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Flipping property: can you still make a profit? – 8th May 2022

Imagine that Love Island met Homes Under the Hammer and had a reality show offspring, and you’ll get a sense of Channel 4’s property programme The Great House Giveaway. The premise is simple: two strangers buy a house and do it up with a view to selling it quickly for a profit — otherwise known as “flipping”.

Dean Esnard, a director at the mortgage broker Magni Finance, says: “Being able to successfully flip a property will come down to the skill and expertise of the investor, not the interest rate. With a bridging loan the interest rate available will depend on whether the work required is simply cosmetic or if structural work — classed as a “heavy refurb” — is required, and how much of a deposit is put down. Of course, there is a higher risk in this strategy, but as with any investment, the greater the risk, the greater the reward.”

The tax situation is also worth considering. Letting residential property to tenants has a different tax treatment than buying a property to refurbish and sell; the former is classed as property investment, while the latter is classed as property trading.

Click here to read the full article.

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