When clients come to you looking to purchase a new home, they may be confused by the many options before them. Real estate offers great potential, from new construction to turnkey houses to older homes that need renovation. Your clients may have an idea of what they want, but they need to fully understand the options before they can make the best decision. With the advent of popular television shows that make house flipping popular, many clients may be interested in buying a house that needs remodeling. While this can be a great option in some situations, clients need to make sure they are financially and mentally ready to take on a renovation. In some cases, clients may be happier buying a house that is move-in ready.

Be Aware of the Costs

Your clients may be looking at a fixer-upper house with dollar signs in their eyes, imagining all of the money they may make off their investment. While there is money in flipping houses, make sure that your clients are aware that the costs of renovations are expensive as well. Both the costs of labor and materials are currently at highs, so while there is money to be made, your clients can also plan to put a lot of money into their investment. Advise your clients to weigh out the costs of labor and materials with their potential profit.

Your clients also need to understand that financing a home may work differently if they plan to flip it. They may get lower interest rates on a mortgage if they are not planning on selling.

Consider the Necessary Renovations

If your clients are looking at a house they are thinking of flipping, they need to figure out exactly what renovations they will need to make and what those renovations will cost. Cosmetic renovations, such as thorough carpet cleaning or painting the walls are inexpensive, while other renovations, such as replacing plumbing or repairing foundation issues can get quite costly. Your clients will want to hire an inspector and a construction supervisor to walk through the house with them to help them figure out what will need to be done.

Patience is Required

Your clients may think that the renovation process is simple, but it can be a long and arduous process. They need to be aware going in that it may take longer than a few weeks or even a few months. There may also be hidden costs that crop up along the way. Your clients need to be prepared to spend more money than they initially think because it is inevitable that things will go wrong and there will be issues they did not foresee. If your clients are looking for a smooth and stress-free process, they are better off buying a turnkey house.

Aim for a Lower Price

If your clients are considering a fixer-upper, they need to make sure they are getting a great deal. With the cost of renovation, a low selling price is a must if your clients want to maximize profits. Just remind your clients that a great deal is not everything. IF the house is in a neighborhood where sales are low or if the cost of renovations is simply too great, there will be no potential for a profit.

When a Move-In Ready Home is the Better Option

If your clients need a home immediately or if they have a lot of other stressful situations going on in their life, then they are probably not ready for a fixer-upper. Additionally, if your clients are on a fixed budget, then they should buy a turnkey home, as fixer-uppers almost always have extra costs.

When advising your clients on the type of house to buy, you want to make sure they understand and consider all of their options. If your clients are considering a fixer-upper, you want to make sure they are ready for the challenge it requires in addition to the potential profits.