Buying property continues to be a popular form of investment for many people, and many buy to rent their properties. But what if you want to buy to flip? Here, we go through some of the factors you need to consider if you are thinking of buying a property to renovate and sell on:
How are you going to buy?
Apart from deciding how you are going to finance your purchase, you need to decide whether to purchase the property:
– as an individual
– as a joint owner or via a partnership (often with a spouse)
– via a Ltd company
Depending on how you choose to buy, you will be liable for different levels and kinds of tax.
Top Tip: My advice is to always buy an investment property using a Ltd Company as there are more tax benefits to it. It’s a business so treat it as one.
Is Now a Good Time to Buy?
Despite the current challenges, property prices in Ireland continue to rise, while interest rates remain low. This makes it a good time to buy a property relatively cheaply and quickly sell it for a profit.
How Do You Choose a Buy-to-Flip Property?
- Buy in an area where property is consistently in demand. The most important aspect here are transportation links. Does the area have good access to roads, trains & buses. Another important feature is the proximity of good schools.
- And the most important factor when looking for a house to buy & flip is to look for what’s called a motivated seller. This is a homeowner who are looking for a quick sale which means a deal on the house is there to be had. You can in many cases make your profit on this alone BEFORE you even add value
- Choose a property that needs work—but not too much. Don’t be put off by hideous wallpaper or 1970s wallpaper; these should be replaced anyway. If the property requires major structural repair, avoid as it’ll eat your profit.
- Go for properties that could do with a facelift. Sometimes buyers can’t see past a front garden full of weeds or patchy exteriors. A new flowerbed or a paint job can work wonders.
- Avoid unique. Properties that are described as “one of a kind” can be a niche taste. You have a better chance of selling your property quickly and profitably if it appeals to the largest possible number of potential buyers.
How Much Work Should You Do to a Property Before Selling It?
As a minimum I would advise:
– New modern kitchen
– New modern bathroom
– Maybe some electrics