CRUNCHING THE NUMBERS

1 Purchase price To make the flip a success, know the market value of the property you want to buy and what you can you afford to pay for it and the renovation.

2 Scope of works Be clear about the work that needs to be completed to achieve your sale price – of course, this may need reworking several times to optimise your outcome.

3 Cost of works Are you hiring trades or a builder? You’ll need to decide who is doing the work and plan your delivery process. Then you can make appropriate allowances and ensure you allow a contingency.

4 Holding costs Often forgotten, there are always costs associated with holding property, so make sure you include bank fees, rates and other charges.

5 Professional fees Most big renovations will require a building permit and designs plus surveys, geotechnical reports and engineering approvals. Ensure you have enough budget to work with professionals who will ensure the best possible result for your project.

6 Sale costs Once complete, the home will need to be marketed and sold, an expense that may eat into your profit. Investigate the fees in your area for selling and the marketing budgets agents suggest.

7 Sale price The success of your project depends on this, so make sure you are able to support your expected sale price. Reach out to estate agents in the area; ask them for comparable sales as well as justification of the estimates.

8 Tax implications As a wise man once said, “If you want to dance, you need to pay the band!” So if you will be making a profit on a flip, you should expect to pay tax. Ensure you speak to an accountant about setting up your project correctly before you settle on a property, and always factor tax into the calculations.