Clients ask us all of the time, “How can we make money flipping houses in Houston?” Of course, there is no easy answer. Your plan is to first, sit down and determine if you have enough money in the bank to effectively buy, reconstruct and sell a house in Houston. Right now, the real estate market is perfect for flipping houses. There are many areas around town, including Houston’s thriving East End, offering a variety of fixer uppers for a modest price.
So, what do you have to do to a property to move the needle?
We’re glad you asked.
How to get started flipping houses in Houston
While having a real estate license gives house flippers a leg up, you can flip houses without one. Find a real estate agent that has a minimum of ten years’ experience and understands renovations. A realtor who understands the costs of labor, paint, carpentry, flooring, and other costly updates can help you prepare a reasonable budget. Most likely, they have connections to the right people, too. The goal is to stay on budget and gain profit.
In 2019, Texas home values averaged $197,500 with a 4.2% price increase anticipated for 2020. Other costs are tacked on such as purchase (title, appraisal, inspection, etc.) and holding costs (property taxes, loan interest, insurance, HOA dues, etc.). Currently, home prices in Houston are not rising due to plunging oil prices and the terrible pandemic.
Foreclosures are great finds for house flippers because they usually sell below market value. As of summer 2020, the average value of properties up for foreclosure in Harris County is $275,125.
Keep in mind that a cheap house may not always be the best house. The more you have to fix, the less of a profit margin. A Houston home that is in poor condition means more repair costs, so make sure your budget is prepared.
Costly repairs to consider:
- Check the air conditioner. Will you need to repair a broken air conditioning system? Does the house need an entire new AC/H unit to add more value?
- Inspect the roof. In cities like Houston, a solid roof is important, especially during hurricane season.
- Check the foundation. If it needs repair, that can be costly.
- Check exterior walls. Chipped paint or siding can lead to algae, mildew, or insect infestations. Take a walk around your house and look for any problem areas that you may need to repair during the flip.
- Watch the windows. As the weather gets warmer, you may want to invest in sun-blocking window treatments to keep a house cooler and save on energy expenses. This can add value to a home.
The best ways to add value to a fixer upper home in Houston:
- Add curb appeal – can a coat of paint turn a dated home into a trendy house? A fixer upper in Houston can increase in value if the exterior is attractive. Plant some flowers because first impressions last.
- Update your kitchen and bathrooms – if you watch the home renovation reality shows, then you know how much an updated kitchen and bathrooms can help with the “wow” factor. A fixer upper most likely needs a new facelift on the kitchen and bathrooms.
- Replace major components – we’ve touched on this earlier but can’t stress it enough. Improvements can help make things easier to clean and maintain on a day-to-day basis, which may also increase the home’s value.
- Go for green – update lighting, insulation, heating, cooling, water tanks, weather stripping, and windows to help make your fixer upper in Houston more energy efficient.
- Make it bigger – It’s better, right? Well, increasing your square footage can definitely help add value to a home in Texas.
- Smarten up the home – A smart home can add value to your fixer upper in Houston. Technology doesn’t have to cost a lot; sometimes you can add tech for under $1,000.
- Add a wet bar – if you want an economic way to add value, then consider a adding a wet bar to the home. Family rooms are a great place to grab a drink.
Dedicated to Southern Living
Bryan Cotton and his Houston team have experience helping clients buy, flip and sell homes. With over thirty years in the real estate industry, there isn’t much the team at Texas American Realty hasn’t seen and solved. We’ve earned our reputation for standout customer service by treating our clients like family. We’ll help you find your dream home in Houston, flip an investment home or put your current home on the market. Contact us today to get started.