What Are The Expenses Associated With House Flipping? Do you know? Are you doing your due diligence before flipping property? If you are flipping houses, then make sure you read this blog post to understand what the expenses are associated with house flipping in Dallas Fort Worth…
Flipping houses can be a high profit investment strategy when you understand the all aspects of the transaction including expenses. You will only maximize your returns when you learn to buy right, and are careful about your costs! If you’re wondering what are the expenses associated with house flipping in Dallas Fort Worth so that you can budget effectively, then here are seven of the biggest expenses you must learn to control.
These are your costs associated with acquiring the property. They will of course include the purchase price of the property but they may also include marketing costs, the costs to meet with the seller, and any clean-up costs, legal fees, or closing costs you cover as a service to the seller.
Demo And RenovationThe things people do to a house is endless. Knowing what to look for and detailed inspections is critical to determining repair estimates.
This is one of the more obvious expenses! These are your costs associated with demolition and renovation. It may include cabinets and counter tops, fixtures and appliances, new carpet and windows, etc. These costs are going to be a pretty major portion of your budget in most situations.
Once you have all the supplies and raw materials, you need someone to do the work! Even if you do a lot of the work yourself, you might need someone to help you or you might have to hire a licensed tech to do some of the work for you.
Carrying costs are often overlooked by the “newbie” flipper but you’ll learn soon enough how important these are: Carrying costs are the costs of lawn care, taxes, insurance, utilities (power, gas, water, sewer, etc.) that you need to pay during the time that you own the property. These expenses will add up, especially if your timeline is extended. The faster you can flip the property, the less money you’ll pay in carrying costs.
The Extras (Dumpster Rental, Licensing And Permits)
There are plenty of extras that you need to account for in your budget but that you might not realize before you start. These include things like dumpster rental or tool rental or even bringing in lunch for the team! And don’t forget to make sure you have the right permits or you’ll end up with another expense — a fine!
Every rehab since the beginning of time has had an unexpected surprise that takes you over budget and impacts your timeline. It could be problems like wood rot, mold or termites, or just a delay due to weather. Nearly every surprise means an increase in expenses to your project so make sure you plan for it in your budget.
You will also incur some selling costs as well, including marketing and furniture rental (for staging) or realtor commissions if you list the home. Be prepared for these costs to they don’t surprise you.
If you’re counting the cost of your potential flip before you start, you’re wise to be asking, “what are the expenses associated with house flipping in Dallas Fort Worth?” Make sure you account for these expenses in your budget and you may want to use a helpful tool such as RehabValuator. Expenses aren’t necessarily bad — after all, you have to spend money to make money!
If you’ve read through this blog post, you’re doing a great job of gathering all the information you need to start flipping like a pro! And we’re here to help: we sell real estate properties to investors like you who want compelling real estate that might make the perfect flip. If you want to check out our inventory for your next flip, click here and enter your info or call us at (817) 550-5069 Opt# 8.
TMC Property Solutions is an accredited business and A+ rated members of the Fort Worth BBB and has been helping families and teaching investors since 2000.
Are you located in North Texas? Come join our West DFW REI Group by clicking here. Network, learn, do more deals.