Flip That House, Home To Flip, Income Property…I am sure that almost everybody that has watched any one these shows was intrigued by the idea of getting in the house flipping game…it looks so easy, fun, profitable…
LET ME TELL YOU THE TRUTH: It is hard, very competitive, stressful and hard to make a profit!
I was a home renovation contractor for about 10 years and I used to flip homes in the early 2000s. I consider myself very lucky that I was able to play that game at that time, it was not “trendy” yet and competition to get your hands on a fixer upper was not as fierce as it is today.
Those were the times were you could get a fixer upper Victorian townhouse in Leslieville for $240K and sell it a few months later for $350K or a Detached house on the Danforth for $250K…the good old times!
Around 2005-2006 things changed…that’s when I noticed a significant increase in competition: everybody was getting in the game…contractors, investors, TV flipping shows enthusiasts and also home buyers that desperately wanted to live in a certain neighbourhood or school district and could only afford a fixer upper. That is when people started paying crazy prices for fixer uppers and it became very hard to get your hands on one and make a decent profit.
Getting a good deal on a fixer upper in Toronto is still possible but not that common. On a number of occasions, I have seen well-intentioned, hopeful flippers lose money.
Let’s face it, there is a lot that can go wrong when buying a neglected home. Most ‘flippers’ buy these homes and soon find a host of unanticipated problems lying under the surface, anything from foundation cracks to termites, mold, faulty wiring or even asbestos. Often the cost of renovations, mortgage payments and invested time ends up amounting to more than the eventual profit margin.
Now as a Realtor I help people on a regular basis to find the right home for the right price, my past experience as a home renovation contractor comes in handy and my clients appreciate that.
I know which listings are flips that were purchased and renovated within 12-18 months and my “half fast job” radar goes up immediately! Over the years I have seen some terrible, cheap renovations that were clearly done for only one purpose: Flipping.
If you are thinking of flipping…do it right! Most home buyers are educated and skeptical of Flips. Get the permits, hire professionals, don’t cut corners, renovate as if it was your own home, buyers will recognize and appreciate that and pay the extra dollars!
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