Best Practices for House Flipping To Increase Return on Investment


Best Practices for House Flipping To Increase Return on Investment

House flipping is the process where real estate investors purchase houses and sell them at a profit. House flipping comes in two different types. These are:

  • An investor purchases a house in a market with already increasing home values, holds the property for a couple of months and resells it at a higher price to make a profit.
  • An investor purchases a house which is capable of gaining more value after a few renovations. They proceed to make the necessary upgrades and resell the property at a much higher price.

An investor can achieve success from a house flipping exercise by adopting the following best practices.

Invest in Entry or Standard Homes

The housing industry has evolved over the years. Today, there is a wide variety of housing options to choose from. Whether you are looking for single-family houses, studio apartments, 4 or even more bed roomed houses, you are sure to get something that fits your needs and budget. 

Choosing the best house for you often depends on your experience in the world of house flipping, your budget, and extensive market research. However, if you are a novice real estate investor, you want to first purchase standard or entry homes seeing that chances are high that there will be sufficient demand for the same. 

 Often, an entry house will have between three and four bedrooms and is ideal for either a small or medium sized family. The price will vary depending on the location. The point here is to get a house that will be easier to resell. Ensure the house you choose will need minimal renovation. 

Evaluate Market Data

Doing your due diligence is critical. Conduct extensive research in a bid to understand market trends. Find out what your target market needs. You also want to conduct a reward versus a risk evaluation. Analyzing how much cost you will incur in renovations will help you make conversant decisions and avoid costly mistakes. 

Just to be sure, you could collaborate with a reliable and established home inspector from Cosmo Values. Experts understand the market better and will evaluate the property to ascertain any underlying damages that you would otherwise not have identified.

Establish an Ideal Location

While you can easily renovate houses, changing or enhancing the location is unachievable. This is why you should research extensively in order to identify the right location if you want to maximize your return on investment. 

Some factors to consider when it comes to location include how fast properties within the location are selling and the selling price of properties within the location. When you are a novice investor, choose homes that are closer to you to ease the process of conducting research. 

Adopt a Selling Concept During Renovation

While refurbishing and renovating is one and the same thing, there is a difference between renovating a home for the purpose of selling it and refurbishing a home to improve your living standards. Rather than opting for a personal touch, renovate it with potential buyers in mind. 

You may want to adopt an inviting albeit a general approach with the purpose of capturing the attention of your buyers. Remember, the housing industry is changing and home buyers are looking for modern fixtures. Conduct research extensively to establish which fixtures are in demand at a specific moment. You want to renovate the home in a manner that will maximize your returns. 


House flipping can work well if you collaborate with the right team. You may want to conduct research on your own and involve professionals during the purchasing process. Remember, you will need to include a team of house inspectors, lawyers, and realtors for a successful process. Once the purchasing process is finalized, you will want to work with good builders and contractors. Always vet your team before beginning the project just to be sure that they are qualified enough to execute the project to your satisfaction.