Over the past few years, fixing and flipping homes in the United States has become a very profitable opportunity for investors. In fact, it doesn’t matter if you’re a savvy investor or someone who only sees it as a side hustle, fixing and flipping houses can help you with huge income and room for growth.
Just take a look at what the data has to say. According to statistics, a reverse property was able to generate a profit of more than $70,000 per property in 2020. This was a realistic average, which shows the kind of potential in this market. However, there is no denying that, like any investment, trends in this industry can change from year to year.
One thing that almost all experts emphasize is studying market trends to stay relevant and understand the nature of your investment. This can be done by analyzing the best markets and locations suitable for this sector of investment. In other words, the place where you live and the location of the house must be located in a city, town or region with high demand.
In this property repair and flipping resource, we’re going to look at six cities that are perfect for recording high growth margins. However, before we get to the list, let’s first look at some important factors that need to be considered when it comes to repairing and knocking down houses.
Factors to consider when repairing and flipping homes in the US market
In this section, we will list five factors that play a critical role in determining the success of your turnaround plans and investments in the US real estate market.
- Renovation costs– Investors should be aware of the renovation costs that will be involved when renovating a property. This means looking at raw material costs, understanding labor wages, and seeing the fees that should be paid for permits.
- Population assessment– Many leading experts are of the opinion that investors should look for locations that have low unemployment rates and rising job opportunities. If the location is promising, people will want to invest in good to decent homes.
- Neighborhood type– Any investor should check the quality of the neighborhood and determine whether or not it would be desirable for homeowners. Although it may be a little pricey to start with, you can be assured of strong growth.
- Arrival of a major industrial or government project– Think about how the Denver market is booming thanks to the rise of tech entrepreneurs. Likewise, if there is a major government project coming up, the value of the location will increase significantly.
- Opt for fewer competition areas– Home flipping starts with buying dilapidated properties at a bargain price. This means that you should look for areas where buying property is easier. This will help you get great value and build your margins.
List of Top 6 US Markets for Fixed and Reverse Real Estate Investments
- Pittsburgh, Pennsylvania:
In recent years, Pittsburgh’s growing population has moved toward the big houses. Real estate investment is increasing every year, and a booming economy with a younger workforce is to be credited for that. The data suggests that Pittsburgh offers the highest yields in the US real estate market. It should be right at the top of your list of reverse investments.
- Dallas, TX:
A strong economy does more than increase the value of commercial real estate. When an area experiences commercial growth, residential growth follows. With a population reaching nearly 29 million and Dallas’ lack of job opportunities, residents enjoy low tax rates and a general cost of living. Multifamily properties are being built and sold to accommodate Dallas’ growing population, and many local businesses also offer competitive fixed and reverse loans. Therefore, if you are a real estate investor, now is the time to invest in Dallas.
- New Orleans, Louisiana:
The city made headlines for witnessing Hurricane Katrina and experiencing the worst. However, things have changed for the better with the government and the local community stepping up to build this great city. With an average low home price of less than $200,000, many turnaround investments have the potential to generate over 100% return on investment.
- Denver, Colorado:
In the last section, we already touched on the Denver market. With more and more entrepreneurs and tech companies trying to explore Colorado and relocate, real estate prices are on the rise. Fueled by venture capital funds, start-up founders seek out stunning homes to display their extravagant and successful lifestyles. It is one of the hottest markets in the United States.
- Greensboro, North Carolina:
The advent of high-paying professional jobs is one of the major reasons driving the growth of this market. Young professionals are eager to invest in real estate and want homes that reflect their newfound success. Another reason driving the flip is the low cost of renovation. The $20,000 figure is among the lowest in US real estate markets.
- City of West Valley, Utah:
This is another booming housing market that is experiencing high demand. With rather low homeownership rates, this could be a perfect market for burglars thanks to its low turnaround times, affordable renovation costs, and booming population. Experts suggest West Valley City may hold some pleasant surprises for investors in 2022.
The last takeaway
Real estate investors looking for turnaround opportunities need to understand that if they start with a great location, they’ve already won half the battle. Returning profitably is not easy. You need to do your research and know everything from initial purchase costs to renovation costs and turnaround times. If you would like us to help you out in any way on the matter, please let us know in the comment section below.