Don’t let a property flip become a flop
Savvy buyers are snapping up renovator’s delights or seeking out infill sites to secure a spot in the sought-after inner-city suburbs of Brisbane.
But finding the right project or vacant site can be “like finding a needle in a haystack”.
Universal Buyers Agents property expert Darren Piper said property flipping could be a good way to make a lump of cash quickly, but it does come with considerable risk around finding the right opportunity, financing, getting the numbers right and executing it to perfection.
“We used to see a lot of buyers searching for years for the right opportunity, often without any previous renovating experience,” Mr Piper said.
“Sometimes they could find a gem in the rough, other times they would be forced to re-sell the property 12 months later and barely break even because they didn’t have the expertise to factor in the risks.”
A search of the term ‘renovator’s delight’ in the Brisbane Greater Region returned 21 results on realestate.com.au
One of those was a character house in Newmarket, which is on the market for $695,000 with Arthur Conias of Arthur Conias Real Estate Ashgrove.
It has three bedrooms, two studies, a sunroom, polished pine floors, ornate ceilings, VJ walls, french doors and period windows. It also has “‘fantastic bones to transform’’. Newmarket is only 5km from the CBD and has recorded a median price growth of 25.6 per cent over the past five years.
Recently released data shows that residential land values across Brisbane overall are up between 5 per cent and 15 per cent in most suburbs, since the previous valuation two years ago.
The median residential land value for 2019 rose 7.1 per cent to $455,000.
In Mitchelton, an 11-week renovation paid off for Brisbane DIY home renovators, Cindy and Dan Mead.
The couple made a profit that was the equivalent of a year’s salary when they sold the Mitchelton property they transformed while working full-time jobs.
It was the second renovation the couple has undertaken in the suburb, which has seen price growth of 32.4 per cent over five years.
But property flipping isn’t the only way small-time property developers are making a quid.
Gemmill Homes managing director Craig Gemmill said first-time buyers and investors were increasingly looking at “infill” opportunities as a way to find affordable property and create a return on investment.
Infill is the process of subdividing large blocks of land or existing properties in already established areas.
“People are looking at suburbs with established infrastructure, shops, train stations, bus networks, hospitals and schools,” he said. “The people that have these bigger blocks now can subdivide and put one, two or three houses on them. It’s a great opportunity for investors.”
But Mr Gemmill said it was important to seek advice from the professionals and do your homework.