Property Trading may also be referred to as house flipping. Flipping houses will usually involve purchasing a property at a low price, investing in renovations and selling it for a significant profit. This article will look at the pros & cons of property trading in the uk.
One of the key benefits of flipping houses is that you can gain higher profits more quickly. This is particularly true if there’s significant demand on the market and houses are selling quickly, while rising in value.
Trading properties can also provide higher levels of liquidity. Since you gain profits quickly when you sell the homes, you will be immediately freeing up capital. You can inject this capital into a variety of other investments or cover building expenses.
Flipping houses provides more control over your investments too. You will be able to decide when you want to buy or sell properties. This can be determined by the market at any given time and that’s why you should always use the services of a property consultancy to make a decision like this.
What are the Disadvantages of Property Trading in the UK?
A key issue with flipping houses is that it will always result in higher transaction costs. This includes:
- Conveyancing fees
- Estate agent fees
- Stamp duty
All these costs will put limits on your profit potential and they will need to be factored into your budget.
Trading property can also be highly competitive. That means that it can be difficult to purchase the right property at the right price. To avoid issues here, you should ensure that you are pre-approved for loans and ready to buy as soon as an opportunity presents itself.
Furthermore, house flipping can mean a higher level of risk. Property values can change quickly and there can be adjustments to the market that you aren’t prepared for. If this stops you from selling at the right time, it could result in a significant loss. Multiple losses will quickly cause your portfolio to become unstable.
Is Property Trading The Best Route For You?
So is property trading for you? The answer depends on your situation and your current objectives as well as your long-term goals. You need to research the market carefully before making this choice and explore the latest industry news.
If you’re looking for more information on how you can break into the UK property market, don’t hesitate to get in touch. John Howard is an expert property developer with years of experience on the market. He can help you regardless of whether you are planning a long-term investment or you are interested in the rapid process of trading properties.