House flipping is a real estate investment strategy where investors purchase properties, renovate them, and sell them for a profit. This calculator helps you estimate potential returns by analyzing all costs involved in the flipping process, from purchase to sale.
Start by entering the property's purchase price and estimated closing costs. Include all purchasing fees, such as legal fees, transfer taxes, and inspection costs. Typical closing costs range from 2-5% of the purchase price.
Break down your renovation costs into repairs, materials, labor, and permits. Be thorough and include all potential expenses. Remember to account for both major renovations and cosmetic improvements.
Calculate monthly expenses you'll incur while owning the property. This includes mortgage payments, utilities, insurance, and property taxes. Be realistic about the renovation timeline as holding costs can significantly impact your profit.
Enter your expected sale price based on comparable properties in the area. Include agent commission (typically 5-6%) and selling closing costs. Remember that market conditions can change during your renovation period.