Answer these questions to increase your chances of a successful reno/resale
The reality shows make it seem like fun and laughs. But before you jump into renovating and selling a house for profit in Oxford County, you need to face, well, reality.
Flipping a house can be profitable, but first ask yourself these three key questions – and make sure you know the answers.
1. Have you calculated all your financial obligations beyond the renovation costs?
The costs of buying a house include land transfer tax and HST on transactions costs (such as legal fees.) While you own the house and are renovating it, you’ll need to pay for insurance and utilities. And you need to be aware of the Residential Property Flipping Rule introduced by the Canadian government at the beginning of this year (2023). Sometimes called the “Anti-flipping Rule”, it means that if you sell the renovated house within one year of purchasing it, the profit is fully taxable as business income and doesn’t qualify for the 50 percent capital gains inclusion rate or the Principal Residence Exemption. (Talk to a real estate lawyer or an accountant early on.)
2. Do you have the time and knowledge?
House flipping is much more than a hobby. The faster you flip, the greater your profit (bearing in mind the new rules). You’ll need to invest a lot of time even if you’re not doing the work yourself. If you’re acting as a general contractor, you need to have a solid grasp of the process, including the order in which jobs need to be done, what the Building Code requires, and the availability (or not) of local tradespeople.
3. Do you know the Woodstock real estate market?
Successfully flipping a house means finding one that has the potential to significantly increase in value after renovations. So you need to find the perfect property – a house in a desirable location that needs repairs or updates to make it attractive. That’s where a local Woodstock REALTOR®, with knowledge of the Oxford County market, an understanding of local zoning, and a firm grasp of the competition in Woodstock and area is your best ally.
I work with Oxford County home buyers and home sellers every day, so I can even help you understand which features and which renovations will catch the eyes of interested buyers in the Woodstock area.
House flipping can be a great – and profitable – adventure, if you’re well prepared.
Get in touch with me today, and let’s start a conversation.
