Flipping houses used to be a big thing. Granted, that’s when housing as an industry was relatively healthy. Now, however, it it’s been ill for a while, but more people are flipping houses again.
Making cash on a house
Prior to the housing industry imploding and a recession starting, a lot of people turned to flipping properties. Clearly it was a great idea when people really were purchasing houses and there was a profit to be made but since then, it hasn’t been as lucrative.
People can make cash off a house if they flip it as opposed to just living in it. Houses are a ton of work and cost a ton of cash because of improvements, repairs, maintenance, taxes and other costs you would not consider when looking at the purchase price. There is potential to make cash, but it does take work on an older house.
However, the formerly-popular house flipping industry, according to the Washington Post. RealtyTrac, the real estate site, reports a 25 percent increase in the first half of this year over the same period last year.
Gaining steam
The top area for flipping houses was Phoenix, Arizona with10,000 flips. Arizona, Florida, Nevada and California were all areas hit really hard in the recession because of inflated real estate values, and they are also the areas where more people are flipping properties.
Areas with a lot of foreclosures were hit hard, such as Atlanta, Miami, Las Vegas and LA. These areas also saw a ton 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 ton of flippers, according to the Chicago Tribune. About 100,000 properties in the country have been flipped and sold.
Not as simple as it looks
Flipping properties seems simple, but it isn’t just putting in some new cabinets and cash rains from the sky. Many properties are foreclosures, according to CNBC, which have been sitting for a while and need to be rehabbed to be inhabitable, which can be expensive. Researching each house is paramount and interested people need to take their time to find a house to flip that will be worth it, financially.
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 cash down. You need a ton of cash on hand to get the house.
The net profit on flipping houses is not very inexpensive either, according to the Washington Post. The average profit per flip on RealtyTrac was $29,432, which seems good except that is only the main difference between purchase price and sale price. That does not account for any 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 inexpensive labor.
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