‘Flipping’ houses can now be a more lucrative strategy for investors than renting them out, according to property experts and sibling TV presenting duo Scarlette and Stuart Douglas.
Their show, Flipping Fast, is currently airing on Channel 4 and they tell LandlordZONE how they’ve reduced their property portfolio to concentrate on buying, renovating and selling.
The show pits six teams against each other to do up a series of budget homes in the North of England, the winner being the one who makes the most profit and who will then bag a £100,000 prize at the end of the series.
“When the government changed the tax law we quickly realised that as a landlord, mortgage costs could no longer be deducted from rental income,” say co-presenters Scarlette & Stuart, who front the show alongside George Clarke.
Legislation has made it harder to be a successful property investor, but they add that their success is also down to hard graft.
“If you’re lazy and complacent you will fail. We would often see unprofessional property investors with that type of attitude and believe the recent changes have reduced the number.”
The siblings warn that without thorough research into the demographic of potential buyers in their chosen location, investors could also come a cropper.
Ceiling prices
“You have to buy at the right price and to do this you need to know ceiling prices in your chosen location.
“Once you’ve done that, work backwards as to how much you should spend on the renovation to make a healthy profit. If you overspend on the purchase price and subsequent renovations, the chance of making a positive return on your investment is greatly reduced,” they advise.
“And if you’re flipping and purchasing with a mortgage, try to get one that doesn’t have an early redemption fee.”
Both suggest that investors should be 100% committed to giving themselves the best chance of success.
“Do as much research as possible, build relationships with estate agents and auctioneers, devise clear strategies and budget accordingly. Take all emotion out of any decision process and think with your head, not your heart.”
Join the LandlordZONE forum on flipping properties.
Credit: Source link
