What’s the Deal With the Flipping Craze?
With the popularity of house flipping shows, it’s time for a real estate agent to give his opinion about this type of investment.
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Today I’m going to answer a question real estate agents commonly hear in the business: What do you think about the ‘flipping craze’?
I think it’s a good thing for the housing market in general. Obviously, certain TV shows you see helped push the craze along; now everyone wants to be an investor.
Flipping is fairly profitable right now for investors who know what they’re doing. What those shows don’t show, however, is that quite a few flippers are losing money. Like any business, flipping is an investment, and investors who are too optimistic (especially in this environment) will often lose money. But overall, it can be positive.
Flipping is fairly profitable right now for investors who know what they’re doing.
Flipping was different even 10 years ago—people would buy houses and sit on them, hoping it would appreciate over time. But it wasn’t working quite the way they wanted it to because a lot of homes were sitting vacant.
Flipping right now consists mostly of adding value to the bought property, which can involve remodeling the kitchen or bathroom, or adding square footage, and then reselling it.
In places like here in Chicago, we have a lot of older homes built in the 1960s and 70s, and those homes would benefit from remodeling. Flipping in areas like these would really help the market, especially because new construction is not meeting demand. Construction builders aren’t able to supply enough stock to the market, so flipping, if done right, actually helps the market.
So again, I like the idea that a lot of people are jumping into to it, and of course I feel sorry for those who are losing money on projects. It can really benefit investors who know what they’re doing, and ultimately, buyers.
If you have any questions about house flipping and whether it’s a smart investment for you, don’t hesitate to give me a call or send me an email. I’d be happy to speak with you.