Nobel Finance Sydney – Money Matters Newsfeed

by Tania Penwell 

You can flip your fortune just by flipping your house. If you really want to make money in real estate then you need to learn the basic principles of flipping a house. You can buy a house with no down-payment options through various loan programs, fix it up, and then sell it yourself. You can sometimes make enough profit to finance your new home with cash down. If you make enough profit then you may even think of another flipping property.

A good way to start is by locating your dream home and start working towards making it perfect for selling. Try to find a house that requires minimum structural repairs. Paint it on your own. Renovate your house with new carpentry works, plumbing and lightings and your house will be ready for sale – fetching you considerable profits to finance new projects in real estate business.

Even TV shows are much inclined to promote house flipping now-a-days. These shows will guide you through the essential tips to flip your house and maximize your profits. All you need to know and remember are the basic house flipper’s tips to save your money, effort and time. Setting an achievable timeline helps to plan and sell the house fast.

You should make an effort to know the buyer’s psychology. If you can make your home look good and feel comfortable then you will find many buyers ready to buy your property even at high price. The first impression of the house actually makes it saleable. Do not forget to harmonize the outside appearance of your house with the inside delicacies. Your target buyer should start liking the house even before entering it i.e. on the first look.

Flipping is all about renovating and selling your property. So it is better that you do not impose your tastes on your buyers. Keep the look of your house neutral so that the appeal is universal. Paint it with neutral colors and use carpets that are not too ostentatious in terms of colors and designs. Baths and Kitchens are the two most vital issues of concern in your house. The fittings can be expensive and replacements could be a head-ache. It’s best to keep these areas clean to avoid costly replacements. If you want to make your property look attractive to potential buyers then you have to maintain cleaning schedule and a proper cleaning kit. Keeping these areas grease and odor free is a challenge. Bleach and baking soda are two essential elements that help to keep the bathrooms and kitchen clean and look renewed even after heavy use.

Bleaching should be done with care as it often fades the color while cleaning the dirt and grease. Baking soda is less abrasive and can be used on steel surfaces and porcelain with a wet sponge to produce excellent results. It also deodorizes by eliminating the wet and bad odors.

Bleaching your toilet regularly is a good idea to make it look clean and healthy. Using both the agents remove hard stains and grime from marble and porcelain items. You can use burn buster stains and wax removers to clean stubborn stains without actually causing damage to your accessories and fittings.

Hiring a good contractor to supervise your renovation could be a good idea to speed up the pace of your flipping project. A contractor who knows his job quite well is also more capable of tackling renovation problems. In this way you can safely maintain your timeline to finish the remodeling and make your property ready for sale.

You should be ready to complete the paperwork and legalities for sale of your property. Obtaining permits, contracts and receipts, insuring the property against damages require preplanning so that your renovation is not put to a halt after it starts. Monitoring the progress of the renovation work is equally important.

Last but not the least; prepare a budget that is stretchable. Renovation often demands a little overspending or unexpected spending. You budget should be flexible enough to incorporate such changes.

About the Author

Tania Penwell provides information on flipping houses and other real estate topics for Real Estate Savvy – your guide to real estate.

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From Money Magazine, March 2005

1. Getting started

Do a budget. This tells you where your money is going, where you can cut back and where you can save. The budget then helps you work out what you want, need and can afford. Use our repayment calculator to see what you can afford.

Set your goals
How much can you afford? What should you be aiming for? It’s best to answer these kinds of questions now so you can work them into a budget. After all, there’s no point shopping for a mansion if you can only afford a cottage. As a general guide, your mortgage repayments should not exceed 30 percent of your before-tax income. Keep in mind, any existing debt will reduce the amount you can borrow for a home.

Control your debt
If your budget needs to get into shape, now is the time to do it. If this means consolidating a few debts, then do it. There is no point in saving hard for a deposit if you’re also being charged an astronomical rate on your personal loans.

Work your money
Maximise your savings by taking them out of low-interest bank accounts. Alternative accounts such as high-interest e-accounts or bonus savers offer a better return and they are still capital guaranteed. If you have got more time to invest, then consider a managed fund. You should consider these funds only if you don’t need the deposit for at least five years.

Check your credit rating
Before approaching a lender, ensure there are no nasty surprises in your credit file. There’s nothing worse than being refused a loan because of a silly little debt that you fixed up years ago.

Get a copy of your credit history by calling Baycorp Advantage on (02) 9464 6000 or visit www.mycreditfile.com.au. If you do find something, make sure you talk it over with your lender — they don’t like surprises, either.

Do your homework
To get the best possible home loan at the right price, you must do your homework. Contact your mortgage broker to analyse 100′s of different loan products on the market to find what suits you. The state of the market can vary greatly between suburbs and between property types. Also, what type of property are you after — a house, townhouse or unit? Consider its location and features, but make things easier by limiting your search to a few suburbs.

Get your entitlements
If you qualify, you will receive the federal government’s $7000 First Home Owner’s Grant. To find out if you are eligible check www.firsthome.gov.au. There are also state bonuses which you can find out about by checking with your office of state revenue.

Buy, but don’t move in
For some, the only way of buying a home is not to live in it. This is because of tax benefits attached to investment properties. Negative gearing brings a saving because you can claim the difference between rent received and expenses such as interest, rates and maintenance. This may be just the boost you need to get into a home, especially if you can live with your parents rent-free for a while.

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1. Make time work for you The beauty of being in your 20s is that time is on your side. “People this age can make mistakes and recover,” says Walker. “They have time to make more money and save; they have time to compound investments over a reasonably long time-frame.” Which means that your savings have a long time to grow into something worthwhile. And the same goes for superannuation — that $10 a week you put in now could make for a very comfortable (or even early!) retirement.
2. Understand your money The fact is, you’re not a kid any more, whether you’re 20 and one day, or practically 30. Your finances are your responsibility and there’s probably not a Prince (or Princess for that matter) waiting to sweep you off your feet and out of a financial disaster zone. “Focus on learning the true value of money and how to be responsible for your own,” says Walker. For more information on WLM Financial Services Pty Ltd, visit www.wlm.com.au. To download an updated version of Money Management for Women ($19), visit www.sheilafreemanconsulting.biz

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1. Work out what you want to be when you grow up While there’s no denying that this is the time for experimentation, it’s also true that wealth is generally a long-term project. For that reason, it’s good to be earning regular cash for as long as possible. Lying on the couch daydreaming about getting rich is not an effective strategy. “Getting established in a career and earning a regular wage should be one of the financial focuses of your 20s,” says Freeman and Richards.
2. Read the fine print “These days, credit is too easy to come by,” says Walker. “Marketing makes it ‘sexy’ to have flash phones, cars and credit cards, and they seem to give them out to anyone. Unless you understand your obligations and/or are disciplined, you can wind up with large bills that can cripple your cash flow.”Freeman and Richards agree. “Mobile phones can be a particular problem. Always check the fine print before entering into a contract and be sure you can sustain it financially.”

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1. Stay at home If it’s at all possible (and pleasurable), consider staying at home with the parents. You won’t be alone — heaps of 20-somethings make the financial decision to stay home and get some savings together.
2. Try to do a lot with a little When you’re in your first job and earning what seems like peanuts, it can be hard to get excited about investing. Don’t you need to be rich for that? In fact, you need less than you think to get some wealth creation strategies underway. “If you have some money saved, what you do with it depends on when and how you want to use it,” says Walker. “If the goal is short-term, invest it in cash, but if it’s a longer term, a managed fund or even direct shares might be an option. Whatever the case, look at the opportunities out there. If nothing else, you’ll learn from your experiences (positive or negative).”

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