Don’t be alarmed aspiring real estate investors–the coronavirus hasn’t dampened the fix and flip market. While it may require some additional planning and forethought in order to net a healthy profit margin as compared to the pre-pandemic industry, real estate entrepreneurs are still earning hefty sums around the country and you could be too!
Here’s the thing: when it comes to the fix and flip approach to real estate investing, location is essential. But how do you figure out where the most ideal spots to focus on and what specific criteria will help you make informed decisions? We’ve got you covered. Read on for an analysis of the hot markets for spring 2021 and a handy guide to teach you the basics of how to recognize favorable markets in the future.
Understanding how to interpret the fix and flip market is a crucial ability for those individuals wishing to turn a profit from real estate investing. Here are some criteria the experts use to determine which are the best and worst markets for property investments:
- Homeownership Percentage: This indicates the number of households who own their properties instead of renting them. A fix and flip investment strategy is logical in areas where families exercise their purchasing power to invest in their real estate assets. Localities with lower ownership rates draw residents who prefer renting, meaning there is a less likely chance you will be able to quickly resell a renovated property.
- Average Income: Another important criterion to take into account is positively correlated with the purchasing power of individuals in a given geographic market. The more income a household generates, the higher the chances you will be able to market your investment project at a price point that offers a high rate of return.
- Property Value: Fix and flip investors earn more when it is all said and done in areas where the average home price is higher than average. Furthermore, a high average market value indicates that there is a high buyer demand for housing in the area, improving your resale chances.
- Median Time to Sell: The more time a property lingers on the market, the more money you lose as a fix and flip investor. For example, in Vermont, it typically takes around 140 days from the time a property is listed for sale to when it is eventually purchased. In Virginia, however, the same process only takes an average of 73 days.
Now that we’ve covered the bases on what factors to keep an eye out for when considering where to invest in fix and flip properties, here’s an analytical breakdown of the top-ranking states we’ve identified for the upcoming months.
Interpreting the Data: Best Fix and Flip Markets for March 2021
Utah and Tennessee in particular set themselves apart as some of the best fix and flip markets in the country as the average total remodeling cost for properties are relatively low–$12,000 and $16,000 respectively. As a fix and flip investor, you want to avoid having to shell out thousands of dollars more than necessary to remodel your property, especially in markets where the sales price may be a bit lower than what you had anticipated in light of the coronavirus. To earn a lucrative sum flipping properties, you will need to rehab the properties for a reasonable expense. What’s more, Utah boasts one of the lowest vacancy rates in the country—making it a market primed for fix and flip investors looking for a high-demand market when it comes time to resell renovated properties. On average, fix and flip investors in Utah spent around $83,000 to renovate properties—with projects located in the West Valley City market in particular netting the biggest return on investments.
Looking for some East Coast options? You’re in luck! Greensboro, North Carolina is a great market for fix and flip investing. With an average home value of $180,600, house flippers can renovate homes for below-average expenses. This area has a solid quality of life and is one of the largest growing economies in the state—meaning there will be sustained demand for housing options in the future. Pittsburgh, Pennsylvania is also another promising market, where the average ROI of flipping houses is an eyebrow-raising 162.4%. Properties also only remain on the market for an average of 80 days—signaling that buyers are active in the area.
If you are considering doing a fix and flip loan, let the team at Alpha Funding Partners help! We offer affordable financing with great rates and leverage. Reach out today to see how we can help you with your next real estate investment.