There are many homes on the market that have been bought by investors at a low price, renovated in a short period of time, and listed for sale at a much higher price. These homes typically show very well and appeal to buyers looking for a move in ready property, but can these looks be deceiving? It can be difficult to determine whether or not the home was renovated with high quality that will endure or if it was simply a job of putting lipstick on a pig.
When you purchase are home that was flipped by an investor you are paying a premium price. You are paying for the original sales price, any updates and renovations they made, and for their time and labor. Essentially you will be paying a higher price to have someone do the work for you.
Additionally, when you buy a flipped house you do not get to decide what you want the upgraded house to look like. The house is listed back on the market after all of the updates are made. Perhaps you would have chosen darker cabinets, or black appliances instead of stainless steel. Perhaps you don’t like the tilling that was installed in the master bathroom. These are all decisions that are made by the investor, not yourself when you purchase a flipped property.
Another concern about buying a flipped house is that you cannot be completely sure of what issues were discovered while the home was being renovated. Furthermore, if the investor is looking to make top dollar on the home, it is highly likely that they bought new fixtures and appliances for the house at the cheapest cost they could get to increase their profit margin. Therefore, a house that may look great can be a headache in the very near future.
While it may be alluring to buy a home that looks move in ready, remember that there is home maintenance with any property you buy. You have no guarantee about the quality of the renovations and you pay a higher price to have someone else fix up the home. Take all of these matters into consideration before buying a flipped home, and be sure to have a very thorough inspection completed before your settlement date.