Five useful tips for flipping properties

House flipping is an investor’s game involving buying undervalued properties, renovating them, then re-selling them with the goal of turning a profit.

However, house flipping is not for everyone, it involves a lot of time, research, finances and emotion. However if executed with due diligence and ambition, you could be well rewarded.

Here are five tips to help you with your property flipping journey:

1. Do the research

There are many risks involved with house flipping, and you can be left out of pocket if you are not careful. It is imperative that you do the homework before purchasing and beginning renovation.

Start by researching the current market, buying a property under market value will maximise your profit. The key to a successful flip is in securing the best deal, take your time in looking for the property that you see has potential after some TLC.

The other side of flipping is the renovations. Make sure you research contractors, tradesmen and even learn how to renovate yourself so that you can save money and pay as little as you can on renovating. If you have friends in the trades business, use them and their insight to make sure you aren’t spending more than needed.

2. Work smart not hard

You can spend a lot of time and money renovating a property, only to have buyers not interested in it. This could be for a number of reasons, the design, the structure or the selling price. If you over-improve a property, you will most likely cut into your possible profits and be left out of pocket, but if you under-improve, you may not get a sale – so finding this balance requires a lot of thought.

Overworking yourself for no reason will only cause stress and could jeopardise your house flipping goals.

3. Know your end goal

When thinking about how you are going to flip your property, put yourself in a buyer’s shoes. What are they going to be looking for? Consider what design elements and style you think will achieve a fast sale and stick with it.

Take the time to look into what looks good and what doesn’t, what is working and what’s not and most importantly, what’s selling and what isn’t. Have a set goal with how much you are willing to spend on renovations and stick to this budget to avoid shortfalls.

4. Buy in a good location

With any investment property, location is always a driving factor. Flipping or not flipping, buying in a good location close to all amenities will be popular among buyers.

If you can find a bargain property in a good area that will thrive after a makeover then it should make a successful flip. It is also wise to research the suburb you are buying in, and assess what other properties in the area are selling for, so you can grasp an idea of what your flipped property will be worth.

5. Take your time

Don’t rush, explore your options and don’t second guess. Buying a house is one thing, then investing more money into renovating it is another. Take your time to carefully consider all of the above tips. Property flipping is a challenging hobby, but can be very rewarding and satisfying if done right.

More information

If you are thinking about getting into property flipping, consider using a REIWA buyer’s agent to streamline the process. A buyer’s agent will try and get you the best value for money, while taking the guesswork out of house-hunting.

To begin your property flipping journey, see what's for sale in Perth.