23rd August 2025

How to make money buying and selling property

Flipping houses is a popular strategy for those looking to invest their money in property, or just for those who enjoy the challenge of renovation/remodelling. However, if you’re solely setting out to make money, this option may not be for the risk adverse. Whilst flipping properties can come with lucrative rewards, there are also substantial risks at play. The process requires a lot of time, effort, and readily-available funding, so it shouldn’t be thought of as making a few quick fixes and selling for a profit. You need to have a good understanding of the property market and a good contingency plan to really make it work. 

Whether you’re a first-time flipper or are already experienced in the art, in this guide, we’ll talk you through the best practices when it comes to buying and selling renovation properties to better your chances of maximising profit. 

How does flipping houses work?

House flipping is sometimes known as ‘buy to sell’, because this typically is done in a relatively short period of time. It involves buying a house in need of work at a low price and then reselling once the work is complete. 

This is a popular strategy for investors because they usually have the funds available to buy a property in need of a lot of work for a low price, whilst continuing to live in their own home, and selling once the work is complete. Typically, experienced investors will have the means available to pay in cash because many of these properties will be considered unmortgageable due to various factors such as not having a working kitchen, or having structural problems that mortgage providers would consider too much of a risk.

Some people however, might choose to buy a property that is not in need of much structural work, but rather some cosmetic upgrades, and live in it themselves whilst the works are completed in order to save on costs. 

The common objective, however, is to spend as little as possible on the house but sell it for the highest return on investment, within a quick time frame.

What are the advantages of flipping a property?

The most obvious advantage of flipping a property is that it presents an opportunity for profit potential. Well-done flips in trending areas can offer investors the opportunity to yield a huge return in one lump sum, and the return is often much higher than what would be seen in traditional forms of investment. 

Aside from profit, there are other benefits to consider. One such benefit includes opportunities for creative interior design. As mentioned earlier, some people choose to renovate as it can be an enjoyable project, and not one that is solely focused on turning a profit. If you want to stray away from the usual magnolias and greys, buying a property to flip can give you the chance to experiment with colours, textures, patterns, and facades. It is freedom to experiment with design and space, which can be a rewarding feat in itself. 

One other positive is that you’ll have flexibility in your investment strategy. House flipping means that investors can choose a property that fits their budget, time constraints and risk appetite. Depending on the property and your financial circumstances, you’ll also have the chance to decide whether you wish to take out a mortgage or other loan for the costs, or whether you want to fund the project using cash only. For example, you may wish to choose a property that only needs updating in terms of aesthetics, which you can cover with your savings, or you may choose a property that needs the full works and would require further investment planning. 

It’s also worth noting that house flipping can be adaptable to volatile or changing market conditions. If the market slows, investors can rent it out for additional income until the buying market picks back up again. Ultimately this is a method that can be adjusted to meet the goals of the investor. 

What are the challenges of property flipping? 

Of course, flipping a property is not without risk. This is an investment strategy that presents its own unique set of challenges. Just as financial gain is a possibility, the potential of financial loss is something that needs to be considered.

House prices can be unpredictable, and the market can be volatile. Properties that seem like a sure-fire way to make a profit can fail to sell at the price you want or expect, even if you buy in a sought-after area and implement top of the range renovations. Factors you’ll need to consider are interest rate changes, economic changes, and market slowdowns as these can all impact the property value and your profit margins. 

The costs of renovating a property can also quickly add up and can exceed your budget if you have unexpected delays or expenses. For example, you may start one job and find another that needs doing. As such, you’ll need a clear plan for your finances which includes a significant contingency budget to cover these additional costs. 

In addition, you’ll also likely face regulatory challenges and legal considerations, it is essential that you adhere to these rules as you could be liable if something goes wrong. For example, if you need to undertake gas or electric works, make sure you hire a qualified and reputable tradesman who will complete the relevant paperwork for you. Depending on what you’re doing to the property, you may need to get a structural engineer or approved planning permissions from the local council. The latter is especially important if your chosen property is a listed building or in a conservation area. Investors need to be aware of all the legal requirements before undertaking work. 

The most important thing to consider is that flipping is not an easy route to take. It requires lots of time and effort, and if you lose interest or commitment half way through, you’ll face a loss. You’ll need to find the time to coordinate contractors, keep track of your budget and meet any deadlines you set for yourself.

Step-by-step guide to flipping a property for profit

With all of those points considered, it’s now time to guide you through each step of buying to sell: 

Step 1: define your budget

The first step to buying any property is to set a budget. In this strategy however, you’ll need to factor in the costs of any renovation work and what you’re willing to spend. As such, it may not be the best option to buy the cheapest property if you can’t afford to do things such as rewiring or replacing the roof. In your budget, include the price you want to pay for the property, renovation estimates, legal fees (for estate agent or auction fees, lawyer fees, and stamp duty if applicable) and a contingency budget. Allow for any other fees you’ll incur too such as council tax that will need to be paid.

Step 2: research properties

Once your budget is defined, you can start to look for the perfect property. You should aim to buy a property under its full market value, something that is often possible when buying by auction or in an off-market sale. You’ll need to research the area of the property, as well as the street. As they say, it’s often a good strategy to buy the worst house on the best street and check what the trends are for selling in the short term. Are the prices there rising or falling? 

Think about any developments or other factors that will affect the cost when it comes to selling, such as road connections or housing developments, that might affect house prices. When considering local price trends also look at whether there are any other factors which might affect local property prices negatively. 

At SDL Property Auctions, you can easily browse through our renovation properties for sale and narrow down your search to meet your requirements.

Step 3: arrange finances and start renovations

Once you’ve found your perfect project, make an offer and secure the property. This is the time to get your finances in order. You should start by getting contractors to give you quotes for the work that needs to be done so you can adjust your budget and timeframes accordingly.

Step 4: sell and calculate profits

Calculating your profits after flipping a house involves subtracting your total costs from the amount you sell the property for. Some of the things to consider when calculating your profits are adding up your total costs, subtracting your total costs from the amount you sell the property for, calculating your net profit, and calculating your return on investment. It’s also important to keep accurate records of all your costs and receipts throughout the flipping process so that you can accurately calculate your profits and return on investment. 

You can use this simple two-step calculation to calculate your profit, or use estimates in the formula if you want to forecast a prediction: 

Step 1 – calculate your total investment costs and total profits

• Total investment costs = buying price + renovation costs + selling costs
• Total profits = sold price – total investment costs

Step 2 – use the above figures in the formula below to calculate ROI

• ROI = (total profits / total investment costs) x 100

Example calculation: For example, if you buy a property for £60,000, spend £50,000 on renovations, and selling costs come to £5,000, and then sell your property for £150,000, your ROI calculations will look like this:

• Total investment costs = £60,000 + £50,000 + £5,000 = £115,000
• Total profits = £150,000 – £115,000 = £35,000
• ROI = (£35,000 / £115,000) x 100 = 30.4%

So, overall, your return on investment for this buy-to-sell property would be 30.4%.

When is the best time to flip a house?

It can be hard to time the market, but, in general, house flipping works best when there are lots of buyers and few sellers, and when prices are rising. With that being said, it can still work in less favourable markets depending on location and circumstance, you just need to remain open to the fact you may make a smaller profit than hoped, or cannot resell it at a higher price than what you’ve spent on it. 

Ready to start on your next project or sell your flipped property?

Whether you’re just starting out in the house flipping business or whether you’re an expert, we can help you find the perfect property for your next endeavor, as well as sell your current project quickly and efficiently. Browse through our renovation properties for sale or find out more about selling by auction.