funds or paying trades to hang around waiting to do their part.
3. BUILDING A TEAM – You will need a team of experts starting with a lender who will give you the capital you need to buy the property and do whatever work you plan to do. Then you need a realtor who knows the local market and understands your priorities and goals. An accountant, home inspector, lawyer, insurance agent, then maybe plumber, electrician, drywaller, carpenter and painter for example.
4. BE BRUTALLY HONEST WITH YOURSELF – What skill level do you bring to the project? How much time do you realistically have to put in to this? This will help you determine whether you take on a project that only needs cosmetic changes like flooring and painting or a whether you will be ripping out walls, kitchens and baths. Will you need a general contractor to organize and oversee things while you’re at your usual job all day? Have you included all the costs? Do the numbers work?
5. KNOW YOUR BUYER BEFORE YOU BUY – When you are looking to turn a property over it’s not realistic to get too personally attached to it. By determining who is most likely to want to buy this property from you, you can better decide which elements to change, upgrade or leave alone. Will it become a student rental, home to a young family or empty nesters? Will the potential buyer be looking for granite counter tops, solar panels or three more bedrooms?
There are countless investors who have made their fortunes flipping properties and maybe you will become one too. It certainly can be a exciting and rewarding endeavour and for many a full-time passion.
Bonnie Mullen is a full-time licensed realtor serving Guelph, Wellington County and surrounding areas since 1992.