Ignite FB Tracking PixelThe Major Costs of Flipping a House - Wendy Goller
Keller Williams Lowcountry
Keller Williams Lowcountry
Wendy Goller, Keller Williams LowcountryPhone: (843) 321-1103
Email: [email protected]

The Major Costs of Flipping a House

by Wendy Goller 04/02/2024

For many, flipping homes is lucrative. However, there are many costs associated with flipping a property, and it’s important to budget carefully for every detail. Here are the major costs to consider when determining how much funding you’ll need for a flip:

Down Payments

Just like buying a move-in ready house, buying a house you intend to flip will require a down payment. Depending on the terms of your financing and the total price of the home, the down payment will be your largest expense to plan for. Traditional mortgages call for about a 3% minimum for a down payment, but this amount can be much higher with other funding sources.

Financing Costs

Most financing options will include interest. Even though they might be very low percentage rates, they are a regular cost to factor into your budget. While regular mortgages may have low rates right now, the type of loans most commonly given to house flippers can have interest rates as high as 10%.

Homeowners Insurance

Even though you might only own the house for a short time, you’ll have to pay homeowner’s insurance. Most lenders require proof of a homeowner’s insurance policy as a qualification for approval, especially if the house is being used as collateral.

Taxes

Don’t forget about adding relevant taxes to your budget. The main ones to plan for are property and transfer taxes. No matter how long you own the property, you’ll be responsible for these taxes and should set aside adequate funding for the payments.

Renovations

The cost of renovations will probably be your second largest expense to budget for. Unfortunately, this can be the hardest part to estimate. To get the best viable idea of how much money you’ll need to set aside for renovations, consult a contractor, home inspector or both to create an estimate.

About the Author
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Wendy Goller

We take great pride in our specialization within The Lowcountry region. With access to 3 MLS feeds, including those of Charleston, Hilton Head, Bluffton, Beaufort, and all the South Carolina sea islands such as Edisto Island and Daufuskie Island, we have an in-depth understanding of the area. Immerse yourself in the local essence by enjoying a weekend retreat to a delightfully charming and welcoming coastal town. The allure of The Lowcountry is bound to capture your heart, just as it has captivated us.

Alternatively, let us assist you in organizing a visit to Beaufort and The Sea Islands. Discover why Beaufort consistently ranks among the top small towns in the US and why its residents proudly call it the "happiest seaside town in America." If you're contemplating a shift in your lifestyle, don't hesitate to reach out to us. We're here for you, committed to your needs and aspirations.