The Ultimate Guide to Successfully Flipping Houses in the UK in 2024

House flipping in the UK looks like a pretty good way of making money – buy a ‘fixer-upper’ type of property that needs a little TLC, spend a little time repairing it, and then sell it for a lot more than you paid for it. House flipping can also be your stepping stone to the world of property investment, or the first rung on the property ladder. Whether you are a seasoned pro at property flipping, or a beginner looking to know more, I can help – read on to find out more.

What Is House Flipping?

Flipping a house is when you buy a property, and then sell it for a higher price, usually by doing some renovation work on it to increase the value. Most property owners hope to make a profit whenever they sell that property, usually to upgrade their homes. House flippers do this over and over again to earn a living.

Can You Make Money By Flipping Houses in UK?

A study of 1000 investors found that over 60% of flipped properties in the UK made £10-75k in profit. So yes, you can make money by flipping houses. The key to making a decent profit is to do plenty of research before diving into property flipping.

FAQ: What is the BRRR method?

BRRR stands for Buy, Refurbish, (Rent), Refinance, Repeat, the strategy you should follow to get the most out of your house flip. The renting part is optional but it could be a good way of making some extra profit on our property. You could rent it out while the house is on the market, and even sell it as a going concern, so the tenants could stay put after the property is sold.

How To Successfully Flip A House?

Find out how to flip a house and make a decent profit by following my these steps to successfully flip a house.

Start with Research

It’s important to do your homework and discover all the ins and outs of house flipping in the UK. Find out about the intricacies of the property market in your targeted area and seek advice from estate agents and other professionals in the industry. Learning as much as possible will clue you in on what to look for in an ideal property to flip, plus all legal considerations and other important factors.

Look For Ideal Properties

Explore available properties to find those suitable for flipping. Avoid perfect ‘showhome’ properties, as they may not sell for profit, and steer clear of complete teardowns due to the high renovation costs. Look into sales of similar properties in the area to estimate potential profits. A property auction can be a great place to find some good deals.

Secure Funding

Securing funds for flipping houses can be challenging. Mortgage lenders may hesitate to provide loans for extensive renovations. Consider a bridging loan secured against your property, repayable over 12-24 months. However, these loans can be risky, and you could lose your property if not repaid. Also, the monthly interest rates on bridging loans can be high as they are charged monthly.

Get a Property Valuation or Survey

This can give you a realistic idea of how much the property is worth, and you may need this to be done anyway if you are looking to secure a bridging loan. Surveys can indicate how much refurbishment the property needs before it can be flipped. Bear this in mind when working out your renovation budget and potential profits.

Make Your Offer

Once you have chosen your dream house for flipping, put in an offer. Bear in mind that other flippers may have their eye on the same property as you, so make sure you are in a position to make a tempting enough offer and can move quickly.

Stick To Your Budget

You will have to invest some money in renovating the property, so make sure you have some room in your budget for this. A valuation and survey beforehand should give you an idea of how much you need to spend to make your investment worthwhile. Renovations can often go over budget and take longer than you expect, so factor in some contingency money.

Stick To Your Budget

Find Reliable Contractors

A big part of house flipping is the renovation work. Unless you are a builder, carpenter, electrician, landscaper and plumber all rolled into one, you will need to find tradespeople to complete these jobs for you. Having reliable contractors that will do a good job in a short space of time, for a reasonable amount of money, is the secret to a profitable property flip.

Do Some of the Work Yourself

It’s time to roll up your sleeves! You can cut the costs of flipping a house if you do some of the work yourself. You might not be able to do specialist work like plumbing or electrical jobs, but every task you undertake means more profit for you.

Stage The Property

Staging is a way of making the property look as appealing as possible for your listing photos and potential viewers. You can do this yourself by adding some furniture if the house is empty, or removing personal items if someone lives in the property. Adding some tasteful furniture and decor like lamps, light fittings, and rugs, and making sure the outside of the property is clean, well-kept and inviting can increase the value of the property by 10%.

List Your Property For Sale

Now is the time to get that property on the market! Ideally, you will be able to sell it quickly and get that return on your investment, ready to invest right back into your next house flip.

FAQ: What Is The 70% Rule In House Flipping?

The 70% rule says that potential investors should spend no more than 70% of a property’s potential after-repair value, or ARV, on the initial purchase. Let’s say you’re considering flipping a house. You estimate that the renovation costs will be £50,000. Suppose similar renovated properties in the neighbourhood are selling for around £300,000. The 70% rule says you should spend no more than £210,000 on the property in the first place.

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Potential Risks Of Flipping Property

As with all investment strategies, there are some pros and cons to flipping houses that you should know about.

Pro: Scalability

You can start small but quickly progress with house flipping using the BRRR method. This allows you to expand your property portfolio and increase your overall returns over time. Scaling up a flipping business by acquiring multiple properties can provide diversification across different locations, property types, and market segments. This can help you to spread the risk and mitigate the impact of market fluctuations on individual investments.

Pro: Quick Turnaround

Flipping houses can be completed within just a few months, giving you profits of upwards of £10k (GBP) if you are successful. The longer a property sits unsold, the higher the holding costs such as loan repayments, insurance, and maintenance expenses increase. A quick turnaround time minimises these costs, meaning more profits for you.

Pro: Flexibility

House flippers have more flexibility in choosing their exit strategies. You can sell properties for a quick profit, or if the selling market is slow, hold onto them for rental income or long-term capital appreciation.