Are you doing your due diligence before flipping property? Make sure you read this blog post to know what are the expenses associated with house flipping in Savannah…
House flipping can be a lucrative investment strategy. Keeping your costs low is the only way to maximize your returns! Here are seven of the most significant expenses you will encounter when flipping a house in Savannah.
Unexpected Expenditures
Since the beginning of time, every flip has had an unexpected surprise that threatens the timeline and budget. Maybe just delays due to inclement weather, or other unseen issues such as mold or termites causing damage costing time in repair. Every surprise adds expenses to your project so plan for delays so they don’t derail you.
Acquisition Expenses
These are the costs associated with acquiring a property. They include the purchase price of the property, marketing costs, the costs to meet with the seller, clean-up costs, legal fees, and closing costs you cover as a service to the seller.
The Sales Costs
You will also incur costs to sell the property, including marketing and furniture rental (for staging). Don’t be surprised by these and other unexpected expenses.
Demolition And Renovation
Demolition is more than picking up a sledgehammer and smacking at drywall. You can cost yourself huge expenses if you don’t know how to demo properly. There are costs associated with demolition and renovation. Flooring and windows, cabinets and countertops, fixtures and appliances, carpeting, etc. These costs are going to be a pretty major portion of your budget in most situations.
Team Expenses
Even if you have collected supplies and raw materials, you have to hire someone who knows how to do the work! Even if you do a lot of the work yourself, you might need to hire a licensed tech or contractor to help you.
Carrying Costs
The “newbie” flipper often overlooks this expense, but you’ll find out quickly how important it is: Carrying costs are the utilities (power, gas, water, etc.) you must pay during the period that you own the property. Expenses will accumulate, especially if your timeline is stretched out. If you can flip the property quickly, you will incur fewer carrying costs.
Extras (Permits, Licensing and Dumpster Rentals)
Your budget should account for plenty of extras you may not have considered before you started. Things like tool rentals, dumpster rental or even bringing in lunch for the team! Don’t forget to make sure you have all the right permits or you’ll end up with another expense — A Fine!
Summary
When it comes to weighing the costs of your potential flip before you start, it is wise to ask, “What are the expenses of flipping a home in Savannah?” Make sure you account for these expenses in your budget. Expenses aren’t necessarily bad — after you all, you have to spend money to make money!