Property flipping is the art of buying a property before rapidly selling it for profit. This profit can be achieved by identifying undervalued properties, or by carrying out home improvements before making your sale.
It’s a thrilling business opportunity that’s best for people with the cash available to make large purchases and the knowledge of properties needed to identify profitable opportunities.
But is it worth starting a house-flipping business?
Below, we explore the pros and cons.
Cons of flipping houses
One of the main cons is that a house flipping business in the UK requires plenty of capital to get off the ground. You need the starting money to be able to purchase a property and hold it for the time it takes to flip it on for profit. If you lack this capital, holding costs can quickly overwhelm you.
There are also often hidden costs involved with house flipping. You might purchase a seemingly quality property to flip on, but you could suddenly find hidden structural problems that need renovating. The stress of sorting out these problems on the fly isn’t for everyone.
The tax costs associated with house flipping might be off-putting too. Any profit you obtain from selling a property might be subject to capital gains tax. Plus, if property taxes rise in your locality suddenly, you may find it more difficult to sell one of your properties.
Pros of flipping houses
There are plenty of benefits to running a house flipping business though.
For a start, if executed correctly, your property deals can land you a quick, substantial profit. This can provide you with a quality salary, compensating you for the work put into the deal. What’s more, if you’re able to fix up properties yourself, you’ll be able to make a larger profit as you’ll avoid construction costs. You’ll simply need to buy the appropriate personal protective equipment and you’ll be all set.
On top of this, the more deals you complete, the more you’ll learn about real estate. By developing this expertise your business can go from strength to strength over the years.
Finally, it’s an exciting project that you can take a lot of personal pride in. Identifying an undervalued property before fixing it up can be hugely fulfilling. You’ll be using creative, problem-solving solutions to create people’s dream homes. If this type of project motivates you, it could well be the right career for you.
A house flipping business can give you the opportunity to make a significant profit every year. And by weighing up the pros and cons above, you can see whether this type of business would signal a good career move for you.
The post How to flip houses in the UK – the pros and cons appeared first on Addicted to Property.