To flip or not to flip? That is the question–at least for real estate investors in an uncertain market like this one.
After the housing crash, the dream of flipping houses for profit was all but dead. Now, during the current slowdown, flipping has once more become a risky business.
Despite the risk, flips were up by 3.5% in September of 2018–a trend we expect to see continue through 2019 unless something drastic happens.
Best Places for Home Flipping
Some regions are still a veritable goldmine for investors. The hottest markets are those where housing costs have not yet outstripped income, such as Charlotte, NC. Often, these hotspots are inland and centered around a growing industry.
Here are a few other places where home flippers can still get a good ROI:
Phoenix, AZ
This Arizona metropolis is the flipping capital of the United States. Retirees are fueling the demand for homes in Phoenix, and with an average difference of 36% between purchase and sale prices, savvy flippers are still able to make a profit there.
Raleigh, NC
A robust economy and employment rate means this region just keeps growing. The average difference between purchase and sale prices is 35% in area, and demand for housing is not likely to slow down.
Orlando, FL
People are still flocking to the Sunshine State, which is good news for Florida flippers! The difference between purchase and sale prices in the Orlando area is a whopping 41%.
Las Vegas, NV
Do you feel lucky? Then head over to Las Vegas, where home flippers can expect to find an average 38% difference between purchase and sale prices. After the bubble nearly leveled the Las Vegas housing market, it opened the door for investors to try their hand at flipping houses.
Hidden Costs of Home Flipping
Before you or your clients get carried away by the idea of a 35% profit, be aware that it costs money to rehab these houses. Although you might be able to get a good deal on a home in the regions above, the increase in home flipping activity means that contractors will be at a premium. Investors who are able to put in their own sweat equity during a renovation have the advantage.
People looking to get into home flipping should have a robust credit score and plenty of cash to pay for repairs. If they can pull together the resources, the risk might pay off. But there’s no guarantee, even in the cities listed above.
