Flipping property Vs. Renting property
Many think that the only way of making money through property is to “flip” - the practice of buying a property, improving it, and then selling it on at a profit. But as Simon discusses in this week’s show, there might be a better alternative, depending on your outlook. KEY TAKEAWAYS If you flip a property in your name, the profits made are subject to income tax. If you rent it out first, and then sell it in the future, you pay capital gains tax, which is markedly different. The three main factors that will affect your profits when flipping a property are: How much did you buy the property for in the first place? How much have you spent on refurbishment? What is the end value of the property when you come to sell? When working out your figures, you should always aim to make around 20% profit on any investment. By accurately planning for this, you can better set budgets for buying and for refurbishment. To continually make money, you must use the profits from your flip to invest in another property. When you stop flipping, you stop making money. It’s a wonderful way to make money in the short term. Rental properties are an incredible way of making continual profits through property. It is a form of passive income that works best for incremental, long term investment. BEST MOMENTS ‘It’s not just about making money. You also need to make sure that you keep your money’ ‘When you sell a property, you crystallise your profit’ ’The decisions you make right now are based upon the knowledge and experience you have at the time’ ’Sometimes you just need the money for something else' VALUABLE RESOURCES To find out more about The Property Magic Challenge visit www.propertymagicchallenge.co.uk Property Magic: How to Buy Property Using Other People's Time, Money and Experience by Simon Zutshi To find your local pin meeting visit: www.PinMeeting.co.uk and use voucher code PODCAST to attend you first meeting as Simon's guest (instead of paying the normal £20). iphone: http://bit.ly/pinAPP1 Android https://bit.ly/pinAPP2 Register at Mindset For Property at - www.mindsetforproperty.co.uk ABOUT THE HOST Simon Zutshi, experienced investor, successful entrepreneur and best-selling author, is widely recognised as one of the top wealth creation strategists in the UK. Having started to invest in property in 1995 and went on to become financially independent by the age of 32. Passionate about sharing his experience, Simon founded the property investor’s network (pin) in 2003www.pinmeeting.co.uk. pin has since grown to become the largest property networking organisation in the UK, with monthly meetings in 50 cities, designed specifically to provide a supportive, educational and inspirational environment for people like you to network with and learn from other successful investors. Since 2003, Simon has taught thousands of entrepreneurs and business owners how to successfully invest in a tax-efficient way. How to create additional streams of income, give them more time to do the things they want to do and build their long-term wealth. Simon’s book “Property Magic” which is now in its sixth edition, became an instant hit when first released in 2008 and remains an Amazon No 1 best-selling property book. Simon launched his latest business, www.CrowdProperty.com, in 2014, which is an FCA Regulated peer to peer lending platform to facilitate loans between private individuals and property professionals. CONTACT METHOD Contact and follow Simon here: Facebook: http://www.facebook.com/OfficialSimonZutshi LinkedIn: https://www.linkedin.com/in/simonzutshi/ YouTube: https://www.youtube.com/SimonZutshiOfficial Twitter: https://twitter.com/simonzutshi Instagram: https://www.instagram.com/simonzutshi/