Is Flipping Properties Still a Profitable Strategy in 2024?

Key takeaways: 

• Know how to profit from flipping properties and how these properties work best.
• Get in-depth knowledge on how to ensure the profitability of flipping properties.

The international real estate rental market will reach $637.80 trillion in 2024.

With the rise in overall demand, one investment strategy, out of the many, has always interested the investors.

Any guesses?

Flipping properties.

According to Business Insider, searches for “property flipping” increased by 29% in 2023 compared to 2022.

But it’s 2024, so is flipping properties worth it even now?

If yes, then how can you ensure to maximise your ROI?

Let’s dive into its nitty-gritty.

How Do You Estimate Whether Flipping Will Be Profitable in 2024?

You can assess whether flipping properties will be profitable for you in 2024 using a simple formula:

Flipping Profit = Likely Selling Price − (Likely Buying Price + Likely Buying Costs + Likely Repair Costs + Likely Selling Costs)

The formula can help you estimate the possible ROI by dividing the profit by the total investment.

For example, if you buy a property for £200,000, your costs are £40,000, and then if you resell it for £280,000, your return on investment will be £40,000/£240,000 x 100 = 16.67%.

Based on your investment goal and the final ROI percentage, you can check whether flipping properties can help you achieve your financial goals.

But before you dive into the calculation, a few industry insights can assist you with making the best move in flipping properties strategy.

When Do Flipping Houses Work Best?

You might think flipping houses can work using your traditional investment approach, but that’s not always true.

Remember that the flipping properties strategy works best in hot or warm property markets.

But why?

Because there is a massive demand for buyers and fewer sellers when prices rise, you can resell at a higher price than your purchase price because of the overall rise in the market.

Flipping properties isn’t effective in cool property markets because there are fewer buyers and many sellers, which shrinks the overall property prices. 

But there’s a way out which can ensure your profitability if you purchase a house well under market value. You must be aware of the risk involved in the approach that reselling at a higher price won’t always be possible.

Apart from these insights, there are some general steps you can take to ensure profitability.

How to Ensure Profitability in Flipping Properties?

The core of ensuring successful house flipping is digging deep with your research. You must estimate likely buying and selling prices and the overall cost involved to ascertain if flipping is likely to be profitable.

1. Purchase at a low market value

Aim to buy a property at a low market price, which can help you resell at the market value. The margin can help you book your profits in the flip.

Buying below market value can be possible during a property auction or being a cash buyer. Also, you can complete the transaction if you contact the sellers who want or need to sell quickly and are willing to sell at under-market value.

2. Calculate your selling cost

Calculate important factors such as stamp duty, legal fees, and other costs such as finance charges and interest.

Also, consider any costs you may incur, such as utility costs, insurance, and possibly council tax.

3. Estimated repair and refurbishment costs

Estimate your real estate agent’s commission or fees, legal fees, and taxes like Capital Gains Tax. Also, calculate repair and refurbishment costs.

Although flipping houses doesn’t involve major work because of uncertain timescales and costs, you need to do repairs before reselling the property, like minor refurbishment or redecoration, which can easily add value to selling the property.

4. Check price trends

You must ensure that the current market value of your property is good. Check the selling price in the short term with local property prices.

UK House Price Index Data from the HM Land Registry can help you with the process and provide accurate price trends. You can also obtain opinions from local estate agents.

Keep an eye on factors that can affect local property prices. For example, if there’s a new road connection or a large employer moving, it can impact the overall property prices.

These pointers can help you make an informed decision with flipping properties and ensure you achieve your real estate investing goals.

But if you want to streamline the overall process further, you can contact professionals who can help you mitigate the risks and complexities.

How Can Pluxa Property Help You?

At Pluxa Property, we are experts in property investment, specialising in the Birmingham area and across the UK. 

Our services cater to diverse investment needs, including flipping properties, short-let serviced accommodation, buy-to-serviced accommodation, overseas investment opportunities, BRRR investment, and newly built apartments.

We pride ourselves on offering top-quality property services to achieve high rental yields and capital appreciation for our clients. 

Whether you’re a first-time buyer or looking to expand your portfolio, our experienced team is dedicated to finding the right property deal for you.

So, what’s making you wait?

Get in touch with us now and achieve your investment goals.

FAQs

1. Where is the best place to buy a property to flip in the UK?

The best places are often cities with strong economic growth, like Manchester, Birmingham, and parts of London, or areas undergoing regeneration. Look for regions with high housing demand and potential for property value appreciation.

2. How much does it cost to flip a house in the UK?

The overall cost can vary based on purchase price, renovation costs (typically 10% to 30% of purchase price), legal fees, stamp duty, and selling costs. Total costs can range significantly based on property condition and location.