It’s no fun when that property you spent months fixing up is not getting any love from buyers. Homeowners are picky, and it’s possible that you didn’t fully consider your target market before renovating the property. Other factors could be at play too, based on price, location, and the local market conditions. Either way, you need to know what is preventing the home from selling so you can address the issue and get it sold.
To help you understand why your investment is sitting cold, here are five common reasons why fix and flips don’t sell.
- It’s Priced Too High
Price is a major factor for investors and buyers. You want to see the biggest return and your buyers want a fair deal. The thing is, buyers aren’t going to compensate you for your time and creativity. They’re only going to pay for the finishes they see.
Do an honest evaluation of your property and see if it’s priced higher than others in the neighborhood. Remember, prospective buyers have access to all types of tools and they know what the comps are going for. Yours isn’t going to be worth 10 or 20 percent more because it’s new.
- It’s in a Bad Location
Location is another consideration. You can take a property and turn it into a masterpiece, but it still won’t make up for a poor location. If your fix and flip is located near any of the following threats, you may have to lower the price.
● Power lines
● City dumps
● Power plants
● Noise pollution
● Hoarders or messy neighbors
● Poor schools
● Busy streets
- You Chose the Wrong Finishes
You must always consider your target buyer when rehabbing a home. Pay attention to the latest trends in your particular location. What types of finishes do homeowners appreciate? Aside from the details, also consider the types of people you are selling to. If you’re rehabbing a home in a family-friendly neighborhood, consider finishing the basement or converting the attic into a play space.
- You Overlooked the Details
You saw the property before you fixed it up, so what you see today is a HUGE improvement! Prospective buyers didn’t see that, though. They see what’s there now, and everything needs to be flawless. Pay attention to the details. Are the shrubs trimmed? Are there fresh flowers planted? Are the windows clean? Has debris been removed? Buyers don’t want to be reminded that the home was once foreclosed and left to die.
- You Cut Corners
Most investors don’t intend to cut corners. Usually, it’s running short on time or low on budget that can change the course of the project. Whatever the case may be, prospective buyers will find the flaws. This is one of the biggest investments of their life, and the last thing anyone wants is to buy a bad rehab. In fact, you can expect buyers to be even more on guard with a rehabbed home. They are particularly cautious with HVAC equipment, moisture, cabinetry, plumbing, paint, and flooring.
Not all fix and flips will be the investment you want them to be. The good news is that there are many tools and resources available to help you better understand what your target buyers want and are willing to pay. Use these tools to your advantage, and live and learn from past mistakes.