A lot of people participate in the property market every year, whether to buy their own homes or to purchase investment properties. And the market is competitive. Property investors need to keep up and stay ahead of the competition.
When it comes to investment properties, some people make money by flipping properties, or through a renovate and flip strategy. In simple terms, you buy a property, renovate it, then sell it for a profit. There are even internet TV shows that feature flipping properties – and you may think that this strategy is easy enough.
In this article, let’s delve into flipping properties to find out if it’s an easy thing to do.
Make sure to do your research
One of the easiest ways to fail at flipping properties is to not know what you’re getting yourself into. Look at renovated properties that are similar to what you intend to purchase. Then assess the different aspects that can affect the price.
Buy below market value
Another common trick is to purchase properties that are below market value. Some sellers are willing to take less just to have a quick sale. If you pay too much for the property and add the renovation costs, the result may be too expensive for the market and it will be difficult for you to sell it.
Know the kind of improvements needed
The key to flipping properties is to know what improvements are needed to generate more revenue. Instead of working on structural projects, consider doing renovations or changes that will add to the aesthetic value of your property. For instance, a good paint job can dramatically transform it, giving it a fresh, new look. In this case, flipping a property is easy enough that you can do it yourself. Even if you hire a painter, you can still make the property more visually appealing, and save money in the process.
Once you’re done with the renovation, the property will be up for sale. But what if you cannot sell it fast enough? This is a risk that you should be aware of, so you’ll know what to do and avoid losses.
Do you have other ideas on flipping properties and real estate in Australia? Share your insights in the comments section.