KXAN Television:
“Interview on the Morning Show”
Homesteading: The Slow Flip
June 18, 2007
Have you ever thought about flipping a home but don't have the time or the money to invest in a quick turn-around? You may want to try homesteading, which is also referred to as a slow flip.
The idea is to live in the property you plan to resell and take your time, so you don't get hit with the capital gains tax.
"What sold us on the house was the yard and the lot," said homesteader Tausha Carlson.
But the inside of the Austin home needed some work.
"The kitchen was terrible. It was an awkward layout. It had a washer and dryer, stackable, in the kitchen. It didn't have a laundry room or utility room, so that was the downside of the house," said Tausha.
So Tausha and her husband, Chris, gutted it floor to ceiling.
"We had to do plumbing work in the kitchen, so we actually tore out the floor," said Tausha, "so you could actually see the ground on the pier and beam house, redid some plumbing, did some plumbing to move the washer and dryer and actually make a utility room, tile, cabinets, countertops, can lighting, the recess lighting in the kitchen, everything."
And that big project has a big purpose: to sell it after two years. It's kind of like flipping a home, but this is called homesteading.
"It's investing in your home that you're occupying that you're actually going to live in. If you live in it for two years, you avoid paying the capital gains tax," said Tausha.
So you make a bigger profit, something that couple discovered after remodeling a home in Hyde Park.
"We bought it from the original owner, so it was outdated. It had laminate on top of laminate on top of shag carpet, under gorgeous hardwood floors that we refinished, original bathroom. It just needed a lot of cosmetic work, but the structure was good," said Tausha.
That hard work netted them a $40,000 profit.
"That made me see the opportunity in real estate," said Tausha.
The Carlsons used part of their profit to fix up their current home.
"The kitchen and bathrooms are the best ways to make money. If you put your money in it,
that's where you're going to get the most from your return," said Tausha.
And doing most of the work themselves saved some cash. Their estimated profit from that home was $75,000.
"There's money to be made, but it also provides shelter, so it's two-fold," said Tausha.
Tausha, who is also a realtor, is going to be teaching a class on homesteading Wednesday as
part of the UT informal classes. It's from 6:30 to 9 p.m.
If you're not a fixer-up type person, you can always hire a general contractor to do the work, or save some money and learn how to do it yourself.
"We do most of the work ourselves, because it's more economical, and it's kind of a hobby and fun for us, but you don't have to do the work yourself. You can hire it out, you can hire a general contractor," said Tausha.
If you're not interested in doing any type of fixing up but would like to make a large profit on your home, Tausha recommends just moving into a location of town that is going to appreciate in value.
East Austin is obviously really hot right now or sections of the city that are going to be close to the commuter rail line.