Property Flipping
Buy below market value, add value, sell for profit. The fastest-cycle strategy.
What is it?
A flip is a short-cycle investment: you buy a property at a discount (typically distressed, auction, or off-market), refurbish or reposition it, and sell it at a profit. Unlike BRRR, you don't hold the property — the income is from the capital gain on sale, not rental income.
Who is it for?
Flipping suits investors with strong deal-sourcing skills, experience managing refurbishments, and access to purchase capital without needing a BTL mortgage. It's an active, project-based strategy — more like a business than passive investment.
Pros
- ✓Faster returns than BTL — profit realised in months rather than years
- ✓No ongoing landlord obligations once the property is sold
- ✓Can generate large lump-sum profits to fund future acquisitions
- ✓Skills transfer well — experience in one area compounds quickly
Cons
- ✗Capital gains tax applies to profits (24% for higher-rate taxpayers)
- ✗SDLT paid on purchase but not recovered if sold quickly
- ✗Requires precise cost control — budget overruns eat profit fast
- ✗Market timing risk — if the market moves against you during the project, the numbers change
- ✗HMRC may class serial flipping as a trade, making profits subject to income tax rather than CGT
Numbers that matter
The margin is made at purchase. Without a meaningful discount, there's no room for costs.
Purchase + SDLT + refurb + finance + selling costs should not exceed 80% of After Repair Value.
Below £20k the time and risk rarely justify it. Aim for 15%+ return on total capital invested.
Comparable sold listings tell you how liquid the end market is — crucial for exit timing.
Common pitfalls
- !Buying in slow-moving markets where sold comparables are old and scarce
- !Spending on improvements buyers won't pay a premium for (e.g., premium kitchen in a budget area)
- !Underestimating selling costs — agents' fees (1–2%) + legal + EWS1/cladding searches
- !Flipping in your own name and being hit with income tax if HMRC deems it a trade
- !Not having a buy-to-let fallback plan if the property doesn't sell at target price
UK-specific notes
- SDLT applies at purchase — you cannot claim it back if you sell within 3 years
- CGT on residential property gain: 18% (basic rate) or 24% (higher rate) — factor this in from day one
- EPC certificate required before marketing for sale
- Cladding and EWS1 certificates are increasingly required for flats in buildings above 11m
- Anti-money laundering checks at purchase and sale — be prepared for source-of-funds questions
How PropScout helps
PropScout scores every listing on Flip potential — comparing asking price to AVM, estimating refurb cost ranges, projecting net profit after SDLT and CGT, and checking local days-on-market data. Sort the deal feed by Flip score to see which properties have the most potential for a quick-turnaround profit.
See FLIP deals →PropScout provides educational content only. Nothing here constitutes financial, tax, or legal advice. Always consult a qualified professional before making investment decisions.