Last week we looked at granny flats. This week we’re focused on flipping – the art of buying cheap, renovating cleverly and selling for top dollar.
The first thing you need to know if you’re thinking of flipping your way to property riches is that you’ll have a lot of competition.
“More affordable renovators are hard to find in the sub $500,000 market,” explained Watt Realty CEO Justin Watt.
“You have competition from first home buyers in that market so you lose your ability to negotiate. It’s important to remember your profit margin is set with the purchase price.”
So what should you do?
Go to the $500,000 to $600,000 bracket where there’s not as much competition for renovators and buy the “biggest, ugliest house you can”.
“Extensions can cost $1,000 to $1,200 per square metre but if you buy a house with a closed in veranda, for example, you can essentially expand your living space while only paying for cosmetic renovations,” Justin said.
For those who really dare – jump to the million dollar bracket. “I’ve seen one project in New Farm where they bought it for $900,000, spent about that much again on renovations and sold it for $2.32 million,” said Justin.
“When you dial up the risk and outlays, the reward is bigger. You might need to bring in partners to fund this type of development.”
Want some local advice on your property strategy? Contact us for a chat.