RealtyTrac reports that houseflip return rates have risen, although investors have become more cautious due to slower price increases.
of Their latest reportRealtyTrac shows that 3.7% of all single-family homes were sold as flips in the first quarter of 2014 (defined as homes resold for profit within 6 months).
As of the last quarter of 2013, their feedback reported a reduction in totals as 4.1% of all SFRs were flips. On the contrary (intended for puns), it showed that higher rates of return were being made.
The average resale price for these homes was nearly $ 56,000 higher than the investor’s initial price. According to their data, the gross profit of these flips increased (on average) by 7.8%.
Is house flipping dead?
Rising house prices have reduced the shortage of sales, Foreclosure Many investors may be withdrawing to make a choice and to slow down their purchases. The rest of the investors need to be more cautious if making money is easy and based almost purely on guessing (and being lucky) the market’s valuation.
RealtyTrac’s VP thinks it’s a good thing, but says housing recovery should be “being much more rational than the previous housing boom.”
For speculators and inexperienced investors, they don’t want to take risks because they don’t have a solid evacuation plan, so they remain too scared to continue buying and flipping.
For the remaining investors, it is necessary to create value through thorough rehabilitation, if not complete refurbishment or permitted additions. Double, refurbishment should be strategically done in a way that maximizes ROI.
Overall, the median flip return was 13% for investors, as calculated by RealtyTrac. The top regions (at least one million people flipped at least 25 times in the first quarter) were Miami, Las Vegas, San Diego, Jacksonville, and New York.
What do you think? Do you think more investors are withdrawing in your area? Does what’s left look like it’s making a better spread?