What to watch out for to avoid problems
Want to be a flipper? Here are some tips to avoid potential problems
Do your homework
Jo Gray from Grovens Living advises those who are considering renovating to flip to check on their neighbours.
She says: 'See what is happening in the vicinity in terms of larger developments - these can add value long-term but during the construction phase the noise, obstruction of views and dust can hinder [your attempts] to sell your freshly renovated flat.'
Worse still, if you're looking to rent out, finding tenants can be difficult for obvious reasons. Also, many buildings have restrictions on what you can and cannot do - mainly to the exterior walls, for example hanging air-conditioning units on frames.
Keep to a budget and deadline
Habitat Property real-estate agent Amy Ng says stick to what you can afford. Someone who is renovating to flip doesn't want to spend six months with contractors working on an empty flat - it doesn't make financial sense. Aim to renovate within two to four months.
Don't get caught out with hidden charges
There is a tax on property gains if you flip within six months. Most investors can get around this by holding on to a flat for two years and then selling. 'If you're renovating to flip, you've got to make it worth your while to cover that tax,' says Ng. 'As to how long you hold on to it before you sell, that depends on the market and how much money you want to make.'
Watch out for leaky rooftops
Rooftops that have not been waterproofed are common and can prove to be a big headache if they start to leak, especially during the wet season. Ng says if you buy a top-floor flat with a rooftop, make sure it's been waterproofed. 'Ask the seller if it's been waterproofed - if they lie it's misrepresentation and you can sue them,' she says. 'And if they don't know, you need to get a surveyor to check. Water leakage is costly - it makes the paint and concrete bubble.'
Research potential illegal structures
Before you buy, ask your agent about any illegal structures that may be attached to the flat or in communal areas. These can sometimes be costly to put right, or worse still you may feel you're getting more space and pay a premium, only to receive an order from the Buildings Department that you have to remove it - at your own cost. Speak to people who have 'been there and done that to help you avoid pitfalls ', Gray says.