8. Competition from new properties

If you’re renovating units or apartments, you need to be mindful of your competition. There is a great deal of new apartment stock coming onto the market in some cities, and your renovated property is competing with this. Therefore, you need to either have an end product that is at a cheaper price point or that has a location or attributes the new apartments don’t have.

7. Not knowing what the market wants in your area

You need to know what ‘product’ is in demand in that area and deliver that. If the market wants four bedrooms, two bathrooms, multiple living areas and outdoor entertaining, you need to create that product. While you might be able to put cheaper no-name-brand appliances in the kitchen in a basic unit, in a higher-end family home buyers will want to see the European brands.

6. Not planning and costing your renovation before you start work

While important in any renovation project, this is particularly critical with major structural changes where you’re using a builder to add rooms, move walls, put in new bathrooms or bedrooms, etc. It’s critical to do all the planning up front before any physical work is done so you’re not making any changes along the way. If you’re making variations midway through a structural renovation, the cost blowout is significant and can have a major impact on your profit. Look to have everything in place, even down to the tiles and taps you’re going to use, before any work commences.

5. Overcapitalising with expensive fixtures and fittings

If you’re looking to flip a basic apartment or mid-range family home, you don’t need to spend big money on renovating the property. You want it to look nice and present well, but that doesn’t mean buying top of the range. There are fixtures and fittings that you can buy that look great but are considerably cheaper than the top-end European types. It’s about getting bang for your buck. Every dollar saved puts more profit in your pocket.

4. Not researching/knowing your likely selling price

If you don’t know what the property is likely to be worth once the renovation is complete, you’re not going to know your profit figure and whether the project is viable. You should be researching the selling price of renovated properties in the area, or unrenovated properties, and making an educated estimate of what the property is likely to achieve once renovated.

3. Not understanding the area in which you want to renovate

Every suburb has streets that are more sought after and areas that are considered not so desirable. Understanding the subtleties of your target suburbs and the values of properties in the area will help you know when you’ve spotted a good opportunity to buy at a fairly significant discount.

2. Assuming that buying something cheap is automatically a good renovation project

Cheap houses are often that way for a reason. It might be because of the location of the property, or it could be something structural. It might be because it’s a one-bedroom house in a suburb where families are the prevailing demographic. There are always property bargains to be found, but make sure you’re buying a bargain and not a lemon.

1. Rushing in and buying something with only marginal profit

In a hot market, it can be difficult to find a project that stacks up, with so many competing buyers. However, you need to hold your nerve. There’s no point buying something that’s only going to make you a few thousand dollars or, even worse, lose you money.

11. Use knockout bids, by doubling or tripling another bidder’s amount to try and psyche them out. You can also pretend you are out and wait until the third call, before coming in again with a knockout bid.

10. Break down your bids to slow the bidding if required. For example, if the auctioneer asks for $5,000 bids, offer $1,000 or $2,500 bids so that the momentum is slowed.