Flipping houses can be a profitable strategy for property investors in Australia—but only if you do the numbers right. While TV shows often glamourise the process as a fast-track to wealth, the reality is that successful flips depend on rigorous financial due diligence and clear planning.
This comprehensive guide walks you through the essentials of flipping property, how to conduct a feasibility study, and the common mistakes to avoid so you can confidently approach your next renovation project with profitability in mind.
What Is Property Flipping?
Flipping, in the property world, refers to buying a property—usually below market value—renovating it, and reselling it quickly at a higher price to generate a profit. The goal is to “buy low and sell high” in the shortest time possible, minimising holding costs and maximising return on investment.
There are two main ways investors generate profit from a flip:
- Market momentum: Capitalising on strong market conditions and natural appreciation.
- Manufactured equity: Adding value through renovations and upgrades.
The key, however, is not just choosing a property with potential—but knowing your numbers before you commit.
Why a Feasibility Study Is Essential
The feasibility study is your financial reality check. It answers the question: Will this project actually make money?
Before you commit to any purchase, you should be able to forecast:
- Your total project costs (acquisition, renovation, holding, and selling)
- The target sale price after renovation
- Your expected net profit (before tax)
The Golden Formula
There are three key figures that determine your success or failure:
- Purchase Price
- Renovation and Holding Costs
- Expected Sale Price
Professional renovators often calculate these figures in their head. But as a rule of thumb, you should always formalise this using a feasibility calculator or spreadsheet to avoid overcapitalising or misjudging your profit margin.
“Get your Access to our Fully Customisable Investment Property Research and Analytics Tool Now!”
Introducing the Renovation Feasibility Tool
To help make this process easier, tools like SuburbsFinder’s Renovation Feasibility Calculator allow you to compare up to four different properties at once. This means you can evaluate which deal has the highest potential return before investing a dollar.
Here’s a breakdown of what each field means in the tool:
Key Inputs:
- Suburb/Address – Where the property is located.
- Suburb Median Price – Benchmark value based on location and property type.
- Advertised Price – Asking price by the vendor.
- Offer Price – The amount you intend to offer, usually lower than the advertised price.
- Deposit – The upfront capital needed for the purchase.
- Mortgage – Loan amount based on your borrowing capacity and deposit.
Acquisition Costs:
- LMI (if applicable), Stamp Duty, Solicitor Fees, Pest and Building Inspections
- These contribute to your Total Acquisition Cost
Renovation Costs:
- Estimated Renovation Cost – Ideally not more than 10% of the purchase or sale price.
- Contingency – An additional buffer for unexpected expenses (often 10-15% of the renovation budget).
Holding Costs:
- Loan Repayments
- Council Rates, Water, Electricity
- Insurance
These expenses accumulate during the time you hold the property, usually from settlement to sale.
Selling Costs:
- Agent Commission
- Marketing and Styling
- Legal Fees
Finally, you’ll arrive at your Total Project Cost, Target Sale Price, and Target Profit (in dollars and percentage).
Our House Flipping Feasibility Tool lets you compare 4 different properties at the same time to help you identify which project could bring maximum revenue after renovating, or manufacture capital growth and sell after.
But before you start using the feasibility tool, best to understand all the fields first.
- Suburb is the name of the area. You can also type in the address of the property instead.
- Suburb Median Price is the median property price for the area. Median price varies based on number of bedrooms.
- Advertised Price is the amount required by the vendor for the property to sell.
- Price to offer to the vendor is the amount to be offered to the vendor which is usually lower than the advertised price.
- Mortgage is the percentage or the amount you need to borrow to purchase the property.
- Deposit is the outright cash needed to use as initial payment to buy the property.
- Other costs include Lender Mortgage Insurance (LMI) if applicable, Stamp Duty, Solicitor, Pest inspection, etc.
- Property acquisition cost is the total amount required that you must pay right away to purchase the property.
- Renovation cost is the amount required to spend to do the renovation. As a rule of thumb, your renovation cost should not be higher than 10% of the property’s value or sold price if you’re renovating and selling the property. The 10% would include both labour and materials.
- Contingency is an emergency fund which you can use in case some unforeseen event happens during renovation.
- Total renovation cost is the sum of renovation cost and contingency.
- Holding period is the total number of months you’ll hold the property. It starts from the day you settle and ends from the day the property is sold after renovation.
- Monthly repayment is the amount you pay the bank based on the interest rate on your mortgage.
- Monthly council rate, water rate, and electricity are monthly recurring costs for holding a property during renovation.
