2 Ways to Make Money on Residential Property

high quality mortgage brokerOf all the assets you could put your money into, few are capable of generating the long-term returns possible through residential property. And if you know how to do it, residential property can provide more than just long-term investment income. It could also provide a relatively good living in the here and now.

There are two ways to make money in residential property: flipping and buy-to-let. Neither method is all that difficult to get into either. You need a minimal amount of capital up front, the help and advice of a high-quality mortgage broker, and the willingness to put in some of your own equity. The harder you are willing to work the more profitable residential property is.

Flipping Houses in the UK

Although house flipping is not as popular here as it is in some other parts of the world, there are still plenty of people who make good money doing it. House flipping is the practice of purchasing cheap houses in need of significant renovations, then doing those renovations and reselling the properties at a profit. It is a strategy for generating what is known in the industry as ‘chunk of money’ through short-term ownership and quick resale.

Let’s say you come across an off-market property you can purchase for £75,000. You have enough cash for a down payment and enough additional resources to secure a good mortgage. You invest another £25,000 to bring the home up to modern standards. Suddenly it is worth £150,000. You can make a £50,000 profit by selling it.

Now, understand that these numbers were just made up for the purposes of this post. How much profit there is to be made on any particular house depends on a range of factors. The key to making money by flipping is learning how much to pay to acquire properties. Figure that out and you can make some good money in flipping.

Buy-to-Let in the UK

Buy-to-let used to be the preferred way to make money in residential property until the government began penalizing landlords a couple of years ago. But no worries; there is still money to be made in buy-to-let. You just have to know how do it right.

First and foremost, you would set up a limited company rather than owning the properties yourself. You would draw a salary while the company pays lower tax rates on its income. Operating a limited company protects you from most of the government’s initiatives designed to discourage landlords from buying more properties.

Like house flipping, the next step is to start looking for off-market properties that can be had at lower prices. Work with a high-quality mortgage broker capable of securing an attractive buy-to-let mortgage and off you go. Do some renovations, rent out the property, and watch the monthly payments start rolling in.

The downside to this strategy is that rental properties require ongoing maintenance and upkeep. You can do the work yourself or contract with a property maintenance company. In either case, your rent needs to be high enough to cover your mortgage, all the maintenance and upkeep, and a little bit of profit. And as time goes on, the value of that property will increase. This is where the long-term investment returns come into play.

Property Isn’t for Everyone

This post is intended to neither offer financial advice nor convince you to jump into the property market. In fact, residential property is not the right investment for everyone. Regardless of whether you flip or rent, property is a high-stakes game. With the potential to earn good money is also the possibility of losing just as much.

The most suitable candidates for house flipping are people who are good with their hands and have a history of completing successful renovation projects. The thing to remember about house flipping is that it essentially becomes a full-time job. You have to put in the time and effort necessary to do the renovations yourself. If you pay someone else to do them, you will be eating into your own profit.

Ideal buy-to-let candidates are those people capable of focusing on long-term investments. There is money to be made in the short term, but the real value in property is building a strong portfolio over time. Some of the most successful buy-to-let investors in the world started with just one or two properties. They gradually grew their portfolios to include thousands of properties worth millions.


There is money to be made in residential property. If you are looking for something a little bit different and you have enough cash on hand to make a moderate investment, you can purchase off-market properties with the help of a mortgage broker. You can then either flip those properties or rent them out.

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