Flipping homes was a big pattern for a while there, until the housing market crashed. However, the quantity of people doing it has begun to increase.
Fast cash on a home
Prior to the housing market imploding and a recession starting, many people turned to flipping properties. Clearly it was a great idea when people really were getting properties and there was a profit to be made but since then, it hasn\'t been as lucrative.
Many people do not make money off a house. It is not an investment because a person has to pay for the house, repairs and improvements, taxes, insurance, maintenance and more. When flipping a house, a person usually buys it for dirt affordable and fixes it up to turn a profit.
However, the formerly-popular house flipping industry, according to the Washington Post. RealtyTrac, the real estate website, reports a 25 percent increase in the first half of this year over the same period last year.
Large areas for flipping homes
Oddly enough, the leading area for flipping homes in RealtyTrac\'s data is Phoenix, Ariz., one of the hardest-hit states in the real estate slump, with almost 10,000 flips. Arizona, along with Nevada, Florida and California were particularly impacted, as real estate values were drastically inflated in those areas.
Areas with a lot of foreclosures were hit hard, such as Atlanta, Miami, Las Vegas and Los Angeles. These areas also saw a lot of flipping. There were 1,067 flips in Chicago this year, which is a thirty percent increase, and means the city is also getting a lot of flippers, according to the Chicago Tribune. About 100,000 homes in the country have been flipped and sold.
Not as easy as it looks
It is essential that you research the properties to find a house that is worth flipping before getting to the process. It takes a lot of additional and cash to buy a house and put upgrades into it. Some people think it is simple to get a house, upgrade it and sell it for extra cash, but according to CNBC, most flipped homes are uninhabitable and need a new home. Make sure you research before you try it out.
Auctions do not always have the very best properties, and, according to MSN, it is almost impossible to get a property that can be flipped with no money down. You need a ton of cash on hand to get the house.
The net profit on flipping houses is not very cheap either, according to the Washington Post. The average profit per flip on RealtyTrac was $29,432, which seems good except that is only the difference between purchase price and sale price. That does not account for any other flipping costs, which are ridiculously high. It is probably not worth it unless you can do all the work in flipping the house on your own or can somehow get really affordable labor.
