From 2004-2007, Americans were flipping houses at an alarming rate. Real estate prices were rising rapidly, and people were making easy money on the housing market. As we all know, that housing bubble burst and flipping became a thing of the past in 2008. The housing market fell apart and it became almost impossible for anyone to purchase one home, let alone flip multiple homes. There are a few factors that will make 2017 one of the most competitive and lucrative years to flip a house since 2007.
Interest Rates are Low
The average mortgage interest rate is somewhere between 2.94% and 3.69%, which makes buying a home with little money up-front possible for the first time in years. For comparison, the average mortgage interest rate in June of 2009 was nearly 6%, and rates never went below 5% in 2009.
Renting is Too Expensive
The debate over renting or buying is something everyone has an opinion on. Whether you think renting is a good thing or a bad thing, the bottom line is renting prices are on the rise. Property owners are increasing rent each year and with each new tenant they bring in. As the price of rent increases, the incentive to buy becomes stronger. A house in need of repairs is not nearly as coveted as a house that’s move-in ready at closing.
Down Payment Insurance
When flipping a house, the flipper is taking an educated gamble on the housing market after the renovations are finished. With a little market research and the help of a realtor, the house should turn a profit after it is flipped. On the off chance that the market crashes before the house can be sold, down payment insurance from ValueInsured protects your investment for a set number of years and up to the original down payment in equity lost.
Flipping is Trendy
Television shows have a way of creating a boom in a certain industry that was almost unheard of beforehand. Shows like Flip or Flop, House Hunters, and Fixer Upper have turned the average TV-watching American into a wannabe realty mogul. With a little motivation, anyone can go out and get a loan to purchase an old, dilapidated home. The challenge is finding the right people and companies to work with to maximize profits for everyone involved.
While flipping houses might seem as easy as buying a house, fixing it, and selling it, there are a lot of factors that go into each process. The best way to get into flipping houses is by talking to professionals in the industry. Do research in your market and find out if flipping is a good investment. It can be a slippery slope if you get off on the wrong foot, but if done properly, flipping can be a lucrative side business for just about anyone.