Should You Flip a Home if You're in the Military?

Television is full of stories about people buying homes, fixing them up, and selling them at a profit. As a member of the military or as a military spouse, individuals may wonder if this is a good way to supplement their income. While house flipping can be profitable, the following information should be kept in mind before starting the process.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

Choose a Place with Minor Repairs and in a Good Location

It can be tempting to look at a fixer-upper at a bargain price. However, unless the house flipper has the skills and funds to profitably correct problems, a house with major issues can quickly turn into a money pit.

Minor cosmetic repairs that can be accomplished quickly can add a lot of value to the home. Experts estimate that every dollar spent on paint, for instance, increases the selling price by $5. Simple landscaping improvements, new carpets, new light fixtures, or new window coverings are other low-cost improvements that can make a home's selling price rise.

It's also important to make sure the house is in a desirable location. Picking one in a place where people want to live is a key first step.

Buy Below Market Rate

Buying a home to flip with an assumption that home prices will go up can often end in disappointment. Instead, look for homes that are being sold below market rate. Sometimes, it is possible to find homes with minor cosmetic damage that have been on the market for a while. The ability to see the home's potential can be profitable.

Have a Plan for Sudden Relocation

Often, active duty military members have to move quickly with very little notice. It's likely that they will not know how soon they are coming back.

House flippers should make sure that they, and if applicable, their spouse, have a plan for what to do if they get orders to leave. A potential house to flip can't make any money if it's not ready to sell. Sales can sometimes be more complicated from far away, so having a plan in place can make the overall process easier.

Be Aware of the Limitations of the VA Loan

Part of why the VA loan's terms are so generous is that they are intended for owner-occupied residences. When buying a home with a VA loan, the buyer must take residence within 60 days. Additionally, they are required to live at the residence for at least one year.

While this may present a challenge for some house flippers, it can work out well for those who are willing and able to live in the house for the required amount of time. Buyers who are looking for somewhere to live with an eye toward turning a profit at the time of sale can do quite well.

Buying homes to flip is just like any other investment. It is important to research well and have a step-by-step plan for how to manage the purchase, renovation, and sale. Those who plan well are the ones most likely to have a successful house-flipping project. By understanding the market and which repairs are quick, easy, and affordable, a military home flipper can find a great place and make a bit of extra money at the same time.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.