3 Effective and Efficient Ways to Appraise a Fix and Flip Property
Flipping properties is a wonderful way to increase your income without having to take on an additional job or get involved in high-risk investments. However, the success behind every fix and flip lies in figuring out exactly how much the property is worth and how much money you’ll have to sink into the project. If you’re wondering how to evaluate the value of each property you’re considering, you have three main options. Here’s what you need to know.
1. Handle It on Your Own
The most affordable way to appraise the value of your investment property is to handle the appraisal on your own. Walkthrough the property and evaluate how much work needs to be done and consider how much the home is worth in its current state. You’ll need to borrow enough money to cover the home’s current value as well as the materials you’ll use to fix it up.
Keep in mind that handling the appraisal on your own often takes longer than hiring a professional. Further, you might miss certain aspects of the house that could impact its overall value, costing you money in the long-run. It’s best to only handle the appraisal on your own if you’re familiar with the industry and have observed appraisals in the past.
2. Look at General Trends
If you don’t have the time or desire to go through the property in detail on your own, you don’t need to immediately rush out and hire a professional. Instead, you can look at overall trends with similar homes. Consider the values of properties you’ve fixed up in the past or ones in the area that are currently for sale and compare those properties to the one you’re interested in. This process is incredibly general and won’t give you a complete picture of your property’s true value, but it’s often good enough for property investors looking to act quickly.
3. Call in a Professional
Hiring a professional appraisal specialist is the fastest and easiest way to find out everything you need to know about the property’s value. While it will save you time, it will cost you money upfront. After all, you’re hiring someone with extensive knowledge and experience. However, the appointment won’t take more than an hour or two depending on the size of the house. Even better, you’ll know that the house’s value is fair and reflects the current market conditions for the area.
If you’re looking to fix and flip a property, use one of these three methods to appraise the house before you commit to the purchase.