Are you looking for a fun retirement project that can also be quite lucrative? It can often be difficult for seniors to find work in retirement, but there are many different options they can explore. Although it can be a bit more complicated than starting a dog-walking business or working in customer service, house flipping can be a great investment for seniors! In the greater Utica-Rome area, home prices have been steadily increasing, indicating that there is more interest than ever. Seniors who are interested in house flipping can begin purchasing fixer-uppers and working with a professional like Jerry Newman of Brown Realty after renovations. Here are a few tips to help aspiring senior house flippers get started.
Exercise Appropriate Caution
Remember, while house flipping can be a profitable and sustainable income stream with the right approach, it can also turn into a costly mistake if you make hasty decisions. As a retiree, you don’t want to hurt your portfolio with poor investments.
Yes, buying a fixer-upper is cheap, and it’s much more affordable than buying a home that is practically move-in ready, but this also means that you need to be ready to invest in repairs and renovations. And if you don’t have the capital to cover these costs, your finances will be adversely affected. Therefore, when you’re figuring out your overall budget, don’t forget to tack on an extra 20 percent for electrical work, HVAC system upgrades, issues with the foundation, and eliminating mold or asbestos.
So, what should you look for in a fixer-upper to ensure that it’s a smart purchase? Ideally, you’ll want to look for a home in an up-and-coming neighborhood that primarily requires minor repairs. LendingOne states that you can spot neighborhoods that will be smart investment choices by checking out factors like crime reports and the number of new businesses and housing developments in the area. You can also assess whether home prices have been increasing.
Financing Your Purchase
You’ve found a property that you would love to buy, flip, and sell - but now, you’re wondering how to cover the upfront costs. You’ve probably purchased a home before, but buying an investment property of any kind differs from buying a primary residence. In order to finance your new property, FinanceBuzz states that you could consider applying for an FHA 203(k) Rehabilitation loan, using a credit card with a 0% interest rate, or simply taking out a personal loan.
Register Your Business
Before officially getting into the house-flipping business, you’ll need to register your new business with the state. This involves learning about the different business structures available to you. Many business owners register as an LLC, due in part to the tax-related advantages it provides. If you decide to register as an LLC, learn about the guidelines set forth by the state of Arkansas. Working with a formation service can help ensure that all the necessary documentation is filed according to regulations.
Planning for Repairs
Which repairs should you prioritize? Naturally, if there are any serious structural issues to address, like fixing the foundation or replacing the roof, you’ll want to take care of it as soon as possible. In addition, you should aim to invest in features that will boost the value of your home. This could include updating the kitchen appliances, installing a new front door, giving your home a fresh coat of paint, and improving your home’s energy efficiency.
Choosing (And Paying) Contractors
You might be able to take on certain renovation projects by yourself, but chances are, you’ll need to hire a few contractors, too. Ask your loved ones for referrals and check out the contractors’ portfolios before bringing anyone on board. It's always a good idea to check the Better Business Bureau for reputable contractors that warrant their work.
Make sure to decide on reasonable pay schedules with your contractors before the projects begin. If you plan to expand your house flipping project into a full rental business in the future, you will want to invest in a payroll service for any contractors or employees you work with.
For lots of seniors, continuing to bring in income throughout retirement is the best way to feel truly financially secure. House flipping is one way to do that! By following these tips, seniors who are curious about house flipping will be able to get started with a strategy priming them for success.
If you’re looking to buy or sell a house, let Jerry Newman of Brown Realty help guide you through this process. You can get in touch by calling (210) 789-4216.
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