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3 Keys to Finding a Good Fix and Flip Investment Property

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With the struggling real estate market, not to mention the stagnating global economy as a whole, flipping rental properties is much more difficult than it was just 5 years ago.  That said, flipping property can still be an effective strategy, but you must make sure you target only the most appropriate and/or attractive properties on which to execute this strategy.  Otherwise, you will have trouble selling when the time comes.

One thing you want to be on the lookout for is economic obsolescence.  In other words, you must ensure that the layout and overall structure is not odd or outdated.  For example, these days a four bedroom house is expected to have at least 2 bathrooms; if a 4-bedroom home only has one, then it can be considered outdated and as such you’ll have more difficulty finding a buyer unless you buck up and add a second bathroom while you are rehabbing the property.  Other examples of economic obsolescence include a tiny kitchen, a bedroom located in a place that requires one to walk through the bathroom to get there, or the presence of extensive code violations.  The bottom line: if the property is odd or sticks out like a sore thumb relative to the other properties on the street, then it will probably be more difficult to sell.

Another consideration is the location.  For example, if the property is located in a crime-riddled area, it’ll be tough to sell.  Other examples include houses that are located on busy four lane highways, or homes that are literally surrounded by commercial property.  The best locations are those that are in middle class, quiet areas that seem to be on the upswing and that feature lots of amenities.

Finally, the scope of the property needs to be considered.  Ideally you’ll want to target starter homes as opposed to, say, 5 or 6 bedroom upscale homes.  The reason is that you’ll have far more potential buyers on a starter home compared to something more upscale.  And when it comes to potential buyers, the more the merrier!

To sum it up, the best fix and flip properties are those that will attract the greatest number of potential buyers when you are ready to sell.  By focusing on starter homes in good areas that are not economically obsolete, you can dramatically increase your odds of success.  Good luck!

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