Flipping property - all you need to know ahead of a purchase

10th January 2023

Flipping property can be a great way for experienced property investors to make money quickly and its popularity has grown thanks to daytime TV shows. If flipping is a concept you are curious about, this Move Places blog explains what the practice is, what to be aware of and whether flipping could be profitable this year.

What is flipping?

Property flipping involves buying a property and selling it quickly for profit, usually after making renovations that increase the home’s value. Often, the ideal property is found at auction as, generally, the perfect home to flip will be dilapidated or dated and sell for below market value. It is not always straightforward, however, and it is important to make sure you are going to make enough money before you invest to flip.

Flipping considerations for the uninitiated

So, what should a beginner think about before making the leap into property flipping? There are a number of key considerations:

Research: make sure you know the best areas and properties to invest in, taking professional advice on current demand among buyers and upper value limits in the local area.
Cost of improvements: knowing how much labour and materials will cost is key to making sure you are going to make a profit. It can be a good idea to take a builder with you on property viewings, to give you an approximate price for any work needed.
Finances: the best way to pay for a property for flipping is with cash savings but, if you don’t have the money up front, you might need a bridging loan so watch out for the interest rates.
Tax implications: flipping properties is classed as property trading. This means you would need to pay tax on any profit made when you come to sell the property. Purchasers will also pay the higher rate of stamp duty - at least 3% - if they already own a property when they make an additional purchase to flip.
Know your limits: whether it is your skills, money or the timescales you need to work to, be realistic about what is feasible and any costs associated.

Will flipping property in 2023 be profitable?

House prices have seen record highs in recent years but the market is slowing and prices are forecast to fall this year. That said, flipping property can still be profitable, although returns may be lower than in previous years everything is relative - purchase prices may be lower too. Move Places can offer advice on the property locations and types that may create a return, with some potential for distressed properties to come to market.

Can I flip properties in a recession?

According to the Office of Budget Responsibility, the UK is in a recession, which is expected to last a year. This downturn in the economy will affect the property market but there is no reason not to flip. It will be important, however, to buy below market value and keep improvement costs low to make sure you make enough profit. Research, budgeting and focusing on your own personal circumstances will be key to flipping successfully in 2023.

Buy to flip with Move Places

Move Places lists properties for sale from across the country, with some that would make ideal flip projects. We can also sell your property once your upgrade works are complete, with sales packages that are ideal for property investors looking to keep fees to a minimum. Get in touch to see how we can help you find the right investment and sell quickly to make a profit.