It might seem easy to make big bucks by buying a property, sprucing it up, and then flipping it for a much higher price like the way we buy houses fast companies does. But once you get to the actual process, things start to fall out of hand. If this is your first attempt at house flipping, you can increase your chances of making money by avoiding some of the most common mistakes committed by amateurs.
When starting your search, you might put too much attention on the value of the properties. This means limiting your search to the houses with the lowest price, no matter where they’re located. But buying in the wrong area can lead to disastrous results. An agent might try to lure you in by telling that the area will be the next big thing in the city, but don’t fall for the hype blindly. It’s a safer choice to invest in areas that have been proven to be sought after by plenty of home buyers.
If you find a property in mint condition at below market price, then consider yourself lucky. In most cases, however, you’ll need to do at least a few repairs. Beyond the basics, you can also renovate some areas of the house to make it more appealing to buyers. But don’t overdo it. A marble bathroom might seem to make sense, but for some, it only drives up the price without much-added functionality. It’s also vital that you don’t go cheap when it comes to materials.
Lastly, it’s important that you understand the real value of the home. You might think it’s worth hundreds of thousands more than it’s worth. If you’re not willing to let go of the property for an unreasonably high amount, then you’ll never make a profit in house flipping.
Understanding financial market trends help you to find good stocks to invest in. This is certainly true in the case of the stock markets. While the secret to real success is a balanced portfolio that has normal amounts invested over an extended period, starting such an investment plan when a bear market is looming is not always a great idea. On the other hand, a bull market should never be let go as an opportunity. If your current employer offers you a 401k program with matching funds, at least do enough to trigger the match, so you don’t leave any free money on the table.
Keeping up with financial market trends also means you can balance your portfolio appropriately. While it’s good to focus on a right mix and balance, take a look at each sector and industry on its own merits. Housing might be rising in values, but you’ll have to figure out for yourself if there’s profit potential to cash in on, or if there’s a bubble forming that could cost you money in the long run.
Knowing how the financial markets are also going matters if you’re considering leaving your job or changing careers. That’s a lot easier to pull off when things are going well, and unemployment is low. On the other hand, a recession or volatility can make companies penny pinchers and avoid hiring people, so that’s not always the best time to jump ship.
While you seek to understand financial markets and their trends, don’t just look at GDP, jobs, and stock markets. Also keep an eye on bond markets, mortgage rates, currencies, and commodities. Consumer confidence indexes also matter quite a bit, compounding returns as how private spending generates two-thirds of the economy and activity it relies on.