4 Dangers In Flipping Real Estate

Dated: 04/14/2014

Views: 1865

If you have recently purchased some real estate in Virginia Beach for investment purposes, you are in good company. Recent reports suggest that as many as 25% of these purchases are made by those who plan on using the property for investment purposes only. If you hope to "flip" the property there are 4 things you must be aware of that can put a crimp on your profits.

1. Property Taxes.  Keep the property for a few years and you may experience a surge in property taxes especially if your taxes are reevaluated during that time. Some hot real estate markets have seen taxes nearly double in just 5 or 6 years.
2. Renovation Expenses.  You may have purchased a "fixer upper" at a bargain rate. Once your project is complete will you be able to recover the expenses and make a profit especially if the value of your renovated property is above those in your neighborhood? In addition, can you withstand a correction in real estate values?
3. Insurance and Mortgage  Costs.  You will pay more for homeowners insurance if you do not occupy the residence and you have tenants. If you are financing the property you know that your mortgage rate is higher as well.
4. Rental Pressures.  A market saturated with rentals will mean that the rents you can charge will be less than what you had hoped to receive. In some markets you are required to get special licensing in order to be a landlord. In other markets the legal rights of tenants mean you could have a lengthy and expensive battle in ridding yourself of a bad tenant. Will the lower income levels coupled with the added expenses drag your investment down?
Of course, you can limit your risks [and costs] by doing the majority of the upgrades yourself, appealing excessive property tax increases, and finding for yourself a trusted and dependable tenant. It isn't easy flipping a home, but with a lot of pluck and determination it can result in strong profits for you.
Blog author image

Chenea Powell

Whether it is your first home or the home you plan to retire in, I will be there to ease the process every step of the way! I find great pleasure in helping people achieve their goals in real estate a....

Want to Advertise on this Site?

Latest Blog Posts

Tips Of Getting Finance On Your Mortgage

Have you been wondering how to get money for a new home? As the saying goes there are so many ways of killing a cat, still there are so many ways to raise funds legally and own a home of your.

Read More

Inexpensive Home Renovation

Have you been wanting to renovate your house? You can change your house to a modern one with less money than you had planned for. The following are tips that you should keenly follow and achieve

Read More

Feb 1 2018 22814 1

Debunking Myths To Home BuyingFinally ready to make the transition into home ownership? That's awesome, and in this exciting time you can be turning to friends and family for an insight into the

Read More

The Right Time To Purchase A House

You don’t just wake up and buy a house, it takes time and research for a person to buy a one. Many potential buyers try to predict whether the home values are falling or rising so that they can

Read More