Introduction to flipping houses

Flipping property is still a trend in today’s real estate market. Although it’s not as easy as it once was, flippers are still able to find qualified buyers and make a profit as long as they are willing to put forth the effort. Despite the oversupply of homes due to foreclosures, strict lending standards, and high unemployment, savvy investors are still making money flipping houses.

Compared to when the housing market was booming, today’s investors are relentless in pursuing bargain-priced properties at foreclosure auctions. These types of investors are measured risk-takers, are well informed about the local market, and are accustomed to doing comprehensive research about the property and market. They have calculated the costs to complete flips to minimize their risks and maximize their profits. Clearly, the advantages of flipping houses in today’s real estate market make this business profitable even today.

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Advantages

* Investors have plenty of choices for houses to flip. If they can buy a property at 30 percent below market value, do minor repairs, improve the landscaping, repaint, and replace fixtures and add new appliances, they can typically sell it for a profit.

* There is ample opportunity to find great deals as there is an abundance of foreclosed houses available in many locations. As the owners of the properties, banks and investors are selling these houses cheaply in order to recoup their investments.

* There is an opportunity to become a rehabber and a landlord. Flippers remodel houses to make them ready for the right buyers.

* Investors help maintain the houses they purchase at foreclosure auctions from falling into disrepair.

*Flipping gives you the ability to sell houses in high volume in order to make a profit.

* Flippers have the option to focus only on properties that have cosmetic damage, which can be repaired easily and inexpensively.

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Disadvantages

Although flipping houses can be profitable, investors are also aware of the disadvantages, such as:

* It is a buyer’s market, which means that it could take several months for flippers to sell a house. Buyers have many choices, and as a result, they are often slow in making a decision.

* Banks are getting stricter with their lending policies, making it harder for buyers to secure the mortgage financing needed to buy a house.

* Flippers carry additional costs on unsold houses; it is expensive to maintain property that is slow to sell. Carrying costs like property taxes, maintenance, and property insurance can quickly erode profits.

* There are many competitors in some markets, which make it a lot harder to sell a house in these markets compared to others.

* Houses that sell for less than market value could decrease the adjoining property values in the neighborhood. As a result, buyers may have a negative perception and are discouraged from purchasing.

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Conclusion

Flipping residential real estate in today’s market is risky, but experienced investors are still able to make money. They put forth the effort to do thorough research and due diligence, which is required to make a profit. A savvy flipper is not only surviving in today’s real estate market but prospering.