I’m sure you know all about the home flipping craze. You’ve all seen home flipping shows on HGTV.
When you flip a home, you essentially buy a home and sell it soon after for a higher price. 10 years ago, flipping was a mainstay of the real estate boom that led to the financial crash. After some years of low activity, flipping is back in full force thanks to popular TV shows such “Flip or Flop” and “Fixer Upper.”
If you are interested in flipping homes, there are three facts that you should know.
1. Home flipping is more profitable than ever. A recent Waco home that appeared on “Fixer Upper” was bought for $28,000 and sold for $950,000, over thirty times the original purchase price. Of course, not all flips get such extreme results. As a whole, though, home flipping is more profitable than ever. In 2016, flipped properties sold for an average of $190,000, which was $62,000 over the median purchase price of $127,000. In other words, flippers got a 49.2% return, which is the most profitable flipping has been since 2000, the first year such data became available.
2. Flipping is caused by different factors than it was 10 years ago. 10 years ago, many flipped homes were just speculations. In other words, investors would buy a home and then wait, hoping the price would go up so they could sell. Today, more flips involve improvements that increase the home’s value, such as bathroom or kitchen remodels. The current flipping trend is a positive response to current market conditions such as the lack of homes for sale, the lack of new construction, and the rise in home prices.
3. Home flipping affects all buyers and sellers. If you are a buyer, you can clearly benefit from the flipping craze. There are flipped properties available in all price ranges, from entry-level to luxury homes. As a seller, this flipping boom means that you may face tougher competition when your home is on the market. The good news is that demand still far outpaces supply.
If you are interested in flipping a home or seeing what your home could sell for with major improvements, just give us a call or send us an email. We would be happy to help you!