The idea of flipping houses has become a phenomenon in this country. It’s quite astonishing how many would be handymen and women have secret dreams of getting their hands dirty playing with power tools and turning the most rundown house in any given neighborhood and turning it into the diamond they feel it could be. Unfortunately many of these would be ‘flippers’ have no real clue of the task they are considering.

First of all, it is quite possible to make a very good amount of money by rehabbing properties with the intention of selling quickly. The problem with this is that most people who attempt this make one of two fatal mistakes (fatal for the maximum profit potential that they are tossing out the window).

The first fatal mistake they make is that they become emotionally invested in the home they are rehabbing and rather than doing a few simple cosmetic changes and turning the property quickly, the end up doing major renovations, investing a lot of time and money (when flipping properties, time is money, the longer you are working on the home, the more mortgage payments you have to make, the less money you walk away from the close with).

You have to remember that the property you are flipping is an investment and you want to get in, do the work, and sell the house. You don’t have to turn it into a luxury home or even a home that you would want to live in. In fact, you wouldn’t want to do that in certain neighborhoods because you would never recover your investment.

The second thing you must remember when flipping properties is don’t get greedy. Just because you think you could make more money if you added the granite countertops doesn’t mean you can. I’m not suggesting you take shortcuts or do anything that is structurally unsound, but I think you will be amazed at how much less it would cost to resurface an existing bathtub than to replace it.

Want to change the look of a room dramatically without investing a great deal of money? Grab a paintbrush. Changing the color of a room can have a dramatic effect on the overall look of a room. Rather than buying new cabinets for the kitchen and bath, try cleaning the original cabinets and adding new cabinet facings–these are little things that can make a profound difference in the market price of a house. For curb appeal hang ferns on the front porch (if it has one or invest in a little landscaping—just don’t go overboard). Don’t decide that you need 30,000 for a month’s work rather than the 12,000 you were originally hoping for and spend 25,000 to make the 30,000. It becomes a catch 22 when greed kicks in. So don’t get greedy.

Flipping houses is by far one of the quickest ways to amass a serious profit in real estate investing, especially if you can do the work yourself. Just remember to set a budget from the beginning and stick to it. Make a list and don’t deviate for cosmetic reasons (serious problems do occasionally occur and they must be dealt with safely). Don’t get greedy and have fun with it. It’s a learning process and the first experience can be frightening and exhilarating at the same time.

Investing in real estate is like any other venture you enter into it. It takes blood, sweat, and tears to make it work for you. While it takes a lot of work, it can be a very successful venture. There are many options for investment properties. Whether you are considering property rentals or buying property and fixing it up for resale there is a significant investment not only of money but time as well. No investment venture is going to be successful unless there is a great amount of love and labor involved.

Here are a few tips for investing in rental properties:

1)    Make sure that the area you are buying your rental property in has a very high demand for the type of property you are offering. You don’t want to invest in a family home as a rental property if your market is mostly college students. You could consider subdividing a larger home for this type of market and having two or three smaller rentals rather than one larger rental.

2)    Check the property value in the area you are investing in. You don’t want to choose an area that is in decline for rental properties if you can avoid it. The declining state of the neighborhood will minimize your potential profits.

3)    Be absolutely sure that the income generated by the unit will cover not only the mortgage you are taking on but also the empty times, repair, and upkeep. If you’re investing in a property you want to make sure that you are actually making money.

If you aren’t considering turning your investment into rental properties but are more interested in fixing it up and selling it at a higher rate there are some guidelines you should follow as well.

1)    You must make your best effort to be accurate in your estimate of the work that needs to be done so that you can recoup your expenses and earn a little profit when you turn the house.

2)    You need to educate yourself about the area the home is in. Learn the value of similar houses, or houses in a good state of repair in the neighborhood to see how much your potential profit may be. Remember that it isn’t necessarily a good thing to have the best house in the neighborhood. Potential buyers will assume that the value can’t go up much from that point.

3)    Make sure you have a detailed inspection and are aware of every potential repair that needs to be made, which ones are immediate needs, which ones are cosmetic needs, and which ones can wait. Don’t waste money on the ones that can wait unless they will significantly improve the value of the home. Kitchens and bathrooms are the only ones I would consider for cosmetic needs and structural needs must be addressed before cosmetic needs. Trust me, it isn’t fun hanging drywall twice because the first job was ruined by the new leak in the roof.

Overall, keep in mind that this is about making the most money possible for your investment. Keep the improvements as simple and cost effective as possible and you should be able to enjoy a nice profit. Also keep in mind that it takes money to advertise your home regardless of if it is a rental or you are trying to sell so keep a budget set aside for that. Remember that you will still have to make the mortgage payment even if it sits empty for a while so set your prices competitively for the area. Good luck with your investment and try to have some fun with it.