There are many people out there who enjoy driving and dealing in the real estate market. These people like to buy houses, hold them for a short period of time, and then sell them for a profit. This sounds like a great idea and it is, but you have to be smart and really do your research. This can be quite lucrative, but it can also be a disaster. The keys are often timing and location, but you can also make a profit by buying a home that needs a major renovation and sprucing it up.
Why is time and location important? Well, let’s look at two interesting examples. A few years ago, though the hot desert city of Phoenix, Arizona was growing, it was moving at a reasonable pace. Then about 5 years later… BOOM! Everyone seemed to be moving to Phoenix from the northern states and California. So the market skyrocketed. A 1,600-square-foot townhouse that was purchased for just over a hundred thousand dollars just a few years earlier was now worth twice that. That’s a nice profit. Now, things seemed to be going well and everyone was making money, but there is a limit. Right now, in Phoenix, people who bought their home at the BOOM time wouldn’t be able to recoup the price they bought the home for just a year earlier.
The ability to hold out a bit longer is beneficial in this scenario. This is the reason why timing is important. The housing market can only boom for so long, even in places where everyone wants to live. Our second example is San Diego. A few years ago, although housing was expensive, it was much less than it is today. So people who sell a bit later can still make a profit, and during certain times the turnover can be fast. Again though, people will only go so far and are only willing to pay so much. Some friends of mine were trying to sell their house just as the BOOM was coming down and found they couldn’t get their asking price so they had to come down and are still waiting. You never know when the turn will happen until it has already done so. Experts argue that places like New York City and San Francisco will always be booming, but there’s time involved in those places, too.
The next way to make a profit in almost any city is to buy a home improvement challenge. This involves a lot of start-up cash. Any home improvement adds value to a home, but some add more than others. Be careful when selecting a home improvement contractor for larger projects and always look for quality products at good savings for smaller projects. Buying in bulk is better if you can. Anything you do, from kitchen remodeling to sunroom additions to fireplace remodeling, will help you get the best price. Be sure to thoroughly research the market and location and don’t overspend.
These types of investments can be challenging, exciting, and lucrative if you know what you’re doing. Make sure to always do your research and talk to other people trying similar projects if you are new. Good luck.