Whilst many do make good profits from flipping units, apartments and condominiums, its arguably more profitable to flip standalone properties like houses and sometimes townhouses (depending on the flexibility of the body corporate/strata management). Houses stand a better chance of increasing in value due to the fact that you can do so much more to a house versus an apartment/unit.
To best succeed at flipping property, you need to find real estate that you know you can add a great deal of value to with the least amount of budget. Never over capitalise a property - that is, do not invest too much money in renovating a property as you might not get that back when you sell and can even make a loss on the whole investment.
Look for properties that aren’t getting top prices because they are in a state of disarray or the fittings and general state of the property hasn’t been kept well. You need to make sure that you have a budget for renovations in mind when purchasing a property to flip. Generally it shouldn’t be more than 10% of what you paid for the property unless you know that you are going to make a greater return.
In order to ensure you get the most benefit from flipping property, here are some important points to note:
* The rules of traditional real estate investment still apply - location, location, location is still an important point to remember. Don’t purchase a property in an area that no one wants to purchase in or where the market is absolutely flat or declining. Even if you have found an unbelievably priced property that you think you can add a great deal of value to, purchasing in a bad location still limits the profit you can realise from flipping
* Look for the worst home in the best street. If you can find homes that are surrounded by a great neighborhood, then you’ve got a much better chance of flipping for a good price once you’ve done the place up
* Negotiate with the agent - make sure you are getting the best price you can for the property. Don’t get caught up in the excitement of the potential profit you can make from the great renovations you are going to perform. Get the best price on the property you can and be prepared to walk away if the agent doesn’t negotiate
* Budget for surprises. Even with a budget in mind for renovations, chances are something will come up, so make sure you have a buffer budget to cover these. If you are purchasing foreclosure properties then you might not even get a good look at the property. In this case, make sure your buffer budget is a little larger.
* Don’t quit your day job: Property flipping is not a hobby, but can be a second job. There are a lot of sharks out there that do it full time and they are your competitors.
* Consider the tax consequences of flipping property: Depending where you live, the tax consequences of flipping a property may impede your ability to make good profit on a property. Make sure you take all of these into account when deciding on a property to purchase for flipping
For more valuable information, resources and advice on how to profit from real estate investments including various little known yet highly profitable techniques, visit ProfitFromRE.com