As our housing market declined in 2008, so did the people who love house flipping (that is, to buy a fixer-upper, fix it up, and then sell it for a profit). But now, our market is improving, and so are the instances of house-flipping. Yahoo confirms that house flipping is on the rise, up about 12% since 2011. Low inventory, stricter lending practices, and the recent market dip have essentially changed the rules for home-flipping, and the rules all say, “Be More Careful.”
Yahoo’s list of new rules for the house-flipping economy are:
1) that we should choose our locations very carefully, as not all are equal (Orlando, Florida; Richmond, Virginia; Tucson, Arizona; and Charlotte, North Carolina, according to RealtyTrac, are the best).
2) Can you do it with cash? Because lending is still strict and it’s faster and easier to pay in cash for both the property and the renovations.
3) Stick to a budget, because even though you’re flipping a house, you still need to be conservative about how you spend.
4) Be prepared to wait at least 90 days after completing renovations to selling, because of paperwork, additional appraisals, and more paperwork. You may even want to think about renting it out for a while as you wait so you don’t lose money.