Any successful investor will tell you it’s crucial to have a pulse on market trends. That’s why at the start of the new year, many real estate professionals can be found rolling up their sleeves in an attempt to determine the year’s best cities to flip houses in. One of the best ways to do this is to review the trends from years past to predict where the housing market will shift next.
Last year, U.S. house flippers earned an average gross profit of over $70,000 per property, according to Attom Data Solutions. However, much like popular real estate trends, profitability can vary greatly from year to year. This makes it almost essential for investors to keep an eye on top real estate markets, as location can be one of the biggest factors predicting potential profits. Chris Muller from DoughRoller suggests one factor to consider when flipping a house is if you are choosing the right place to live. Check to see whether you’re aware of your restrictions. Selecting a project within your abilities will give you the best chance of success. Switching from flipping old homes in need of minor TLC to one that needs a complete electrical overhaul certainly isn’t the best strategy. You’ll have a higher chance of making money if you stick to properties within your skills and experience”
The following guide reviews which cities have been deemed the best markets for flipping houses over the last few years. Can you predict where the market will go from here?
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5 Best Places To Flip Houses 2022
The list of top markets to flip houses can change every year, and year is no exception. Let’s take a look at the top five places in the United States to flip houses in the year 2022!
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Seattle
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Tampa
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Phoenix
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Charlotte
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Jacksonville
1. Seattle, WA
With a median income of over $92,000, as well as a growing population, houses are flying off the shelves in Seattle. Housing prices are continuing to increase, so finding the right deal may be tough, but the rewards can be massive. Seattle presents a great opportunity for a savvy investor and house flipper to step in and make some serious profit this year.
2. Tampa, FL
A home in Tampa, Florida only spends an average of 7 days on the market. Tampa has also decreased its unemployment rate dramatically over the past few years, making it a prime place to sell real estate. This along with a growing population offers tremendous potential for the right house flipper.
3. Phoenix, AZ
The population of Phoenix, Arizona has been rising over the last 10 years, and it is continuing to grow. The unemployment rate in Phoenix is also tremendously low, while the median listing prices on houses is quite high at $488,000. This leads to a favorable market when trying to sell property, as there are ample buyers moving to the area and working in the area.
4. Charlotte, NC
Charlotte, North Carolina has long been a popular city for house flippers, but the market is still ripe for the right investors. Many house flippers are currently holding onto their investments and using them for the rental income, as rent prices are currently at record highs in Charlotte. That being said, the one year appreciate rate on houses is currently 25% in Charlotte, which means that tremendous profit can be made from flipping the right housing deal.
5. Jacksonville, FL
Finally, Jacksonville, Florida ends our top 5 list for 2022. The Jacksonville area is currently seeing incredibly high appreciation values on homes, and many homes can be purchased, fixed up, and sold for major profit within just a few months. Jacksonville is also benefiting from the lower unemployment rate that is sweeping across Florida, which is making it easier to find buyers and sell homes faster.
5 Best Places To Flip Houses 2021
Some cities are better than others when it comes to flipping houses. If you’re interested in flipping houses this year, keep these top markets in mind.
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Pittsburgh
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New Orleans
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Denver
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Greensboro
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West Valley City
1. Pittsburgh, Pennsylvania
Pennsylvania offers great investment opportunities in general with high house flipping generating high returns on investment, but Pittsburgh is a city that really stands out in this state. Investors can expect to find cheap properties here that will generate great profits. The city is a growing market, making Pittsburgh a top market to flip houses in 2021.
2. New Orleans, Louisiana
The New Orleans real estate market has significantly grown after hurricane Katrina and remains one of the most densely populated cities in the state. However, investors can find a relatively lost cost to flip houses here. Home values average under $200,000 and generate over 100% ROI when flipped, so investors may find New Orleans a house flipping market to keep their eye on this year.
3. Denver, Colorado
As tech companies grow in this Colorado city, demand for remodeled homes also grows. House flipping projects can see a high return on investment in Denver. In addition, flipped homes typically last under 2 months on the market, providing a fast profit for investors.
4. Greensboro, North Carolina
Investors who flip houses in Greensboro, North Carolina can expect to do so for the low cost of around $20,000. High-paying jobs in this city increase housing demand, making for great investment opportunities. If you are looking to invest under $200,000 to flip a house, this city might be for you.
5. West Valley City, Utah
This city in Utah possesses a high homeownership rate, a low turnover time, and low remodeling cost when it comes to flipping houses. If you are looking to make a career out of flipping houses in Utah, pay attention to West Valley City when looking for a great market in 2021.
5 Best Places To Flip Houses 2020
2020 brought on market changes even the most expert level real estate investors were unable to predict, however the essence of a good house flipping market remains the same: low renovation costs and high profit potential. The following were thought to be the best markets for flipping houses in 2020:
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Sioux Falls, South Dakota
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Missoula, Montana
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Rapid City, South Dakota
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Billings, Montana
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Peoria, Arizona
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1. Sioux Falls, South Dakota
Sioux Falls emerged as one of the best house flipping markets over the last several years. With a median home value of $212,513 this South Dakota town has seen a 3.7 percent increase in home values year over year. Job creation and a small-town community feel have attracted a steady stream of homebuyers and renters. Investors who can cater to new buyers’ wants and needs could find several profitable deals in this midwestern town.
2. Missoula, Montana
Missoula is known for the surrounding wilderness and outdoor areas, which has attracted tourists and permanent residents alike. The town is also home to a growing restaurant and music scene, adding to its charm. According to Zillow, the average home price is around $347,838, with a 6.3 percent year-over-year increase. The same report showed the median rent to be around $1,450, which was a promising opportunity for house flippers looking to rent out finished properties.