- Monthly insurance is the amount you pay for the premium of the building insurance which is important when buying a property for flipping or holding.
- Total holding cost is the estimated total amount needed after you settle to the day the property is sold after renovation.
- Selling costs such as agents commission fee, advertising & marketing costs, styling, legal fees for engaging a solicitor, and other miscellaneous costs are the fees associated when selling a property.
- Total selling cost is the total amount to pay when selling the property.
- Total cash needed to fund the project is the sum of outright cash required to acquire and renovate the property.
- Total project cost is the sum of total cash needed for the entire project which includes acquisition, renovation, holding, and selling.
- Target sale price is the amount you aim to sell the property after renovation.
- Target profit is the amount you expect to make, before tax, after selling the renovated property.
- Target profit in % is the amount in percentage that you expect to make, before tax, after selling the renovated property.
Now that you understand what each field represents, you can start using the feasibility tool.
“Start Using the Property Flipping Feasibility Tool Here”
Renovate for Profit: Smart Improvements That Add Value
When renovating, the focus should always be on improvements that provide the greatest return for the least cost. Here are common renovations that boost perceived value:
1. Flooring
Replacing old carpets or dated tiles with timber-look flooring or fresh carpet can transform a home. It’s one of the most visible changes buyers notice.
2. Painting
Fresh paint—especially in neutral tones—brightens interiors and creates a clean slate. Ceilings, trims, and feature walls should not be overlooked.
3. Kitchen Upgrades
Even a budget kitchen reno (around 2% of the property’s value) can make a huge impact. Focus on new benchtops, cabinet fronts, handles, and modern appliances.
4. Bathroom Improvements
Avoid full gut jobs if possible. Repainting tiles, resurfacing bathtubs, and updating vanities and tapware can refresh the space without a complete remodel.
5. Exterior Curb Appeal
First impressions matter. Pressure wash the driveway, repaint the front fence, tidy the garden, and replace the mailbox if needed.
6. Lighting and Fixtures
Swap out dated fittings with modern LED lights or pendant features. It’s a low-cost upgrade that modernises the space instantly.
7. Windows and Treatments
Install fresh blinds or curtains that match the overall aesthetic. Natural light and privacy control are top buyer considerations.
How to Avoid the Most Common Flipping Mistakes
Overcapitalising
Spending too much on renovations relative to the property’s resale value will kill your profits. Always work backward from the expected sale price to set your reno budget.
Underestimating Costs
Don’t guesstimate. Research thoroughly, request multiple quotes, and add a contingency. Labour and materials can blow out quickly.
Holding for Too Long
Every extra month you hold a property eats into your profit—through interest, council rates, and utility bills. Target properties in suburbs with low days-on-market (ideally under 50 days).
Ignoring Tax Implications
Talk to your accountant before you start. Capital gains tax, renovation timing, and whether something is classified as a repair or improvement can all affect your bottom line.
What You Need to Be a Successful House Flipper
1. Capital
You’ll need funds for the deposit, renovation costs, and holding expenses. Relying on credit cards or loans for reno costs can quickly eat into profits due to interest.
2. Time
Flipping is not passive income. Be prepared to spend weekends on-site, chasing tradies, managing timelines, and reviewing progress.
3. Skills
If you can handle basic repairs, painting, or tiling yourself, your margin improves significantly. Otherwise, budget for qualified trades.
4. Market Knowledge
Know which suburbs are growing, what buyers expect, and how much renovated homes sell for. Tools like SuburbsFinder can help you quickly evaluate suburb-level trends and growth potential.
5. Patience and Judgement
Avoid rushing into the first property you see. Professionals analyse, negotiate, and plan before pulling the trigger. Beginners often act emotionally and pay the price.
How to Find the Right Property to Flip
Focus on properties that:
- Are structurally sound but cosmetically tired
- Are below the suburb median price
- Have renovation potential without major council approvals
- Are in locations with low vacancy rates and strong demand
Look for distressed sales, deceased estates, or under-managed rentals. These are often undervalued and ripe for a makeover.
Use a suburb research tool to assess:
- Median price trends
- Days on market
- Rental yields
- Vacancy rates
Profit Comes From the Plan, Not Just the Paint
Flipping houses can be a profitable short-term strategy, but only when approached like a business. If you treat it casually, you risk losing both time and money.
Your best asset in this game is good judgement—knowing when a deal is right, what renovations will yield the highest return, and when to walk away. Combine that with a solid feasibility study and you’ll be ahead of 90% of aspiring flippers who rely on guesswork and luck.
