The most important step when it comes to flipping a house is budgeting. You also have to choose the right location and figure out what renovations you're capable of doing and in how much time. First, decide whether you're going to flip a new-construction home or an older fixer-upper. Your budget for a new home is the same as if you were buying it for yourself: mortgage, insurance, taxes, realtor, and lawyer. When it's a fixer-upper, you have to add the renovation costs into your budget, plus a little extra to be sure. After you decide whether you want to flip a new home or an older one, you have to look for the right neighborhood. Do plenty of research to find out what other people are asking for houses there, and find out whether other people have tried to flip houses in the area and how long it took them to turn the houses around.
When you're dealing with a fixer-upper, you have to figure out what kinds of improvements are needed. The least fun but most important ones are structural, like plumbing, electrical, insulation, pest control, and heating and cooling. If you know how to do the necessary work yourself you'll save some money; if not, figure the cost of labor onto the cost of the renovation materials. Besides the structural improvements, real estate agents point to the kitchen and bathrooms as your most important focal points in order to bring in a higher return. That can mean new cabinets, counters, sinks, backsplashes, appliances, floors and lighting. Green improvements are also considered a draw, especially when you market them as money-savers.
While you focus on the inside of the home, don't forget curb appeal. The outside of the house is the first thing potential buyers see. Consider whether the house needs a new coat of paint, whether the driveway has to be repaved and how the landscape looks.