Every house flipper knows that the key to success is to keep costs down while getting the best price possible. It’s easier said than done, however. It takes some planning and knowing where the deals are to be able to really get your expenses down to the bare minimum.
Flipping houses during the pandemic was a real challenge but people made a lot of money as house prices soared. It was easy during that market to get the max for the house you were flipping. But, with the right kind of moves, it could have been even more.
In this article, we will go over what the ways are to save money when house flipping so you can keep more money in your pocket.
1 – Tax Benefits
One of the best ways to save a lot of money on your flip is to defer your taxes. There are ways to not pay taxes at the time of the sale of your investment property. The tax code is called a 1031 and it allows you to not pay taxes on the income from the sale if you then use the funds to buy a “like-kind” of property.
When you are flipping houses this gives you a tremendous advantage in your cash flow situation. You don’t have to worry about your profits being tied up in taxes when it can instead be used to purchase another property.
Of course, there are 1031 exchange rules, timelines, and more that you have to be aware of for all of this to work so check out that guide to understand how they work.
2 – Match your Budget to your Skillset
When flipping houses, one of the biggest money savers is to do a lot of the work yourself. But, you shouldn’t do all of the work yourself. Your time is money, too, don’t forget.
If the market is hot then you want to get the house up for sale as quickly as possible. Certain jobs are going to be best done by professionals so this can happen. Make a list of the type of work that you do best. Figure out how much it will cost you to then outsource the rest of the work to people that can get the job done quickly and well. Try to do the most expensive jobs that you are able to do to actually save some money so you can then spend less when hiring the pros.
3 – Use Reclaimed Material
Using reclaimed material is not only a great way to save money, but it also makes a great selling point. People love to make sure their purchases are not going to do damage to the environment. If you are able to save materials from getting into the landfill then this will make a potential buyer more interested in your property.
And in the process, you will save a lot of money on your costs. Some of the material can even come from the demolition you’ve done on other houses you’ve fixed so don’t throw away any material that can be reused.