The notion of flipping a Warwick house is easy: buy a run-down house, arrange for a bit of remodeling, and after that sell it for a much higher price. Without a doubt, house flipping has fetched large returns for many investors all over the country. But then again, flipping houses also come with a high degree of risk, and a flipping project can soon turn out to be a financial nightmare.
House flipper Carol Sankar of Charlotte, NC details one particular project in which the home was burglarized multiple times during the remodel. As she was nearing the end of the project, she arrived at the home to find that the kitchen cabinets had been stolen right off the walls. A dishwasher and a refrigerator also disappeared. Because the property was in an area with few security measures and a low police presence, there was little Sankar could do to regain her stolen materials and appliances.
A different incident befell Daniil Kleyman in Richmond, VA, where he purchased a project house for what he originally considered was an easy house flip. An experienced investor, he prepared a preliminary market assessment on the property and assumed to be able to remodel and sell it for five times his cost. But what happened next was Kleyman made on several bad decisions that ended in him losing money on the flip.
Not only did the first contractor he hired left the job and fled with his money without achieving the job he was contracted to do, but Kleyman had also used the wrong equivalent properties when estimating his post-remodel sales price. He was forced to list the property for far less than he had meant. And then the property was burglarized, stripped to the walls, plumbing broken and flooding the basement. After repairing the damages and restoring the stolen appliances and fixtures, Kleyman was finally able to sell the house at a loss to a less-than-enthusiastic customer.
Kleyman’s story is one that depicts just how long the list of problems can potentially be when flipping houses for resale. This investor would have significantly benefitted from accurate market data, proven construction professionals, and the expertise of property management professionals from the start. Consider how this situation might have differed had he invested in the property as a rental home instead.
By first consulting with an industry expert like Real Property Management Providence, he would have received a detailed market assessment prior to purchasing the property. He may have known beforehand what the market value of the property was, possibly even changing some of the choices he made earlier in the process.
RPM Providence would have also delivered Kleyman with the names of reliable remodeling and repair vendors in his area and would have monitored those vendors consistently, thereby reducing the probabilities that the contractor he hired would take his money and run. Lastly, the team would have accurately priced and marketed his new property for him, finding quality tenants who are more than willing to pay a competitive rental rate every month for as long as Kleyman wanted to keep the home.
In the face of these clear benefits, some investors still have the notion that working with a property management company is too expensive. Nevertheless, as this example proves, Real Property Management Providence offers a range of valuable services and industry contacts that can help investors make far more money long-term than flipping houses might bring. In fact, we handle all of the operational demands of owning rental properties, leaving you free to work on other aspects of your real estate business.
With Real Property Management on your investment team, you’ll have the guidance of experts dedicated to making every one of your properties one of the best long-term investments you can make. For more information, contact us online or call us at 401-272-3300 today.
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