Flipping a property is something that so many people have a desire to do, in fact, data shows that searches for ‘property flipping’ in 2023 were up 29 per cent compared to 2022.
But when it’s such a big investment, knowing where to start and how to go about it can often be a daunting thought that stops many people taking the plunge.
Abi Hookway, property trainer at Touchstone Education, shares her top five tips when it comes to flipping a property and ensuring you achieve maximum return on your investment.
1. Aim to purchase at a price 20 per cent below average market value - “Clearly when it comes to flipping a property, the number one consideration needs to be your purchase price. You need to ensure that there’s enough scope to not only add value but ensure you’re leaving yourself enough of a margin to make it worthwhile. Whilst some want to do this as a hobby in addition to their salaried job, for others it’s in replacement of that, so in this instance, time is money! This needs to be factored in to ensure that your ‘wage’ so to speak, is covered by the eventual return. ALWAYS factor in a contingency as part of your budgets – if it’s a large scale property or one in need of a lot of work, nine times out of ten, there’s probably going to be something that crops up along the way.
“Whilst each property flip is different and requires a different level of work and renovation, as a general rule of thumb, I’d recommend that you need to secure a property approximately 20 per cent below the market value of an equivalent property in that area. Negotiation is always key – if you don’t ask, you don’t get!
“Dependent on the current status of the property market, getting a great deal on a property can be difficult – the market moves quick when gems come up, so you need to make sure you’re in a position to move at the same rate and you’re seen to be an attractive buyer. If there’s competition for the property, at least you can put your best foot forward to ensure that your offer is the one they opt for if others are on the table.
“If you’re in the market for a property flipping project, make sure you have a priority location that you know inside out and you are armed with the following information: What is the average market value? How quickly is the market moving in this area? What is the main target audience for buyers in this area? What are they looking for in a property? What level of work are you comfortable doing? …and… If you’re not able to do the work yourself, do you have a trusty black book of contacts in the area that can support you in any of the work you need to complete – contacts are currency in this business
1. Opt for an open plan kitchen diner – it’ll add 15% value to your end price - “Whilst not all property layouts or buildings will allow it, an open plan kitchen-diner / family room can add up to 15 per cent value to your end price. When it comes to flipping a property, you need to understand who that end user / purchaser will be, how they live and their habits. There’s been a real shift to open plan living with people looking for social spaces which allows them to either host or just spend more time with their families and friends. This has been particularly spurred on post-Covid, and should be reflected where possible.”
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1. Consider using an interior designer - “So often, people who go about flipping properties will go with a completely neutral colour palette, sticking to whites and greys throughout. But I am a real believer that whilst it comes with an additional cost, people should consider using an interior designer. Whether you’re flipping the property to rent or sell, again, consider your end user. People want to walk into a property and be able to see themselves there, and ultimately, move straight in! If you can create a space that feels warm and welcoming, it’s going to support with not only the final market value, but also the speed at which the property will be snapped up.”
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1. Maximise the number of bathrooms and / or en-suites - “Most older houses only have one bathroom and rarely have en-suites, so incorporating more of these can really set a house apart from others on the market. With modern living, home buyers are looking for convenience, and the last thing they want is multiple people competing for the same bathroom in the morning whilst they’re all trying to get out the door to work or school! Adding bathrooms or en-suites for added privacy can really make a difference and add a great deal to the end value. You often find people will filter their search online for a minimum number of bathrooms too, so this helps to ensure your property is seen by as many eyes as possible when you’re ready to sell.”
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1. Stage the property for the final sale - “For anyone who’s seen Netflix’s Selling Sunset, you’re probably aware of the term ‘staging’. For anyone who hasn’t, staging is ultimately using a furniture company to fit out the house and imagine it as though it was fit for moving in. This can be a really great way to show prospective buyers how they can utilise the space, bringing it to life and helping them to imagine themselves there. It also allows you to get great pictures for the property brochure / listing, which will hugely impact the number of interested buyers when it comes to the sale. This can be relatively cost effective too! It can cost up to £1,200 for six weeks, but it’s well worth it to maximise the end price. It also means if you’re a one-off property flipper, you don’t need to purchase and sell any furniture, or be left with nowhere to store it when it comes to selling!”
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