How to flip houses and manage your finances like a pro.
Thanks to reality TV shows like ‘Aussie Property Flippers’ the idea of renovating for a profit is definitely a thing. But how do you ensure your flip doesn’t turn into a financial flop?
Although you set out to make a profit, unless you have a few pretty pennies up your sleeve, flipping houses is still going to cost you. So, let’s break it down a bit.
First things first, you will need money to purchase the property. Even if you have a healthy deposit, you will still most likely need to take out a loan and have the money to pay it back. Ensuring you have a steady cash flow throughout the flip is key. Don’t forget, renovations almost always take longer than expected so make sure you plan some buffer money in there. If you own your own home, you might be able to access the equity to help fund your new project.
Then comes the fun bit - renovating. We can’t stress enough the importance of a budget and plan while doing the dirty work and - here’s the part that really matters - sticking to it. This is also where that steady cash flow comes in handy. Having a well planned out spreadsheet or project plan will save you financially, trust us! Adding everything from the nails to paint, tradies and tiles will help you stay on track. There’s nothing worse than being caught out owing a large unexpected bill.
Getting your newly reno’d house on the market and sold as soon as possible is key to success. You’re paying interest on your mortgage everyday it sits in your name. Once you’re ready to sell, find yourself a good agent who will work quickly to get your property on the market and in front of buyers. But remember there are fees involved here too like the standard real estate fees, so don’t forget to add this to your budget.
Ready to get started? Check out our top tips for renovating for your target market.