Property development, or ‘house flipping’ as it is colloquially known, is a vocation that has become increasingly popular in recent years. Simply put, it is the purchase and renovation of property for the purpose of profit. In the housing boom of the late 1990s and early 2000s, it was a fast and effective way for families to climb the property ladder; today, the practice spans from casual to full-time vocation.
While the concept of house flipping is extremely simple – and the practice of renovating for profit might seem more like fun than work – there are numerous different elements to the property development process you should bear in mind before you begin.
Of course, the property market itself is a key aspect to track as you start your journey (especially as property values seem set to fall in the coming months), but it is taken as read that you are already following your market potential with interest. So, what are some essential things you should think about before embarking on a house-flipping endeavour or career?
Money
Firstly, and perhaps most evidently, any property development project will need a significant injection of money. For starters, the initial purchase of the property (particularly if it is in addition to your primary home) is a massive financial outlay. But, even after setting aside the cost of the property, the cost of renovation can be higher than you might expect.
One of the main costs relating to renovation is in fact labour, as man-hours rightfully cost according to the skills of the teams you hire. These costs can be cut by doing things DIY, but are partially replaced by the cost of tools and equipment. Not only will you need the right power tools for a given job, but also the right safety equipment to keep yourself safe while working on the property.
Time
Next up, time is a precious resource – and house-flipping can be an extremely time-consuming process. Between translating designs to tangible finished products and waiting on planning permission for larger constructions, property development can often feel like a waiting game. As such, patience is very much a virtue in this vocation.
Knowledge
While renovation work forms the bulk of effort in any house-flip project, there are many more corners to the process that do not directly relate to the property’s physical condition. In trading with the property market, you will need to be au fait with the legal elements to property purchasing; likewise, with renovation and construction work, you will need to be across the legislative requirements placed upon you.
Network
Lastly, building a strong network around your house-flipping endeavours is key to making them as profitable as possible. You might benefit from building a strong relationship with a local estate agent, in order to grow your chances of finding a buyer. Building a working relationship with trade professionals could help you fast-track certain renovation works, and shorten the time scale for each successive project.
