If flipping and selling a home in New York is as easy as it looks on TV, there would be far too many real estate moguls in the Big Apple. Buying, flipping, and gainfully selling a fixer-upper home is complex. Without information and guidance, you could burn your fingers.
We are here to help you avoid that.
This guide will give you insights on picking a flipper home and what to consider when renovating. But first, here is a look at the house flipping market in New York and some locations you may want to explore.
The NY house flipping market
The pandemic caused a significant reduction of home listings in New York. There were only 40,776 new units available in May 2021 compared to 50,038 units in May 2020. On the other hand, enticing mortgage deals like 2.94% for a 30-year fixed mortgage made it a sellers’ market. The demand for flipped homes skyrocketed. The market became so good that even unintentional flippers were cashing in.
Conditions in the market have not changed much. But you have to pick your horses right.
The cardinal rule in real estate is still the same, location, location, location. The top spots are New York City, Albany, and Rochester. However, owner-occupiers looking for space and affordability are finding areas like Wyoming County irresistible. Data shows that the population density is fair, and the cost of living is below the national average. On the other hand, investors are zooming in on high-growth areas like Rochester, Wyoming County and Monroe County.
Armed with this knowledge, here’s a guide for renovating when flipping.
Pick the right home to fix and flip
Before you buy a home to flip, visit it and examine the valuation and inspection report. Choose homes that require minor or cosmetic changes and avoid significant fixings like roof and foundation repairs. Look for professionals to help you understand the comparative market analysis of the area. Also, look for reputable contractors to give you an estimate of the costs and the time it would take to flip the home.
As you negotiate the price, remember not to pay more than 70% of the After Repair Value (ARV) of the house. Once you have settled on a property, use this guide to renovate.
To renovate or update?
The first question any flipper should address is whether to renovate or update? Renovation entails removing some of the fixtures and features and replacing them with new ones. Updating, on the other hand, is making cosmetic changes like repainting or resurfacing existing surfaces.
Choosing between the two should be a purely economic decision – not emotional. Sometimes repainting the walls and resurfacing the kitchen cabinets adds more value than fixing a new room. Also, refinishing an existing bathtub could be more profitable than bringing in a new one. So, seek to maximize what you can update.
Work with a contractor
Unless you have experience in the construction and renovation industry, we strongly suggest working with a contractor. It is the only way you can work with fixed numbers and forecast your profit.
Check out reputable contractors who would fit your project. Review your ideas with them and see how they respond. If they suggest changing materials or fixtures for no apparent reason, consider dropping them off the list.
Watch your spending
Watch your spending and set aside some cash for unexpected costs. Even when watching TV shows like Flip or Flop, you will notice they often say, “this cost more than we expected!” In New York, such price changes are not a surprise.
Remember, you don’t have to fill the home with designer fixtures. It is all about the bottom line, not emotions.
Begin with the exterior. That is where you make the first impression. Try to create an appealing curb. Perhaps it is the stroke that will turn admirers into buyers. If thorough cleaning and mowing can help the exterior look enticing, give viewers a reason to look.
Move to the kitchen. It is one of the most crucial selling points for any home. Make sure that all functions work flawlessly. Fix any water leakages, gas, or electricity issues. Then, move to resurface or repaint the fixtures like cabinets and countertops. If replacing these fixtures will create a wow look, do not fail to make an impression. But remember, do not overspend. Keep the kitchen renovation within budget.
Bathrooms should immediately follow in renovating importance. Like the kitchens, begin by ensuring all the functions work well. Investing in professionals to redo the bathroom could be the deal changer for your home. But remember to keep it professional. Do not install a designer bathtub worth $8,000 when you can get a great one at $1,200. Also, keep the bathroom spacious and, if you can, multifunctional.
Dress up the bedrooms and spare rooms with decorative doors, fresh paint, and new windows. But avoid overdoing it. Leave the room with open spaces and let the imaginations of a potential buyer run wild.
A final world on renovating in New York
Fixing and flipping houses is not as easy as it looks on TV. Rookie flippers often land excellent properties, ideal for flipping, but many overstep. They become too emotional about the repairs, spend too much, or transform the homes to their style. Remember, you are preparing the house for another buyer. Keep it open and within the budget.