How easy is it to flip a property?
‘Flipping’ or buying properties to do up and sell can be a lot of work but the pay-off could be huge when the time comes to selling your fixer-upper. With risk comes rewards and flipping properties may just be the best financial decision for you, but weigh up the odds first.
Risk versus profit
Most people recognise the risks that come with flipping properties. You invest your time and hard earned money into renovating a home but it may not always pay off when it comes time to sell. Before you do anything, you must plan your budget for fixing up the fixer-upper and budget down to the smallest of things. Investing Answers suggests that you pay for the house in cash and avoid getting a mortgage for it. Even splitting the investment with a partner will be better. Having a mortgage is a "fixed obligation" and it adds extra pressure for you to be successful with flipping.
What do buyers look for?
The Real Estate Buyers Agents Association recently released a survey of the most popular features that Australians want for their new home. These are the top 10 features:
- Open plan living
- At least two bathrooms
- Natural light
- Close to schools and shops
- Kitchens that flow out to outdoor entertainment
- Two living areas
- Level yard
- Storage space
- Secure car space
Now that you know the most popular features, you can start to plan your renovations with them in mind. Aussies love to renovate their homes but perhaps more importantly, they like to do it themselves. This means that there will be a lot of costs saved on hiring people to build or demolish.
Best house on the worst street or worst house on the best street?
Location can make or break your gains when flipping a property; just remember - it's all about the serenity. Buying a run-down house and fixing it up can be great, but not if it is on a terrible street. You have to ask yourself if the features of the neighbourhood are going to add value to your home. Research the past rates of property growth in surrounding streets, as well as nearby schools and amenities.
If you are now entering the world of flipping property, know that it is a tough game to play. But if you win, the rewards can set you up for a successful financial future. Talk to the team at First National Real Estate to find out the best places to buy for your next investment.
Have you ever flipped a property? Share your experiences in the comments section below.