“I bought last year (in Toronto), so that helped with the market appreciation over the past year. And I made sure to buy something that had an unfinished basement,” Odane Harding, an agent and first-time flipper, told Canadian Real Estate Wealth. “That was what I did originally and (the basement) was the only thing I was going to improve in the house.”
The freehold townhome is located in the Malvern neighbourhood in the Greater Toronto Area and was purchased for $410,000.
While converting the basement into a separate apartment, however, Harding did some research and realized he could make one other major tweak to entice the next buyer.
“I started looking at the price disparity between three bedroom and four bedroom houses and realized there wasn't a big discrepancy there,” he said. “I ended up taking away a bedroom and adding an ensuite bathroom to the master bedroom and an upstairs laundry room.”
He spent $68,300 in renovations – which also included some exterior work and a side entrance -- and hopes to sell the property for over $700,000 – which would be a nice profit for a year’s worth of work.
In Harding’s case, the lucrative investment was a combination of good timing and smart real estate analysis; he was able to purchase a home right before a price boom and analyzed the best way to renovate to entice a would-be buyer.
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One investor, currently working on his first investment flip, tells CREW readers about his strategy for making hundreds of thousands on one deal.