Flipping property is an enticing strategy that has become increasingly more common over recent years, particularly since the benefits have become more apparent across the UK. Also referred to as ‘buy to sell’, property flipping refers to purchasing a property with the intention of selling on at a profit, usually after an ambitious programme of refurbishment has been completed.
This is not a strategy that will suit everyone, nor one that should be carried out without thorough research beforehand as there are some key decisions to think about before jumping straight in with both feet. Providing it is performed correctly, with extensive prior knowledge, property flipping can actually be really lucrative providing certain conditions are met successfully.
Location to flipping is key, and it is equally important to think about what your target buyer will be like. What do you think they will expect from a property? What kind of budget will they have in mind? You need to make sure you cater to all their requirements otherwise you may find yourself not making as much money as you wanted on the property, if any appreciation in value at all.
A big garden, double garage and off-road parking may be high up on the wish list, however, if you choose to flip a property in a high crime neighbourhood, then you may want to look elsewhere. If you are planning to flip a three-bedroom semi, then your target tenant would possibly be looking for their first or second home. If this is the case, local amenities and new infrastructure around the area are going to be just as important as the property itself. Consider the local transport links, will professionals and students be able to access the city centre easy and quickly during their morning commute?
Location is imperative in getting a timely sale. To put this into simple terms, a property situated in an area that is seen as undesirable may struggle to sell on or capture a buyer’s attention, whereas the worst house in the best street that has been brought up to standard will be attractive for those considering a new place to live.
One of the perfect recipes for successfully flipping a property and making maximum profits is circumstance. When someone needs to sell urgently, and you are also able to act quickly, this can set you up in a great position to make some serious gains. Fast transactions help you not only secure your next project quickly, but also save you money in the long run. With that being said, competition can be fierce for these types of properties when they first come on the market, so be careful not to get in a bidding war with other people who have interest in the same property, or you may find yourself paying more than you initially planned, which eats into your potential profits.
Acquiring a property and performing subtle or even extreme renovations can still achieve great profits. You must secure the property at the right price, manage all refurbishments well, keep within budget and achieve a good sale value. If you do not see property available for a good price and believe that the work required to add enough value may exceed your budget and fail to achieve a satisfactory return on investment, then walk away and look elsewhere, there will always be other opportunities available.
Flipping a property takes patience. Do not rush into the first property you see and try and make it work for you. It is vital you perform thorough due diligence on the projected sale price while also being realistic regarded the price you will eventually receive. Don’t be foolish and just assume. Research is imperative. Use rightmove.co.uk past sold prices to view the potential of your property and compare the houses against yours to ensure you are not over committing yourself. RW Invest is a buy to let company based in Liverpool with a proven track record of securing high capital appreciation values in their completed developments. One of their top performing developments named Manor Mill in Leeds achieved a 107% increase in their property once sold, with numerous other developments following suit.
Once you have a well-researched idea of the end value you can receive, you should begin to gather numerous quotations for the essential forthcoming works. There are several avenues you can take. You can instruct the main contractor who will oversee the whole project, or you can manage individual tradesman yourself.
Don’t forget the extra expenses that you will be expected to pay including stamp duty, solicitor fees, sometimes even a capital gains tax if you are choosing to sell a second property that isn’t your main residence.