Buy, renovate and resell homes

Home buyers pay the sale price. Your purchase and renovation money comes from your savings, private lenders, a mortgage or a small group of investors.

Profit is the sale price minus the purchase price, renovation, legal fees, carrying costs, agent commission and tax. Income arrives in lumps when a property sells, not monthly. The monthly revenue figures in the estimates are average gross profit before tax, spread over the months a project takes (for example, a sale profit of $30,000 on a six-month project averages $5,000 a month), not the sale price and not a regular paycheque.

• Judging renovation costs and timelines
• Managing contractors
• Negotiating prices

• Check the federal residential property flipping rule with an accountant or the CRA: profit on a home you owned for less than 365 days is generally taxed as business income, and profits from buying homes to renovate and resell are usually business income however long you hold them
• GST/HST may apply when selling a substantially renovated or newly built home, so confirm with an accountant
• Renovations usually need municipal building permits, and unpermitted work can block a sale
• Costs and delays can run over budget, and the market can move while you hold the property, so keep a reserve
• Carry builder's risk or vacant home insurance during the project, and check contractors have WCB/WSIB coverage and their own insurance
• Check provincial rules on disclosing defects and on how homes may be advertised and sold

Estimates typically run around $150,000 to $600,000 to start, depending on the purchase price, renovation scope and how you fund it. Savings, private lenders, a mortgage or a small group of investors may all be options.

Check the federal residential property flipping rule with an accountant or the CRA. Profit on a home owned for under 365 days is generally taxed as business income, and GST/HST may apply when selling a substantially renovated home.

Estimated monthly revenue is typically around $3,000 to $15,000, depending on the project, your costs and how long each one takes. Costs and delays can run over budget, so keep a reserve for the unexpected.