6 Jun 2011
A lot of buyers in western Sydney look for investment properties that they can “flip”, or in other words a home that can be bought at a lower price and then quickly sold for a higher price.
Flipping property is usually done by making improvements to a home and it can be a great way to make money, but it’s definitely not for everyone. Flipping property is generally more of a short term gig than most property investments, but it can require a lot more time, energy and planning.
So before you try your hand at flipping property, here are some things to think about:
As a rule for renovating in general, you should budget for at least 20% more than what you expect to outlay during improvements. The extra funds may be needed to cover things such as delays, unexpected costs, changes or price increases.
Do you plan on doing any of the improvements yourself? If so, then this is a great way to save yourself some money.
Flipping property can take up a lot of time, so ask yourself if you have time for project management, choosing finishes and furnishings etc. If not, then do you have the money to pay someone else to do this for you?
Think about how much you hope to sell your property for or how much you’ll need in order to be able to make a profit, and then ask yourself if that price is viable in the current real estate market.
Make sure to take into account all possible costs involved in flipping property. Factor in things such as agent fees, marketing expenses, council approvals etc.
Do you have a time frame for flipping the property and is it realistic?
Again think about all of the costs involved! If you overcapitalise you may have to hold onto your property for longer than you had hoped or risk making a loss.
For investors who are flipping property for the first time, it can be a very overwhelming experience. So before buying a property it’s a good idea to do as much research as you possibly can so that you’re prepared for any hurdles that may come your way.
If you have any more property flipping tips to share then please leave a comment below.