Expert names advantages and risks of flipping apartments in old buildings

Flipping apartments on the secondary market can earn from Br300 thousand to Br10 million depending on the city, said Dmitry Kupina, an expert in objective evaluation and sale of real estate. He told "Izvestia" about the advantages and risks of this type of investment.

Flipping is investing in real estate for a short time and its subsequent resale for profit. In this case, the investor selects an apartment in need of repair, but liquid apartment at a discount, and after bringing the housing in order resells at a higher price.

According to Kupina, flipping can be divided into several stages: search for the object, repair, sale. The first one is the most important, because when choosing an apartment you can be mistaken with its location, condition, valuation, and then the investment will not justify itself. At the same time, it is impossible to know 100% exactly what object will eventually meet the expectations of flippers and bring maximum benefit.

"By the way, it happens that apartment owners urgently need money and are ready to sell the object at a very attractive price. In my practice several times there were such cases when we bought out apartments at a cost of 20-30% below market value. But to catch such an object, you need to constantly monitor ads on [online ad platforms] or have connections in real estate circles," said the expert.

The second stage is to choose a team that will carry out repairs in the apartment. In this case, if the flipper himself does not understand the technical aspects, then he will have to hire a specialist who will control the process, in addition to the brigade itself. This will require additional financial costs, but will significantly reduce the repair time, added Kupina. Over time, the flipper himself can learn to understand technical issues, which will simplify his work. According to the expert, ideally it is necessary to look for performers who will make repairs on a turnkey basis - from dismantling of structures to the final finishing of the room.

The sale of an already renovated apartment can be handled by the investor himself or a real estate agent who knows how to find the right buyer and present the apartment in a favorable light.

"Often real estate agents ask owners to keep quiet at viewings, or better yet, not to come at all. It is possible to sell the apartment through the agent through whom you bought it. Practice shows that this can significantly speed up the process," Kupina said.

He noted that flipping can be done in any city. The difference will only be in the benefits. If, for example, flipping in a city with a population of 300-400 thousand people will bring up to 300 thousand rubles from one object, then in Kazan, St. Petersburg and Moscow you can earn millions.

At the same time, the specialist drew attention to the fact that those who want to make money quickly and one-time, in this area will not stay. Flipping should be engaged in carefully and constantly.

"If we talk about the risks of flipping, they are about the same as when buying an apartment for yourself. You need to carefully choose the location, study the condition of the house, down to how the windows and front doors look like in the apartments of neighbors. It is important sanitary condition, the absence of encumbrances, minors among the owners. But to avoid all these pitfalls will help competent agents", - summarized Kupina.

The information in the material is not an investment recommendation.

Earlier, August 22, the director of development company Rariteco Ekaterina Borisova told "Izvestia" that the most likely scenario for the real estate market in Russia in the fall - stabilization or decline in prices. According to her, the average values may not change fundamentally - relatively expensive and liquid projects will enter the market, but at the same time developers will reduce prices or offer discounts to accelerate sales in old projects against the background of high mortgage rates.