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Buyer Beware Flippers Looking for Properties to Turn a Quick Buck

There is a growing frenzy of house flipping in the Australian real estate market. It is a real estate investment craze that has grown in leaps and bounds in recent years as a new kind of investor looks for homes they can buy cheap and resell quickly after carrying out a low cost “sprucing up” to make the property look more attractive.



The property flipping buzz is perhaps driven by real estate shows such as “The Block” which make the business appear easy and lucrative. Flipped properties are generally sold within a year through a combination of aggressive pricing and intense marketing. That usually means that the property investor will be looking for bargains when buying the buildings to be flipped and this can be to the detriment of the seller.



The business is partly driven by the current market activity. The Australian real estate market is in a kind of mini-boom so flippers can buy more properties with confidence and move them quickly to recoup their investments.



House flipping is also lucrative because current investors do not have to compete with upcoming construction projects as was the case a decade ago. What is being sold are mainly pre-existing properties and that creates some good activity in the market.



The risk for the buyer


The typical master flipper is looking for a low-ball price for your property so they will generally be taking advantage of sellers looking for a quick sale. They target older neighborhoods where they can find cheap and older properties that can be window-dressed and resold at a handsome profit. They are targeting a buyer that is shopping for a newish house on the lower price range.
Property flippers also target distressed properties and foreclosures that can be purchased for a bargain and held for future rental income or for flipping. Due to the nature of the flipping business, the buyer needs to be more cautious when purchasing the property. The investor or seller’s approach is to maximise value while doing very little to improve the condition of the property. Here are some precautions to undertake when buying flipped properties.



Inspect all the faucets and appliances:
For the previously mentioned reasons, you need to be more thorough in your building inspections melbourne. The flipper will generally focus on the shiny objects that will “switch on” your emotions rather than on the fundamentals of the property. Most flippers focus on the bathrooms and kitchens as the bait so focus on these areas to ascertain that they have not done a shoddy job.



Look beneath the cabinets:
House flippers will do the cosmetic while concealing underlying issues. They could simply re-face the cabinet without fixing functionality and structural problems. So don’t just be wowed by the beautiful cabinetry without taking your time to carry out a thorough inspection.



Look at the attic:
We rarely pay close attention to the attics. Take a detour and give it a quick glance to assess its condition. A good attic is essential to the proper ventilation and energy efficiency of the home. Check to ensure it is well maintained and that the attic insulation is in good order. Ensure that there are no safety defects such as loose wiring.



Check if the hot water heater works:
Does the water heat look old? Then it is obviously old and might be having some defects. Fixing a water heater is a major expense so if it defective, raise the issue with the seller.



Air conditioning:
If the property is old, then it is probably using old ACs that may no longer be operational or which will cost you a lot of money to fix.



State of the plumbing:
How good is the plumbing? Are the water distribution pipes in the house in excellent shape? Are the drains in good order? Plumbing is also a major expense so you need to hire a professional property inspections melbourne expert to look at its condition as well as other structural issues in the property.

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