Trading properties is a great investment for some, but it’s certainly not as glamorous or profitable as many TV shows make it out to be. Too often, people watch reality shows on TV where people buy, remodel, and sell houses for a profit and assume it’s as simple as it appears on TV. The reality of the situation is that there is a lot of work involved in remodeling a home, and you need to know exactly what you are getting into to make a solid investment.
Trading property refers to buying houses at a lower price, renovating them, and then selling them at a higher price for a profit. The goal is to buy cheap and spend as little as possible on upgrades and get the most out of that investment. For example, someone might spend $85,000 on a major repair and decide that they need around $64,000 in repairs. To be successful, that means they’ll need to sell the house for at least $149,000 to break even, so repairs need to be where they count most.
You also can’t assume that renovating a house and turning it into a high-priced dream home will make you a lot of money. You need to determine what the value and style of the home should be based on what type of home it is, how much you paid, how much you are willing to spend, and what kind of neighborhood the home is in. I wouldn’t change a house and include things like marble floors or other luxurious features when the house is in a working-class neighborhood, for example. It’s all about getting a house at a low price and making improvements that suit the house and its location to make a profit.
You need to know what buyers want in the market you’re selling properties in so you can give them the best end result. The best people in the remodeling business are the ones who can line up buyers before the property has even been purchased or before work begins. You can find investment properties through local real estate agents, advertisements, and even through the website of HUD and other investors or lenders. However, if done correctly, selling property can be a great investment vehicle.
