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Expert Update - 09.11.2020

Before You Attempt to Flip a House, Avoid These 5 Costly Mistakes

House flipping has been a hot trend in real estate for years, bolstered in part by glossy TV shows featuring charismatic personalities who earn big profits in just one 30-minute episode. However, flipping houses is a serious business: It requires knowledge, planning, and savvy to be successful. Common mistakes novice real estate investors make are underestimating the time needed to renovate a house, under budgeting the money required, overestimating their handyman skills, not knowing enough about the market to be profitable, or buying the first house they see without making an informed assessment.1

Turn Your Home’s Equity into a Loan

If you’re looking for a loan to help finance a large purchase, such as a home renovation or college tuition, the equity in your home can help you secure the money you need. With a home equity loan, the lender advances you the total loan amount upfront, and you repay the loan with equal monthly payments over a fixed term, just like your original mortgage. A second option is a home equity credit line (HELOC), which provides a source of funds that you can draw on as needed—much like a credit card. Since a HELOC is a line of credit, you make payments only on the amount you actually borrow, not the full amount available.2

Navigating the Real Estate Market During Coronavirus

With Americans spending more time at home, many families are eager to buy a house to make their own, moving to the suburbs where they can enjoy more space and work remotely. This demand is driving up prices and making consumers feel they must purchase now or be priced out later. Based on learnings from the early 2000s housing bubble, economists advise not investing in too expensive of a house or taking on too much risk during these uncertain times. Work with your mortgage loan officer to make the best choice for your budget, knowing there may be short-term shifts in the market.3

Five Home Improvements that Add Value to Your House

If you’re planning to sell your home and want to invest in some upgrades to get top dollar, it’s important to focus on the projects that typically add value and are attractive to buyers. To get a return on your investment, MoneyCrashers.com recommends remodeling your kitchen, adding a bathroom, finishing a basement or converting an attic space into a bedroom, installing energy-efficient windows and insulation, and enhancing the outdoor living space with a deck or patio.4

High-End Home Goods for Rent

West Elm has joined the sharing economy and now offers its stylish home goods at a price you will love. The home décor company has partnered with Rent the Runway to offer its subscribers rentals of 26 exclusive home bundles for the bedroom and living room, including decorative pillows, quilts, coverlets, shams and more. Now it’s easier than ever to switch up your style seasonally and affordably.5

 

Sources: 1Investopedia; 2Federal Trade Commission, "Home Equity Loans and Credit Lines"; 3New York Times; 4MoneyCrashers.com; 5ELLE Decor

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