Flipping Property
Flipping property is the practice of buying a house or a flat, and within a shortish period of time selling it for a profit. This can work very well, or it can prove to be a disaster. Which is the case will depend on a variety of things.
The first thing to bear in mind is that by and large the price that a piece of property is sold for is what the market has decided that the property is worth. Selling the property on for more than that is going to be tough ask, which is why a successful property flip must begin with the acquisition of a bargain.
The search
Getting a great deal on a property takes a huge amount of research. Buying with a view to increasing the value and selling on often means casting the net wide. What this means in practice is that potential investors have to get a feel for how the market is in different places. All this takes a lot of time and effort.
Buying property in an unfamiliar town is full of pitfalls. Neighbourhoods may look aright when you cruise through them, but to residents of that town they can be held in very low regard. It may not be possible to sell some properties at the price they would fetch even a few streets away because of this kind of prejudice, and it can be hard for outsiders to know about this kind of thing.
Potential
The potential for profit when it comes to flipping houses really comes when there is something wrong with the property that is keeping its price down. By working of fixing what is wrong and making the place generally more desirable as a place to live in itself investors hope to convince the market to pay significantly more for a place than it was before the improvements were made.
Adding value
How much value can be added to a property varies greatly. There is a very large part of the market that is on the hunt for ‘fixer-uppers’ and this means that often the prices of these kind of properties are artificially inflated. It is also important to be realistic about how much value is going to really be added for purely cosmetic improvements.
Skills or bills
For those that have relevant practical skills and are competent at project management it can sometimes make sense to do lots of work themselves. In a tough environment for employment, any way to become self-employed deserves consideration, but the cost of renovations have a nasty habit of spiralling out of all control and funding this kind of budget overrun has been the downfall of many.
The golden age of this kind of speculation, in the UK at least, is over. There is no easy money and no free rides – but for the smartest, the best prepared and the hardest working there is still a crust to be earned.
