Hey all,
I have been reading a fair bit about property investing and positive cash flow. I have started off very simply but plan on investing with more creativity as I learn a bit more. One area I need clarification on is buying a property to renovate then selling it straight away to make a quick profit.
Can someone please explain in simple terms how this is done. Is it done before settlement takes place and if so, how does this work? If it is done after settlement takes place, where does capital gains come into it. I am under the impression that if a property is sold within 12months of buying it, the capital gains are much greater.Please explain…
Hi
It depends on what you are after from your investment if you want to live in it then yes the captal gains tax is cheaper but if you want to move it quickly then that may not be an option.
I have successfully renovated and sold two propertys both over doubling my money, but I did live in both and was pepared to sit it out and wait.
This time I have built on vacant land and will probally not do as well, the cost of building is much more as I just found out,
If you want to just move the property fast then make sure it is in a high demand area and you make a substantial profit from the exersise or its not worth the effort.
I did a reno kings workshop and they don't usally do anything before settlement but they do go in and workout what needs to be done and measure up, then have everybody lined up to move on settlement.Another thing to consider is to buy what others see as a problem and create a solution.
If you want to, you could possibly vendor finance it at a slightly inflated price than what it is worth, and create a posative cash flow from it.But I would run that sort of thing past Steve before doing anything like that.
I hope this helps.
Hi brilliantmindster,
thanks for the answer. was really helpfull. Just to clarify though, the reno kings basically work like crazy to renovate as soon as the property is settled and then sell ASAP, copping the capital gains tax if they sell within the year?
Also, what are tips for determining what a 'high demand area' actually is. All the information I am reading is a little overwhelming, but what I have been doing is looking at is recent house sales, how many houses are on the market in the area, demographics for the area, and rental demand. Is there anything else I can look at (and how do I obtain this information)???Thanks, (promise that will be it – for now!)
The explanation : You buy a house during a housing bubble, don't do anything to it, don't even put tenants in it.
Wait 6 months, sell for 50.000 more.That's how it works, there's nothing more to it. If you want to make yourself believe you had anything to do with it you could paint it white or whatever, reorganize the garden but that's all just jokes.
The house prices in bubbles always go up, just like shares in sharebubbles ( .,net bubble )
So, just buy a random house anywhere , doesn't matter where, and sell it in 1 year for double the price.Or perhaps you do some research and figure out that this bubble has burst and many people will cry on the streets for money. Mrs Palmer : You're about to get the best advice you ever got in your life : STAY AWAY FROM PROPERTY.
Cherish my advice, read it again and again, and cherish it. Put it on a post-it on your mirror so you see it every morning. In 2 years you will thank me for giving you your best advice in your life.
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