70% rule calculator
A one-line rule of thumb that protects your margin: never pay more than 70% of ARV minus the renovation cost. Adjustable for soft and hot markets.
Inputs
70% standard, 65% in soft markets, 75% in hot ones
Result
Maximum buy price
(ARV × 70%) − reno
$461,000
Built-in buffer at this price
Covers holding, selling, taxes and profit
$234,000
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What is the 70% rule?
The 70% rule says: maximum buy price = (ARV × 70%) − renovation cost. The 30% buffer absorbs your stamp duty, holding cost, selling cost, tax and target profit. If the seller's asking price is above your 70%-rule maximum, you walk.
Does the 70% rule work in Australia?
Yes, with one tweak. The rule was popularised in the US where holding costs and taxes look different. In Australia, the 70% number works as a starting heuristic. In a soft market with longer sale times, tighten to 65%. In a hot market with rapid resale and low days-on-market, 75% can still leave acceptable margin.
Why use it?
It's a discipline check. Most flippers fall in love with the ARV and bid up to it. The 70% rule forces you back to the buy-side question: what's the most I can pay and still make money? The answer is your walk-away number.