Insurance - Whether or not you get a loan, youвЂ™ll want insurance to protect your investment.

Utilities - Utility service has to be established in order to do work at the property and show it once itвЂ™s up for sale.

You may also have to pay closing costs when you sell the home.

Closing Costs - If youвЂ™re getting a loan, the closing costs will be around 5% of the purchase price.

YouвЂ™ll have to factor in monthly loan payments with an interest that could be as high as 12%.

Loan Payments - Getting a loan to purchase the house? That means youвЂ™re like 39% of flippers today according to Attom Data Solutions latest house flipping report.

Marketing Costs - If you decide to sell the house yourself youвЂ™ll have to cover the marketing costs.

Agent Commissions - If you sell the house through a licensed agent (which is highly recommended) a commission of up to 6% of the purchase price will need to be factored into the budget.

Here are some other common costs youвЂ™ll need to account for in your budget when youвЂ™re running the numbers. But even then, surprises almost always happen once things get underway. ItвЂ™s always best to have a general contractor come out and write up an estimate before you purchase the property to get a rough idea for budgeting. Current condition, material quality, and the contractor you use can all affect the price. Renovations are tricky because they arenвЂ™t straightforward expenses. ItвЂ™s the biggest wild card in the flipping game. This expense is actually many expenses rolled into one and takes a lot of effort to budget. There is also a third expense that almost always comes into play. The federal tax is a given no matter where you buy. Some states also take a cut through capital gains taxes. Federal short-term capital gains are taxed at the same rate as income. YouвЂ™ll have to pay for property taxes during ownership as well as short-term capital gains taxes on the profits. For example, if comparable renovated homes in the area sell for $200,000 and the renovations will cost $40,000 then a good purchase price is $100,000 ($140,000 ARV -$40,000 repairs). Next, subtract the estimated cost of the renovations from that number.

One formula for coming up with a purchase price for a fixer to flip is to reduce the estimated after repair value (ARV) by 30%. This is typically the largest cost of a flip and can set the tone in terms of how much profit you earn. Whatever the house costs up front is the initial starting cost, also known as the acquisition cost. No matter what type of home you buy or the financing thatвЂ™s used, there are always going to be two expenses. ItвЂ™s certainly a case of youвЂ™ve got to spend money to make money. Unfortunately, the spending part comes first. Budget for the Common Costs Associated With Flipping a HouseДЄny experienced flipper will tell you thereвЂ™s a lot of money to be gained and spent flipping homes. YouвЂ™ll never know exactly how much money is needed until the process is complete, but estimating as accurately as possible is critical. And no two flips are exactly alike, which means the cost changes from project to project. Everything from location, to condition, to your credit score can impact how much money is needed to flip a house. There are so many variables your budgeting spreadsheet could get convoluted real quick.ДЇlipping a house could require several hundred thousand dollars or almost no upfront money of your own at all.

How much money do you need to flip a house? Boy, is that a loaded question.

House flipper salary