The term ‘flipping’ relates to the action of buying a property, renovating and reselling it, all in a short
period. For some this is a valid and effective way of making money. But is it as easy as it sounds?
An article in the Sydney Morning Herald in December 2016 cited the case of a couple who purchased a property, declared uninhabitable by the local council, from a deceased estate for the sum of $771,000 and resold it two years later for $1.615 million. Huge numbers and enough to get quite a few people thinking how they could follow a similar path.
However, coming back down to earth for a moment, we should consider exactly what is involved in the process: the physical work, the mental effort, the time it takes, financing, possibly maintaining a family at the same time and so on.
Let’s look at some of the factors:
Financing the investment
Finding a suitable property
Once you’ve chosen a property
Getting to grips with the renovation costs
Obviously, the questions and observations above are fairly generic but they do require some thought. Some of them may not apply to you: perhaps you are a builder by profession, maybe you have no family to consider and can spend a substantial amount of your time working on the property without it affecting others, or you may have a partner who is eager to be involved as well.
Renovations, upgrades and home improvements come at many levels, from a simple paint job and new interior/exterior fittings, to new bathrooms & kitchens and right through to knocking out walls and rebuilding sections and extensions.
If you decide to go down this route choose something that fits with your strategy, something achievable both in the way of workload and finances: A project that you can jump into, work on, finish in a timely manner and realise the rewards. It’s not an idea to take lightly and you should be prepared for unexpected hurdles, time-delays and cost over-runs.