Shopping for the right home is always fun and exciting, and a lot of people want a move in ready property with little to no repairs. There are several benefits to buying a flipped home, but there are also just as many negatives.
History with Flipped Homes
As a professional Home Inspector, I have run into several homes that were renovated by investors/owners. Some good some bad, but it always depended on how the home was renovated and the budget the investor had to work with. When investors buy homes, they are looking for the best profit margins for their investment, and that sometimes means cutting items off the list to prevent the project from going over budget.
Behind the Cosmetic Features
I know everyone has heard the term “If its broke, don’t fix it”, That is consistent across flipped homes. This means if you have outdated systems in the home or older materials that are still “working”, they probably won’t be touched. This puts the financial burden on the buyer when they purchase the house and these expensive items will need to be replaced in the near future.
A flipped home usually looks great to the untrained eye. It’s easy to be wowed by new granite, paint, and flooring, but what lies beneath these cosmetic features? A lot of times I find a gorgeous interior, only to go into the attic space and notice a mess of old ineffective insulation, outdated HVAC systems/ducts and a 20-year-old water heater that’s way past its manufacturer life expectancy. These are the items that most people don’t think about as long as they are working properly, but they do not account for extra cost of repairs or replacements shortly after closing.
The Convenience Cost
When you buy a flip property, you are going to pay more for upgrades that otherwise would have been cheaper if you would have done them yourself. This is a convenience fee on top of what you can expect to pay on top of the base value of the home. This is the primary reason there is a large market for flipped homes, good profit margins for investors and buyers who want a “move in ready” home.
CHECK FOR PROPER PERMITS AND TIMELINE
When buying a home that has been flipped, you should always get a time line of events and proof of repairs and permits. This will give you further insight into the property and allow you to have a better idea of what went into the home. No matter how good the home looks, a careful and proper remodel takes time. Looking at the date and price of the last sale, can give you an idea of how fast the house was remodeled and you can also use this information to check for proper permits and to make sure the home passed all necessary inspections by the city or county.
There are several Pros and Cons to purchasing a “Flipped home”, but at the end of the day its up to the buyer to do their research and go with what they feel comfortable with.