Buy, fix & flip for profit in 2021
Flipping properties for profit used to be the preserve of the more mature investor – one who had years of experience - and cash - behind them. The allure of the earnings has, however, tempted an entirely new generation into this buying and selling sector.
What is property flipping?
Also known as ‘fix to sell’, ‘fix and flip’ and ‘property trading’, property flipping is the act of buying a low-cost property that needs renovation or one that can be upgraded, completing the work and selling very soon after for a profit. A return on investment of 20% is the gold standard in property flipping.
Flipping is chosen by many investors as an alternative to buy-to-let. The advantage is always being able to free the money used in the initial property purchase, rather than having a large deposit tied up in a rental for years.
Who is flipping property in 2021?
While seasoned property investors are quietly going about their business, there is an entirely new generation who are publicly broadcasting their love of property flipping. For example, 24-year-old property investor Jack Smith regularly takes to YouTube to teach others about flipping property. His audience? Those aged 16 to 30. Or head over to Instagram where you’ll find many couples with young families making money by moving from renovation project to renovation project – all while toddlers play among the building tools.
What makes a good property to flip?
Before you start looking for a property to flip, it’s worth knowing what improvements add the most value (this blog by our sister company Open Property Group is a good place to start) and the upper-end values in your property’s location. This way, you’ll know the cost of planned works will not compromise your profit when the house is sold on.
Opt for a property that has the widest appeal – two and three-bedroom houses tend to attract the most interest from buyers. Not many properties are sold without central heating, inside WCs and double glazing – the traditional ways of adding value – so 2021’s property flippers have to be more creative and in tune with modern lifestyles. What remains true is that profit rarely comes from a purely cosmetic update, so expect to undertake a degree of structural, refitting and/or remodelling work.
Internally, creating a ground floor utility or cloakroom, making a big open plan living space, adding an extra bedroom or two by extending/converting and generating an en-suite will add desirability. If you can fashion a home office from the property, even better. Gardens are a big selling point, so a garden room and smart landscaping will be appealing facets, as well a revamped exterior and off-street parking.
Where can I buy a property for flipping?
Don’t discount the open market when looking for a property to purchase as plenty of sellers will naturally opt for a High Street estate agent when looking to move. Your choice may be limited, however, as many agents are unwilling to take on the type of property that makes ideal flipping projects.
Move Places is the first port of call for many property investors as we frequently have properties for sale that present exceptional flipping opportunities. We also run online property auctions where you can bid and complete on houses on the same day to get your project off to a quick start.
What next….rent out or sell on?
The key to making the best profit possible is to sell property fast - as soon as any renovation or improvement work is completed. This will minimise the chance of the investor making any mortgage repayments, which would eat into their profit, and will free equity fast to make another purchase. Despite this, localized market conditions mean some flippers are taking the long-term approach by living in the property they intend to flip and undertaking the work themselves to keep costs low.
When the work is completed, Move Places can market the property to its waiting list of buyers, as well as advertise the property across more than 20 property portals (including Rightmove and Zoopla), or you can resell at one of our property auctions for a super-quick guaranteed sale. If it isn’t a sellers’ property market and profit is not forthcoming with a sale, an investor can choose to rent out a property they have renovated and sell when conditions are more favourable.
If you are looking to flip, and therefore need to buy and sell properties, come to Move Places for both! Contact us today and we’ll help start your foray into flipping.