Even in our current climate, house prices are expected to rise by at least 2% over the next year.
With that in mind, buying a flipped house can potentially be a better investment. This is due to the fact that sellers are usually looking for a quick turnaround and profit.
But should you invest in a flipped house?
In this article, we will discuss the pros and cons and try to determine if it is the right choice for you.
What You Need to Know About Buying a Flipped House
In its simplest terms, a flipped house is bought with the sole intention of reselling for profit.
The idea is to buy low, finding a house that is in need of some basic repairs. Although it isn’t unusual for people to buy run-down houses in the hopes they can make a bigger profit.
Once remodeled or refurbished, the buyer then becomes the seller. After having invested time and money into a property, they aim to sell for as much profit as possible.
Pros of Buying a Flipped House
Buying a house can often be overwhelming and many houses require meetings with developers for potential future work. When looking to buy a flipped house, many of the stresses have already been dealt with.
Move-In Ready
In most cases, all of the work has already been done. These houses are designed to be moved into right away, so you shouldn’t need to do any further work.
In most cases, buying a flipped house can cut down the time spent in limbo and should prevent delays in your move.
You Can Make It Your Own
In some situations, the people flipping these houses are not developers or working in a big construction team.
With that in mind, if you find a couple or person who is known to flip houses, you might be able to make a deal before they finish work.
By negotiating a contract during the construction process, you can have input in the overall design and finish of the house.
Flipped Houses Can Be Negotiable
House flippers are looking to make a profit.
In some cases, they will have their house on the market but also look to auctions for a faster sale, which can be beneficial to buyers.
However, if a house has been sitting unsold for a period of time, chances are you can offer a lower price and save for the things that really matter.
Cons of Buying a Flipped House
As a buyer, it is important to always do a thorough check through your new home.
However, given the sellers’ main goal is to make a profit, there are some extra things to take into account before investing in a flipped house.
The Quality of the Construction
Many house flippers will do construction work themselves in order to save money, even if they have little to no prior experience.
This can lead to quality issues that may not be noticeable at first.
Similarly, house flippers without the necessary experience may cut corners and you might only find this out when you are looking to resell.
They Focus on the Looks and Not the Content
A good house flipper will work to make their houses look great for buyers.
However, behind the fresh paint and new siding, it can be difficult to see deeper issues.
Rusty pipes or a leaky roof are often overlooked in favor of new kitchen countertops. As a buyer, it is important to ask about home upgrades before buying.
You May Need to Do Extra Leg Work
When buying a flipped house, you want to know that everything is up to code and that you won’t need further work done. This can include:
- Performing a more thorough walk-through
- Looking into the flippers’ history
- Asking for all paperwork on upgrades
- Requesting copies of permits
- Checking the house’s history
- Bringing in an agent to assess the house’s value
- Crafting a carefully worded buyers agreement
- Researching different loan options
Should You Buy a Flipped House?
Buying a flipped house can save time, stress, and money.
There are some things to be mindful of, such as cutting corners and rushed work.
But doing your homework, you can check the quality of the construction and confidently move into a new home that requires little to no further development.
Check out our featured listings to see if we have the right house for you.