3 Reasons House Flipping is Doing So Well

The current house flipping market doesn’t look like what most laypeople would expect it to. Investors are not primarily focused on foreclosed homes, because there aren’t very many on the market. And yet, selling your house flipping investment property in today’s market is bringing record returns. Across the state of California and into Texas, Michigan, Colorado, and other states, house flipping is paying huge dividends.

Why? What is it about the current housing market that is making selling your rehab property so successful?

Here are three factors that we think are significantly contributing to the situation.

  1. Faster Home Sales

In high demand markets like San Francisco and Los Angeles, homes frequently sell within hours of being posted as available. It’s incredibly hard today to find a good deal, or even a home that fits your specific needs, because the market is quite slim and new home construction is not keeping up with demand.

We’re also in a unique situation where there are a number of websites and housing apps that give people information about new home listings faster than ever before. As a result, we are in a seller’s market, and it looks like it will remain that way well into 2016.

  1. Smarter Investors

Of course, on the front end, the competitive housing market means that investors need to be smarter about where they buy and for how much. Finding undervalued homes is extremely tricky, and being the first to pounce is nearly impossible. That’s why the people who are having the most success in the current marketplace are those who have done their research and secured house flipping loans in advance.

These people are ready to move and are willing to think outside the box when it comes to finding an ideal property. When foreclosures are few and far between, the investors who stick around are the ones who are willing to dig a little deeper and invest in properties with bigger front-end costs and much bigger ROI potential.

  1. Stronger and Stronger Markets

Rent prices are on the rise, which is pushing more people towards buying. The economy is also seeing big improvements, with new jobs being added to the economy every day. Millennials are showing strong preferences for major cities, and interest rates on federal home loans remain extremely low.

All of this adds up to an extremely strong national housing market that is only getting stronger. Zillow and other housing experts expect home prices to continue to rise throughout 2016.

These factors mean that fewer people are flipping houses right now, but those who are flipping houses are making better profits than we’ve ever seen. Gross profits in excess of $100,000 per flip are becoming commonplace in high-end markets. Needless to say, if you are serious about rehabbing homes, the time to get in the game is now.

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