Real estate business has always been a profitable business because of the simple reason. It always appreciates. If you purchase the land, it is more reliable as profit is guaranteed once you sell it. Even if you take a small house and sell it, your life changes drastically. However, it is not that you become a millionaire overnight. There are certain aspects that cannot be ignored to earn more profits. DC Fawcett suggests the most effective ways to get profit in real estate.
Effective ways to get profit in Real Estate
Flipping is described as a purchasing a revenue generating asset which is resold quickly for profit. Fixing or flipping is not as simple as it is said. When you buy a house that requires some work to fix it up before selling it. It takes time to get the right buyer, right deal, right financing and right contractor. The house needs maintenance from time to time and repairs if required. If there are any repairs and maintenance, do not forget to add that when you are selling the property. The effective ways to get profit in real estate are :
- Always stick to your numbers –
You need to know what ARV is. The ARV abbreviation is the property’s after repair value which you are going to flip. It is the final amount that the house or they will be sold after it is repaired, rehabbed and has a white picket fence. It means the purchase and rehab cost is 70% of the final selling price. If you quote more than that, you will be inviting trouble for yourself which affects your investors.
- Know the local market –
More than the real estate news on TV, you need to know what is happening in your town, city, area, etc. You have to be aware of certain factors in your area and locality such as :
- Do you reside in the area with rising prices?
- Do you want to buy this property in a transitional neighborhood or established one?
- What about the schools and the demographics?
- Know Your Buyers and Rehab –
After you know the numbers and market, you also need to know what types of buyers are residing in that area and rehab the house according to their needs. In the previous topics, it has been said that you need to do what is best for the customers and not what is best for you as it plays a very important role in the business. You need to apply this fundamental in this case too.
- Avoid being greedy –
People have the tendency to overprice their property, thinking they can brag and exaggerate about their property when it comes to selling it. That’s the mistake they make. If they are offered the same house at a lesser price, you lose the deal. Even if you undervalue a bit, there is a scope to sell the property. However, this not advisable all the time.
DC Fawcett concludes that Apart from your efforts, you need to use your common sense and be honest with your guides as much as possible.