When the market is rising and the conversation at backyard bbq’s is all about making money from property, often the question about property flipping arises and everyone wishes they could jump straight in. So when the market turns, the perfect opportunity becomes available to get your property flip on.
Property flipping is when you buy, renovate and sell for a profit. Many savvy people have made a ton of money by starting small to minimise risk and then taking on larger projects as their skills improve. Some have made property flipping a full time career.
The secret to successful property flipping is doing your research and buying a property with great potential at a reasonable price. Cosmetic renovations are often the simplest and make the most impact. Complex structural work or renovations that require Development Approval could lengthen your renovation time and blow out the amount of profit you make. Time is money so a good renovation done quickly can turn out the most profit and hey presto, you’re suddenly onto the next one.
Remember to factor in any stamp duty costs when purchasing, and agents fees when selling. Be realistic about the amount of profit you might make. Professional renovator Cherie Barber says that spending no more than 10% of the property’s value on renovations is her golden rule, but some cosmetic renovations can be done for far less and still produce an amazing result. Remember to negotiate hard on the purchase price of the property, and with your tradies and suppliers. Everyone wants business and if your property flip is the first of many, the tradies and suppliers will no doubt see that you could be a great client to work with on a regular basis, hence offering you really good rates.
Lastly, you can always hang on to your property by renting it out until the market starts to rise again and sell on the upswing. Your tenant may even be in a position to buy your property at that time.
For more information on property flipping, visit these links and good luck!