House flipping - experiences?

[RebeccaStacey]

We have just sold my late father's house, my partner wants to try house flipping with the proceeds of the sale.

We've renovated houses before but while we were living in them. A lot of the work we have had experience doing before and will probably do ourselves (plumbing, plastering, brickwork, etc).

We've had a consultation with an accountant but he didn't go into much detail and was quite vague when we asked questions. I've emailed him follow up questions but have had no response.

We'd set up as a trade but we're still unclear of the tax afterwards and how we would pay ourselves. Do any one have experience of this?

Thank you

Not sure this helps but aren’t you liable to pay CGT if it’s not your primary residence? I would have thought that makes it much harder to turn any sort of profit.

Just watch a few episodes of Homes Under The Hammer and you’ll be fine

Apparently not if we set up as a trade but there will be more income tax.

I've asked the accountant about this but wasn't sure if anyone here has experience of it

Crikey OP I think you’re incredibly brave to even consider this in the current economic climate. I think what with more punitive tax and the inevitable unforeseen costs with developing houses, and allowing for putting your capital at risk (you could just stick it In premium bonds or something) not many people really make much money out of property. That is UNLESS house prices are moving in an upwards direction. In other words, most of the gains, most of the time, are because house prices just go up over the time.

I personally think at some point in say the next 12 months house prices (in at least some sectors) will go down. So I really wouldn’t be about to start property development that’s for sure.

Got to say I agree with Daisy.

I’ve sold a few at a profit but the direction of travel re prices has always been on my side. No way I’d consider it now. If you really want to do this I’d squirrel away the money for 12-18 months once the (huge) economic impact of cv19 and Brexit has become apparently. I think prices will be dropping very soon, if they aren’t already.

Yeah, another one that wouldn't be attempting this at this point

My cousin bought the house 2 doors from me, paid £80k and spent maybe £30k renovating, he’s a plumber so knows lots of other trades. It needed new boiler and heating, rewiring, new windows doors, kitchen and bathroom plus fully replastering and a new garage door. He rents it out for £600 a month and it’s worth maybe £135k, It’s on a far smaller plot than ours with a tiny triangular back garden.
He hasn’t bothered doing another, whole lot of work for £20k taxable profit.

I don't know how much money you'll have re proceeds of sale, but you'd probably make more profit maxing out both your investment ISA allowances (think it's £20k each per year, so you might need to drip it over two or more years) and holding the money for five years in low cost tracker funds that you keep an eye on.

Is now the right time? What area/town would you be doing it in and is their reason to think prices will rise much there over the next few years?

Also - presumably it is your inheritance money? Is your partner putting equal amounts in? What would happen if you split up or one of you died? You need to protect yourself there

Now? Right now? Are you sure that now is the right time for this sort of thing?