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toronto flip housesAdmit it – no matter how home renovation-averse you are, at some point you’ve probably considered flipping a house. HGTV makes it look so easy – buy a fixer-upper, throw a little money at it and voila – you’ve just made $50,000.

Of course the reality of flipping houses for profit isn’t quite as simple as ‘reality TV’ would like to make us believe. We’ve worked with contractors and renovators since our early days in real estate, and if you’re considering buying a house to flip it, there’s a lot you need to know:

1. It’s all about the math. When it comes to deciding which property to buy, you need to do a lot more than determine fair market value. How much will your renovations cost? What will your closing and selling costs be? What are your carrying costs? What is the tax implication of flipping? (NB: if you flip frequently or are a REALTOR, your profit may be taxed as income instead of capital gains). Don’t get emotionally attached when purchasing a property – you’re an investor, not an end-user. Don’t pay $100K over asking unless the house was underpriced by that much in the first place.

2. How much can you sell it for? This is one of the most important factors in choosing what property to buy (and one of the reasons you want to work with an experienced REALTOR). Buyers don’t care what you paid for a house or how much money you put into it or how much profit you want to make. Find out what prices the street can carry and don’t over-renovate for the street. If you buy a house for $600K , put $100K of renovations into it, on a street where the most expensive ever sold is $700K, prepare to lose money.

3. Location, location, location. To really see a profit from a flipped house, you need to buy in a HOT neighbourhood that has a low supply of renovated homes and a high demand from Buyers. Easy access to transportation, parking and shops/restaurants/services will all be factored into how much a Buyer will be prepared to pay for your house.

4. Time is of the essence. While you’re renovating your home, you need to remember your carrying costs: mortgage, insurance, taxes and utilities. If it takes you 12 months instead of 6 months to complete the project, your costs have just gone way up (and you’ll be paying those costs out of your profit margin.)

5. Your contractor is key. If you aren’t a contractor yourself, make sure you align yourself with someone you know, like and trust. Their ability to manage costs and a timeline will impact your profitability, and if your contractor does shoddy work, you’ll feel that in your pocketbook.

6. Focus your renovation dollars in the right places, for example, kitchens, bathrooms, floors. You’ll likely have unsexy money to spend too, and don’t forget that the Buyer who buys the renovated house doesn’t want to worry about the furnace, the electrical or the roof either. Here’s a link to a blog we wrote about What to Renovate and Why.

7. Always remember your target Buyer. If you’re looking to sell your renovated house for $800K, remember that Buyers at this price point will have definite expectations of features and finishes. Too often we see cheap flips that don’t sell because of poor quality materials and workmanship.

8. Permits, permits, permits. No, you can’t just tear down walls and change out the knob and tube electrical because you want to. Most buyers will want to see that your renovation was done on the up-and-up, and that means permits (and permit headaches). Buyers will pay more for a home that was renovated with permits. Click here to see when you need a building permit for in Toronto.

9. There are no guarantees. Yes, some people make a lot of money flipping houses in Toronto, but not everyone makes a profit.

10. Flipping houses is a second job. Don’t fool yourself: flipping a house for profit takes a lot of time. You’ll be picking finishes, managing workers and timelines and need to check in on the progress frequently.

11. Have a plan, a budget and stick to it. This isn’t the time to get creative and make it up as you go along.

12. Make sure you work with a REALTOR who has experience guiding people through the flipping process. As always, we’d be happy to chat!





  1. Hi there, my name is greg and I happen to come across your page! I’ve to admit I like what I read and would like to ask a few questions about flipping houses for a profit. (1)Where in Toronto /GTA a good area to begging flipping houses for under 400k? (2) Do you know a good real estate agent? Much thanks Greg

  2. If I were to choose to flip property for profit, is there any laws out there that prevents me from flipping within a certain time period. Do I have to maintain ownership for a certain period of time prior to resale to prevent manipulation of the market?

  3. Hi I’m a general contractor based in Hamilton. I am very interested in idea of flipping a house. I am just not sure how to get started with financial aspect, especially considering my company has not established a credit history. Is there any options I could look into?

  4. I’m interested in buying a house from a builder to sell for a bit more once it’s complete. my question is, is it profitable or will my profit go to reality fees and closing cost. Also I know if I do it as a business that I will get taxed. I just don’t know how much?

    • You’ll need to consider realtor fees, land transfer taxes, legal fees and mortgage penalties which may very well eat up your profit, but it all depends on what you buy, where you buy and when! If homes in your area are likely to go up by more than what your costs are in your desired timeframe, than it might work out. If the home isn’t your primary residence, then any profit (after expenses) will be considered a capital gain (though Revenue Canada sometimes taxes it as income if they feel that flipping is your job and not an investment). You should talk to an accountant to get specific advice for your situation.

  5. i purchased a TH in sharon Ontario (next to newmarket) I payed 479k now they are doing ph 2 starting at 550k 2 car garage 1850 sq ft.
    I’m allowed to sell prior to closing after builder sells out. What do I need to know?


    • Melanie Piche says:

      Well that sounds like it’ll be profitable for you! What you’ll be doing is actually called an assignment – here’s a blog we wrote for buyers about assignments that’ll give you a bit more detail. A good real estate agent should be able to take you through the process and what’s required from the builder (costs, permissions and restrictions on advertising). Good luck!

  6. What about building and selling a house? If I own a house now and am building a house can I designate the second house as my principal residence and if so how long do I have to live there in order to not be subject to capital gains on the new house?

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