Property Flip Profit Calculator
Project the profit on a property flip — purchase, refurb (with contingency), holding costs, and selling fees against expected sale price. Outputs profit, ROI, annualised ROI, and break-even sale price.
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A property flip works when the sale price covers the purchase, refurb, holding and selling costs by enough margin to compensate for the risk and time. Most amateur flips lose money on the costs they did not budget for: the contingency on refurb that overran by 30%, the extra two months of holding while the market cooled, the 5% under-asking offer they had to accept. This calculator forces all of those costs into the same view and shows the break-even sale price along with the standard 30% deal-margin target.
Examples
Tidy 6-month flip — $180k buy, $35k refurb, $280k sale
30% margin sanity check
Frequently Asked Questions
What contingency should I budget for refurb?
How do I estimate sale price honestly?
What about capital gains tax on the profit?
When does flipping not make sense vs renting?
References
- IRS — Topic 409 Capital Gains and Losses — https://www.irs.gov/taxtopics/tc409
- HMRC — Capital Gains Tax on property — https://www.gov.uk/capital-gains-tax/property
Quick Tips
Double check your inputs. Ensure units match (e.g., inches vs cm).
A property flip works when the sale price covers the purchase, refurb, holding and selling costs by enough margin to compensate for the risk and time. Most amateur flips lose money on the costs they did not budget for: the contingency on refurb that overran by 30%, the extra two months of holding while the market cooled, the 5% under-asking offer they had to accept. This calculator forces all of those costs into the same view and shows the break-even sale price along with the standard 30% deal-margin target.
How to Use This Calculator
Enter purchase price plus realistic purchase costs (SDLT, legal, survey). Estimate refurb at trade prices and add a 10–20% contingency. Pick a realistic months-held figure (refurb time + 2–3 months to sell) and the monthly holding cost (mortgage interest, insurance, council tax, utilities). Enter the sale price you can defend with comparable evidence, the agent fee percentage, and selling legal costs. Cash invested is your own money in the deal — for ROI it should exclude any mortgage borrowed.
Understanding the Formula
Profit = sale − purchase − purchase costs − (refurb × (1 + contingency)) − (months × monthly holding) − (sale × agent%) − selling legal. ROI = profit / cash invested. Annualised ROI = ROI × 12 / months. Break-even sale price = total costs.
Examples
Tidy 6-month flip — $180k buy, $35k refurb, $280k sale
Costs: $180k + $12k + $38.5k (35k +10%) + $5.4k holding + $5.7k selling = ~$241.6k. Profit ≈ $38.4k. With $80k cash invested, ROI = 48%, annualised = 96%. The arithmetic looks great; in practice the $35k refurb on an old house often becomes $45k.
30% margin sanity check
A common rule says total costs should be ≤ 70% of expected sale price. Sale × 0.985 (after agent fee) − fixed costs ≥ 0.30 × sale. For the example, sale needed for 30% margin ≈ $350k, well above the $280k modelled — so this deal has a thinner margin than the rule of thumb suggests.
Frequently Asked Questions
What contingency should I budget for refurb?
10% if you have a detailed schedule of works with a known builder you have used before, 15–20% otherwise, 30%+ if there is any structural or services unknown. The contingency is not a guess — it is a probability-weighted reserve. Cheap to budget; expensive to skip.
How do I estimate sale price honestly?
Pull at least 3–5 comparable sales (not listings) within 0.5 miles in the last 6 months — local MLS / Zillow / Redfin in the US, Land Registry / Rightmove sold-prices in the UK. Adjust for size, condition (post-refurb), and time-on-market. Discount your figure 5–10% for the bid-ask spread you will see at sale time.
What about capital gains tax on the profit?
A flip is generally not your main residence, so the profit is taxable. US: short-term gains (<1 yr) tax at ordinary income rates; long-term at 0/15/20% federal + state. UK 2026: residential gains at 18% basic / 24% higher rate, with a reduced annual exempt amount. Speak to an accountant before structuring the deal.
When does flipping not make sense vs renting?
When transaction costs (transfer tax both ends + agent + legal) and capital gains tax eat too much of the gain. In a flat or falling market, holding-and-renting often produces better risk-adjusted return. Flipping really shines in a rising market with a clear value-add play (extension, layout reconfig, conversion).
Assumptions & Limitations
- Capital gains tax is excluded — non-main-residence flip profit is taxable; consult an accountant for your jurisdiction's rates and any allowances.
- No financing costs beyond monthly holding — bridging finance, arrangement fees, and exit fees on bridging loans should be added to purchase or holding costs.
- Refurb contingency is a single uplift; in practice, schedule of works overruns are usually concentrated in 1–2 line items (typically structural or services).
- Sale price is your prediction. The largest single source of model error is sale-price optimism — pull comparable sold prices, not asking prices.
- No insurance void clauses, no planning surprises. Both can blow a flip budget; do due diligence pre-purchase.
References
- IRS — Topic 409 Capital Gains and Losses — https://www.irs.gov/taxtopics/tc409
- HMRC — Capital Gains Tax on property — https://www.gov.uk/capital-gains-tax/property