Buying, renovating and selling homes is what Tom Hall does for a living. In the past 10 years he has flipped five houses and made an enviable profit.
His most recent project was a four-bedroom house in Melbourne’s bayside Hampton, which he purchased for $1.25 million in 2013. Hall made major improvements to the house, including a revamped al fresco dining area and new kitchen, at a total cost of $230,000.
He’s hoping to recoup these expenses and turn a sizeable profit when the house goes on the market for more than $2 million this spring.
… to this. Photo: Supplied
Hall, an electrician and former real estate agent, says successful house flipping takes hard work, perseverance and a handful of simple rules.
Start small
Amateur renovators shouldn’t bite off more than they can chew. Select a small property as your first project with a view to buying a bigger one for your second.
He turned summertime sadness … Photo: Supplied
“If you start with something small there’s less risk,” Hall says.
“I started with a one bedroom apartment in Carnegie. I had to earn my own deposit, bought it, sold it and doubled my money in three years so it was a good start.”
Buy at the right price
… into a poolside retreat. Photo: Supplied
Research the property market to find a place that offers good potential capital growth. Familiarise yourself with sales data so you know a good deal when you see one.
Thorough research could see you bag a bargain, which means reaping a bigger reward once the renovations are complete.
“One of the most important things is buying at the right price, that’s one of the main things I look for,” he says.
And while this Queen Anne may indeed look fit for a queen … Photo: Supplied
Negotiate a long settlement period
A 90-day settlement will give you time to draft designs and organize trades well in advance of your start date.
“If you have a 30-day settlement, you haven’t got as much time,” Hall says.
… it wasn’t always the case. Photo: Supplied
Tailor to a target market
Some renovators make the mistake of customizing their improvements for their own purposes. But Hall recommends keeping a specific demographic in mind. A couple without children was the prime market for a one-bedroom property in Windsor, which he purchased for $475,000. Adding a loft-style bedroom for guests or to use as a study helped fetch a sale price of $850,000.
Haggle
Every little bit counts when it comes to shaving down costs. Always ask for a trade discount when you’re buying supplies, keep an eye out for sales and make the most of the connections who can offer you wholesale prices.