Targeting Areas When Wanting To Renovate And Flip
There are many things to consider while making a property investment in Australia to flip. Most inexperienced renovators will concentrate on the alterations that can be made to a house and how the house can be improved so that they can make a profit from the renovation and ultimate sale of the property.
One other very important aspect is its immediate vicinity.
If you are purchasing to rent the important factor is that you get a good buying price and that the rental demand in that area is good.
But if you are purchasing to renovate and flip the property, then it is important that the surrounding properties are going to help bring the price up.
If you purchased a property at approx. $325,000, at the lower end of the market and you spend $40,000 renovating it, you now have a property worth in excess of $365,000.
If you are going to be selling a $365,000 home that is looking all nicely presented and modernised, do you think you have more chance of selling it in a neighbourhood with the most homes in the price brackets of (Example A $300,000 to $425,000) or (Example B $425,000 to $575,000) ?
The answer is Example B, with the reason being that a quality home is going to have a better chance of selling in an area where there are substantially more homes in the area in the higher price bracket.
With Example A, there are still too many homes in the lower price bracket and therefore your newly modernised home has too much competition and nothing to drag the price up in that area.
Consider your areas when purchase for flipping.
You might like to check out http://propertyinvestmentwise.com.au/1047/the-5-stages-of-flipping-a-house/ for more information.
I hope this helps, happy investing.
Filed Under: Investment Strategies • Property Investment • Property Investment Tips • Quantity Surveyor • Renovations
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interesting article…. I liked the idea of making sure the properties around the one in question will bring the price up overall! – good point!