House flipping: eight top tips to profit from quick property turnarounds

While property is generally regarded as a long-term investment vehicle, flipping houses can also be an incredibly profitable investment strategy.

It allows real estate investors to buy, renovate and resell properties for a significant return.

Over the past few years, house flipping has gained massive popularity in Australia due to rising property prices and strong demand for updated, move-in-ready homes.

Whether based in the big cities like Sydney or Melbourne or in smaller, up-and-coming areas, there are plenty of opportunities to cash in on the market.

Australian home owners are, on average, choosing to stay put for roughly eight to nine years but others are looking for quicker returns.

With the proper approach, house flipping (the practice of purchasing a real estate asset and quickly reselling it for profit) can boost an investment portfolio and let you tap into the real estate markets that are still experiencing growth.

1.    Accurate budget planning

When flipping a house, it’s crucial to factor in all the costs involved to avoid nasty surprises later. Start with the purchase price, which is likely your biggest upfront expense. Then, plan for renovation costs, including materials, labour and those inevitable unexpected repairs.

In addition, don’t overlook holding costs like loan repayments, utilities, insurance and council rates while you own the property. Finally, budget for selling fees, such as agent commissions and legal expenses.

With the median Australian residential property hitting $800,000, the stakes are higher than ever. Set aside a contingency fund to cover any surprises and protect your investment. This extra cushion can make all the difference in ensuring your flip is a financial success.

2.    Market research

To succeed in house flipping, focus on high-demand neighbourhoods and property types. Some of the most profitable opportunities in Australia right now are in regional areas, where growth is booming in some parts of the country.

CoreLogic Head of Research Eliza Owen states, “The Covid-boom unlocked enormous value across more affordable regional markets, such as South Australia’s South East region.”

Areas like this and regional Western Australia offer lower buy-in costs with a strong potential for returns.

Look for properties that cater to local buyers, such as family homes, stylish apartments or eco-friendly designs.

Stay ahead by using real estate platforms to research market trends, median prices and demand. These tools help you spot the best opportunities and make smarter investment decisions.

3.    Profit potential

Buyers actively seek renovated, move-in-ready homes, which creates a high demand for flippers who can deliver.

Ensure your flip is profitable by using the 70 per cent rule. Calculate the maximum amount you should pay for a property by taking 70 per cent of its after-repair value (ARV) and subtracting the estimated renovation costs. For example, if the ARV is $800,000 and repairs will cost $100,000, you shouldn’t pay more than $460,000.

This simple formula helps protect your profit margin and keep your numbers in check. With the right property and a proper budget, you can ride the wave of Australia’s market and maximise your returns.

4.    Permits and approvals

Getting the necessary permits for renovations helps you stay compliant and protect your investment.

Permits are often required for structural changes, electrical work, plumbing and extensions to ensure everything meets local council regulations and safety standards. For example, in Victoria, the local council, a registered surveyor or the Victorian Building Authority can advise whether your project requires a building permit.

Skipping this step can lead to costly fines or delays or being forced to undo the work. It can also turn off buyers, as unapproved renovations might fail inspections or impact the property’s value. Avoid these headaches by checking with your local council before renovating and working with licensed professionals who know the approval process inside and out.

5.    Capital gains tax

When flipping houses in Australia, you must understand how the capital gains tax (CGT) could impact your profits. If you sell a property within 12 months of owning it, you’ll be taxed on the entire capital gain at your marginal tax rate. However, if you hold onto it for at least 12 months, you could qualify for a 50 per cent CGT discount as an Australian resident, cutting your tax bill in half.

This discount can make a big difference to your bottom line but the rules can get tricky, depending on whether you’re flipping as an investor or running a business. To stay on the right side of the law and keep more of your profits, it’s a good idea to consult an accountant who can help you navigate your tax obligations easily.

6.    Hidden costs

Hidden costs can sneak up on you and eat into profits if you’re not ready.

One big culprit is unexpected repairs, such as water damage, outdated wiring or structural issues that only show up after renovations begin. These surprises can skyrocket your budget, so having a contingency fund is non-negotiable.

Another common pitfall is prolonged holding periods. For example, delays in renovations or a slower-than-expected sale mean you’re stuck paying for mortgage repayments, utilities, insurance and council rates longer than planned. To avoid these headaches, price your property competitively and always expect the unexpected when setting your budget.

7.    Return on investment

To calculate your ROI on a house flip, compare the amount you have invested in the property, including the initial purchase price plus any further costs, to its current value. Your total costs include the purchase price, renovation expenses, holding costs and selling fees.

When planning renovations, consider what materials your construction team already has and what needs to be purchased.

Overlooking these details can quickly drive up your budget. To avoid overcapitalisation — spending more than the market will pay for — do your homework on local trends and buyer preferences. With solid market research and smart budgeting, you’ll set yourself up for a flip that delivers great returns.

8.    Sustainability and trends

Adding sustainable design and features to your house flip is a fantastic way to attract eco-conscious buyers and boost your property’s value.

Real Institute of Australia President Leanne Pilkington notes, “Sustainability will continue shaping housing policy and Australia’s progress toward environmental targets.”

Buyers in 2025 are looking for energy-efficient upgrades like solar panels, water-saving features and homes built with sustainable materials.

Trending renovation styles this year include open-plan layouts with plenty of natural light, biophilic designs with indoor plants and minimalist finishes that complement eco-friendly elements.

Successful property flips

Approaching house flipping with careful planning and professional guidance is crucial to maximise your profits and avoid costly mistakes.

Working with experts and thoroughly researching each step sets you up for a successful, relatively stress-free flipping experience.