3. Rapid City, South Dakota
This is the second South Dakotan city to make the list of best house flipping markets in 2020. One of the reasons the city is so attractive to residents is because it is within an hour’s drive of six national parks and monuments. It was so attractive to investors because of the home value and market conditions. Rapid City has a median home value of $212,403, which was expected to rise over the next few years. Investors who can find a fixer-upper at a great price can take advantage of these market increases.
4. Billings, Montana
About a five hour drive east of Missoula, Billings is another Montana market area that looks promising for house flipping investors. Similar to Missoula, Billings is also known for its proximity to the great outdoors. Tourists and residents enjoy the area for fishing, hiking, and sightseeing. The average home value was around $216,173, representing a 2.3 percent increase since 2019. According to Zillow, Billings’ surrounding areas had a slightly higher average sale and rental prices compared to the metro area. This could represent the opportunity to score a great deal on homes for investors willing to put the work in.
5. Peoria, Arizona
Peoria is the first southwestern town to make this year’s list of the best house flipping markets. This Arizona market is hot in temperature and real estate activity. Since 2019, Peoria’s median home values have increased by over seven percent. The current home value is $311,342 according to Zillow. It is located near Phoenix—one of the country’s fastest-growing cities for those unfamiliar with the area.
5 Best Places To Flip Houses 2018-2019
The southwest and midwest shone as the best places to flip houses in 2018. The top cities were selected by experts based on housing market drivers such as median purchase prices, average remodeling costs, and quality of life:
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El Paso, TX
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Sioux Falls, SD
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Fort Wayne, IN
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Peoria, AZ
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Oklahoma City, OK
1. El Paso, Texas
El Paso, Texas tops the list of 2018’s best places to flip houses, namely due to its notable market potential. According to U.S. News, a Texan locale scores a 7.2 out of 10 for quality of life and was ranked as the fifth-best place to retire in the nation. Over seventy Fortune 500 companies are based in the area, which is also considered the fourth largest manufacturing hub in the U.S. according to Zillow. The median home value was $123,400, which had a year-over-year increase of 3.6 percent. These statistics, coupled with low renovation and remodeling costs in the area, offered a strong return-on-investment potential for investors.
2. Sioux Falls, South Dakota
Nicknamed the “Best Little City in America,” Sioux Falls has attracted a spotlight for its low cost of home remodeling and relatively low median home value ($183,500.) Due to the city’s lack of a state corporate income tax, Sioux Falls is home to many notable financial companies and has a robust regional healthcare industry. A great quality of life and an impressive 8.8 percent increase in home values in just one year, making this location one full of promise.
3. Fort Wayne, Indiana
Fort Wayne is located in northeastern Indiana, about 18 miles from the Ohio border. Investors should note the city’s property value increase, which was forecasted to increase by 10.6 in 2018. With the nation’s lowest average bathroom remodeling costs, Fort Wayne positions itself as a strong candidate for house flipping.
4. Peoria, Arizona
Named one of the top 100 places to live by Money Magazine, Peoria is known for its resort-like and leisure lifestyle. Located just outside the Phoenix metro area, Peoria also serves as home to the San Diego Padres and the Seattle Mariners during spring training. This Arizona city is featured as one of the cheapest places to renovate and remodel property in the nation, with median home values that have increased steadily over the past 6 years.
5. Oklahoma City, Oklahoma
Oklahoma City is known as a regional economic center with a diverse range of sectors like information technology, health services, and administration. For example, Dell, Hertz, Cox Communications, and Boeing are all household names that call OKC home. Median home prices in the area were just $125,900, with a steady growth rate of 1.7 percent. Due to very reasonable home renovation and remodeling costs, combined with a good quality of life, Oklahoma City topped real estate rankings yet again. Furthermore, WalletHub named Oklahoma City the best large city to start a business, a key indicator of economic, population, and housing growth.
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Factors To Consider When Choosing The Best Places To Flip Houses
At the beginning of this article, we talked about how picking the most profitable market can be tricky, especially when the top market trends change every year. That’s why building wealth as an investor often requires spending a lot of time conducting meticulous research. The best places to flip houses are not always obvious and there are various factors to consider. Additionally, some markets that were at one point excellent places to flip houses eventually become concentrated with competition, making them no longer desirable. Because of this, the smartest investors take the time to discover up-and-coming areas to flip houses rather than jumping on an existing bandwagon.
Markets with low or decreasing unemployment rates coupled with significant job growth should be highly considered. These factors could be spurred by a burgeoning industry or the arrival of a notable company in the area, both of which are signs of an improving economy that will spur home-buying activity as well as eventual property value appreciation. It is also important to note whether or not there are nice neighborhoods where people will want to live in. Lastly, it is crucial to ensure that there is enough available inventory in the market.
Once these factors have been satisfied, you can zero in on financial factors, such as median purchase prices and the average cost of labor and remodeling in the area. These numbers will help investors calculate estimates for after repair values (ARVs) and profit margins. It is important to mind your due diligence in this aspect, as strong economic indicators do not automatically equate to favorable conditions for house flippers. However, once you’ve identified a market that promises strong economic growth and favorable real estate profit margins, you can feel confident about launching your property search.
Summary
The best cities to flip houses change every year, but the importance of market location remains consistent. The most successful investors get ahead of the game by regularly conducting market research and not simply following the crowds. Five years ago, the hottest house flipping markets were thought to be in the Midwest and southern U.S. These markets’ popularity has shifted over the years, offering investors profit margins in various areas across the country. I advise investors to look at the common denominators in these market shifts to make accurate predictions for the future. Only time will tell whether this year’s best house flipping markets remain on top; however, the investors who can conduct independent research and analyze market conditions can ensure they are well-positioned for years to come.
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The information presented is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing provided shall constitute financial, tax, legal, or accounting advice or individually tailored investment advice. This information is for educational purposes only.
