Another thing to consider is that the profit margin for house flipping has shrunk slightly since there are less distressed homes up for grabs.Įven though the profits are getting a little tighter, in Q2 2018 flippers made a 44.3% gross return. Of course, that’s the average not a guarantee for all house flips. On average, house flips brought in $65,500-$69,500 in gross profit during the first half of 2018. House flipping is a short-term investment that more and more people are making. Keep reading to get a better feel for what it’s like to flip homes and whether it’s an investment you want to try. It’s a high-cost, short-term investment - There are hundreds of thousands of dollars involved with a house flipping investment and things move very quickly. It’s best left to those who have experience owning and renovating - A true novice can try house flipping, but it’s a lot easier if you’ve already owned and renovated a home. It ain’t easy - Flipping a house takes a lot of time, energy, effort, and money. It isn’t for the faint of heart - Despite what you see on TV, flipping is a large gamble and you have to play your hand right to realize a profit. However, you should know there are a few things that house flipping is and isn’t: The goal is to purchase a home below value then turn a profit by selling it at the true market value a short time later. In other words, it’s an investment property that you never intend on living in or renting. Here’s another way to define what house flipping is - when a home is bought with the express purpose of selling it within a year to make a profit, usually after improvements are made. Of course, that can happen without the intention of flipping. The technical industry definition of a house flip is when a home is bought and sold within the first 12 months of ownership. Either way, last year the number of house flippers hit a 10-year high. Maybe it’s all the reality shows on HGTV, the increase in opportunities since the recession, the possibility of making a tidy profit within months or a combination of all three. Flipping homes has quickly become one of the most popular forms of short-term investment in the country.
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