Many people buy a home with plans to sell it again – either they are buying a starter home, or they are buying an investment that they intend to flip and sell for a higher value. Flipping isn’t as easy as it looks on TV, though. If you are planning to sell, keep these tips in mind:
1. Focus on cosmetic changes. You will get a lot more bang for your buck if you buy a house that only needs new carpet and paint. Planning to gut the house will likely not give you as much of a return on your investment.
2. Look for a legal apartment. Trying to create an apartment out of your basement sounds like fun, until it’s not. If the apartment is already there, and even better if it’s legal, you will save a lot of headaches and have a great selling feature for the future.
3. Buy within your means. If your mortgage is small enough that you can pay it down quickly, you will save a huge amount on interest costs and have more to spend on your next house.
4. Keep closing costs in mind. Every time you move, you have legal fees, taxes, moving costs, and other expenses. Don’t plan to move every few years or you will wasted all of your equity in fees.
A house can be a great investment, and even better, it can be a great place to live. Just be careful that a strong return on investment isn’t your only reason for buying, or you could turn out disappointed.