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House flipping is an investment strategy that involves:

1. Buying a property at a discount

2. Renovating and enhancing it

3. Selling t at a higher but very competitive price

Now widespread in Italy as well, this is a type of real estate transaction based on the U.S. “buy and flip” model. It is no coincidence that the verb “to flip” means “to turn over”: in our case, to change the way a home looks in order to make the highest profit in the shortest time.

But before delving into these three steps, let’s understand why real estate flipping has become a worthwhile investment.

ROI Immobiliare

Why invest in house flipping?

In Italy, “real estate” has always been perceived as a safe investment. This is partly true in the sense that any property you own may go up in value over time and be sold at a higher price. However, the market turmoil following 2008 has taught us that this is not always the case.

Simply hoping that a property will increase in value over the years does not lead to a sure profit. By following this old belief many inexperienced people have seen their property investments fail, and not always because of major events. All it takes is a change in the city’s land-use plan, a deteriorating neighbourhood or a depopulating settlement to lead to the misfortune of a property.

With real estate flipping, the opportunities to earn money by buying and selling real estate become immediate and concrete. Here too, the time factor is crucial, but in the opposite sense: the speed of transactions is essential for a profitable investment.

Investing in house flipping has at least three very important advantages over other investments:

  1. Getting a good profit margin

    They say that buying is when you make a deal, especially if your intention is to make a profit. In order to have a good ROI, the purchase price should tend to be 30% lower than the market value. Considering that you will have to renovate the property, only by buying at a really good price will you get a good return on your investment.

  2. Making a profit in a short time

    We used to say that the speed of transactions leads to an equally fast gain. Here again, the choice of the property is crucial. Time-consuming or uncertain renovations are not good for your business, as they delay or erode your profit. Instead, an action plan with defined time and budget gives you a reliable horizon for safe and quick gains.

  3. Reinvesting the proceeds into similar transaction

    Getting a quick return allows you to reinvest a portion of the margin in other house flipping transactions. In this way, you can carry out several projects in a short time, even in the same year or at the same time. You will therefore have a higher overall profit and more investment possibilities.

As you can see, for house flipping to be lucrative, you must not improvise. You need: to make the right purchase; a detailed profit and loss account of the transaction; a renovation without surprises; and the certainty of selling the property quickly. Without trusted guidance, it is easy to underestimate certain aspects that can pulverise your earnings. If you rely on house flipping professionals, on the other hand, you will be safely on your way to making a quick and high-yielding profit. For many years, we at MA Living have been involved in house flipping, making informed, high-yield investments.

>> Do you want to earn money through real estate flipping? Contact us!

Factors to consider when undertaking a house flipping transaction

As mentioned, buying, renovating and selling are the steps to take to invest in house flipping. To conclude a good deal, each of these steps must be handled with care. Let’s see how

Buying a property

In addition to the negotiation, the choice of property is crucial. The properties most suitable for house flipping are buildings in need of being fixed up, often dilapidated or old. Generally speaking, they can come from auctions, banks, bankruptcies, or from owners who have to sell a shabby property they do not want to spend money on to fix up. For example, we prefer only properties in the free market because they guarantee faster and safer transactions than other sources.

Giving a building a new lease on life creates an attractive offer, which has a positive impact on the community. However, one has to assess the context and know the market to find the ‘real deal’. You should maintain a neutral point of view, focused on the potentials of the building. Remember that every little choice affects your earning potential! Properties located in areas that are soon to be redeveloped, close to services or places of value, for example, constitute an interesting parterre.

If the home is located in a block of flats, the condition of the entire building must be assessed, and the inclination or planning of ordinary and extraordinary interventions must be considered. These factors also affect the chances of sale and your actual profit in the end.

As you can see, there are many factors to consider, which is why it is advisable to invest with experienced professionals. We are very precise in our choice of property, focusing only on vibrant areas and homes capable of giving a high yield.

Renovating a property

Since your profit lies in the difference between the sale price and the purchase and renovation costs, you need to calculate your budget well. It is important to choose interventions carefully and have a clear work plan with a quick and defined timeframe right from the start. Depending on the property, this can range from a renovation of the rooms to very complex division of the property.

In addition to the basic installations that need to be brought up to standard, it is important that the property meets the latest energy efficiency requirements. The renovation must also take into account modern taste and efficient organisation of space. And remember: speed should never be at the expense of the quality of the materials or the workmanship.

That is why our company has a team of renovation professionals who can quickly change the way a property looks. We take care of the details and complete each job with quality in mind.

Selling a property

The selling phase should also be short, and if the purchase and renovation have been carefully looked after, most of the work is done! A refurbished property in a promising context is extremely attractive. However, one has to consider the competition from the same type of property or property in the same area.

Various strategies exist to facilitate the sale, such as virtual home staging. Our detailed and realistic renderings show the customer the potential of the property in terms of furnishing and organisation of space and immediately begin to make him dream! Not surprisingly, our company makes extensive use of digital renderings because they are very effective in online sales and generally speed up the operation.

Once the property is sold, you can collect your proceeds. Remember that you will have to subtract the tax percentage calculated on the capital gain, which is normally 26%. In the case of a sale that is unrelated to your occupation, you can ask the notary to apply the 20% substitute rate. Taxes due and notary fees are in fact all budget items to be considered from the beginning, in order to calculate your net income.

If you are an individual or a company interested in investing in real estate flipping, we guarantee you an ROI of 15-20% per real estate transaction, with an average annual percentage of 30% for homes. A guaranteed profit that leaves nothing to chance and minimises all risks.

>> Call us to start investing safely in real estate flipping