Can House Flipping Be The Answer To Fund You In Retirement?
by Ritchie Mehta (03 August 2009)
While the huge fall in property prices in the UK market has created no end of headaches for much of the country, it may also present an opportunity for saavy investment through "house flipping".
Opportunities will always present themselves in the face of adversity and the UK property market is no exception. We are all painfully reminded of the property price falls that have taken place over the last year, however there are signs that things may be picking up. According to Rightmove, house prices in the UK rose by 0.6% in July, suggesting that the market may finally be beginning to bottom out. Is this a good time for house flipping?
House flipping is essentially when you buy a property at a discounted value and then turn it around and re-sell it for a profit. The profit is generated either through house price appreciations or by the buyers adding value in the house through renovations and capital improvements. The popularity of house flipping has grown over the last decade with the advent of television shows like Property Ladder and Location, Location, Location.
The current economic climate may well present opportunities for house flipping as unemployment rates increase leaving more people unable to keep up with their financial commitments. According to the Office of National Statistics, unemployment has reached 2.3 million in the UK and is set to grow. This has a knock on effect as many have to sell their homes, in what is termed a distressed sale, in order to re-pay a lender or other debts. As unfortunate as this situation is, it poses an opportunity for flippers to buy a property at a substantial discount and re-sell it for a profit.
With some analysts predicting the British economy to rise next year, now could well be a good time to consider the opportunities flipping presents. The profits from this type of activity can be considerable and help to fund one’s retirement.