Flipping Houses: A Risky Trend or a Wise One? (Part Two)
Posted on: June 12, 2015 by Aegis General
In the first part of this two-part blog post, we covered some of the risks involved with flipping houses, including not considering the insurance coverage for flipped houses that is needed. Flipping a house doesn’t have to be scary though; this type of investment could certainly reap lucrative rewards. A real estate flip could feasibly provide very large profits, close to the annual U.S. median salary.
Overall, flipping a house gives the investor real world experience in a number of key areas listed below, according to the About.com Money Division. This increases the likelihood that they will be successful in future real estate investment opportunities.
Construction: Whether the homeowner is remodeling or repairing the property, they’ll gain insight into various aspects of construction. This includes understanding the cost of materials and various plumbing and electrical repairs, and learning how to spot larger issues like structural or environmental hazards.
Market Research: In talking to Realtors in the home’s area and browsing sale ads for houses in the same city and neighborhood, investors will get a better idea of what people are looking for; not to mention it will help target their renovations.
Budgeting: One thing almost every real estate investor understands is that unexpected costs will come up. These could include building permits, construction delays, and delays in material delivery, contractor disputes, and more.
Networking: Real estate investors meet many industry professionals when flipping a home. This includes Realtors, attorneys, contractors, building inspectors, insurance brokers, and other investors.
Understanding the advantages and disadvantages of flipping a home can help investors make an educated decision. At Aegis General Insurance Agency we offer a variety of specialty insurance solutions including specialty homeowners, dwelling fire coverage, unoccupied dwelling, and more. To learn more about our personal lines or becoming a producer with us, contact us today at (855) 399-0966.