For those unfamiliar with the term, ‘flipping property’essentially refers to buying, renovating and selling a property with the intention of making a relatively fast capital gain, and it is fast becoming a popular property investment strategy. With so many ‘celebrity renovators’ and numerous renovation TV shows like The Block gracing our screens, it’s not hard to see why people have become so attracted to renovating for (hopefully) a profit.
However, this strategy is definitely not without its pitfalls. If you’re a licensed tradie and you’ve got a whole lot of time and mates you can rely on to help you get the job done, then maybe – and only maybe – it’s a viable option.
For the rest of us, one mistake or unexpected event could blow out the entire projected profit of the project (because you’ve done an accurate feasibility study on the project, right?). Add this to the fact that every day the property sits on the market waiting to be sold costs you more and more and eats away at your bottom line, you’ve got, in our opinion, a pretty risky property investment proposition.
Apart from this, there is so much more to flipping property than just renovating and selling – it’s making sure you are absolutely diligent in your pre-purchase property research and analysis and it involves being a total bean counter to make sure you maximise your return on investment. And, just like any other reno, it’s time consuming, likely to be more expensive than you think, and stressful.
If you aren’t an experienced renovator, there are property investment strategies available to you that offer far less risk and take much less of your time (and dare I say, blood, sweat and tears!), and we always recommend canvassing all options before you commit to something that may not be suitable for you.
If you would like to know more about property investment and our thoughts on flipping, or would like a copy of our free report on Property Investment Strategies, please don’t hesitate to get in touch.