fbpx

House Flipping: How it Works in the Real World


House Flipping
House Flipping: How it Works in the Real World

According to recent estimates, at least 200,000 residential properties in England alone have been sitting vacant for at least six months. Of which, the vast majority are in a state of repair that renders them ‘uninhabitable’ in their current condition.

All of which adds up to a world of potentially lucrative house-flipping opportunities for new and established investors. The appeal of buying low and selling high is easy to understand, but flipping properties for profit is not always as easy as it sounds.

Successfully flipping houses for profit means focusing just as heavily on the research and planning process as the subsequent renovations to the property; more specifically, there are four equally important factors that contribute to a successful house-flipping project:

Choose the Right Financing Option

What constitutes the ‘right’ financing option for you will be determined by a multitude of factors. Examples of which include how much of your own capital you intend to invest in the project, the amount of money you need to borrow, how quickly you need it and whether you intend to pay it back long- or short-term.

Prior to taking things a step further, consult with an experienced broker to ensure you understand the options available to you and make the right decision.

Identify the Best Area

The best areas for flipping houses are not always as obvious as they seem. You of course need to find a location where demand is high, but you also need to be mindful of historic and projected house price increases. High demand areas with properties that are undervalued can be particularly great for buying low and selling high.

See also  Brief Introduction About Metal OEM Services Provider

Talk to local estate agents and research the area in-depth. Do not read too much into your own first impressions, and remember that your own personal opinions and preferences are not what matters most.

Choose the Right Type of Property

There are a few things that need to be considered when choosing the right type of property to buy, or renovate and sell at a profit. The first of which is the size of the property, which needs to be proportionate to both your capabilities and your budget. If this is your first house-flipping project, set your sights on something fairly small and simple.

After which, you will need to carefully assess the condition of the property and the extent of the renovations needed. A full survey and structural inspection will need to be performed, so you know where you stand regarding the subsequent work required.

Buy Off-Market

The biggest bargains on the UK property market are bought and sold in an off-market capacity. Property auctions in particular can be great for picking up all types of residential and commercial properties for significantly lower than their true market value.

Be mindful of the fact that if you plan on buying off-market, you will need to consider how you intend to pay for the property ahead of time. At an auction, for example, full payment needs to be made no later than four weeks after the sale date. Unless you plan on purchasing the property outright with your own money, discuss bridging loans with an independent broker and consider arranging pre-approval before bidding on a property at auction.


Comments

comments

Scoopearth.com