PROPERTY INVESTMENT
What does flipping property mean ?
Over the years , we have seen many people buy property with an intention of renovating the property in order to increase its value in order to sell it and make profit , and that is a property flip . This is very different from buying to own , because when one buys to retain and live in a property , they bring a more personalised touch to the changes they might do on the property .
It is also important to know your market when you go into property flipping , such as looking at what kinds of properties others buy for flipping , so that you can make informed decisions . Buying for self is very different from buying to flip , one is an emotional purchase and the other should not be emotional because you have no prior knowledge who will occupy the property .
WHAT STRUCTURE IS BEST ?
There is a general rule of thumb that says to acquire a property to flip , you should not pay more than 70 % of the future selling price minus the costs of repairs , this gives some guidelines to your numbers because some renovations may be simpler ones that cost less or bigger ones that require changing the structure and layout of the property .
Doing this kind of business also means you have to create a budget and a project plan with timelines , this allows you to see how far and how realistic your money will stretch . If you are going to sell the property using a property practitioner , remember to factor their commision in your budget as well .
62 AUGUST 2022 SA Real Estate Investor Magazine