The real estate world is in a constant state of flux, as we all know. After the collapse of the housing market in 2008, values plummeted and there were thousands of foreclosed homes, sitting empty.
Smart investors started snatching up those homes, at bargain prices. They knew the major dip in the market wouldn’t last forever. The collapse enabled them to fix up/rent out these homes, because the rental market surged, everywhere. I was fortunate to be interviewed by CNN online and USA Today about the phenomenon: click on this section to view the whole article.
Well, those days are over for the most part, as the housing market everywhere has had a nice rebound. Now, it’s a lot more difficult to find a home, do the updates/rehab, and make much money on the flip. Inventory is down, the market has tightened up. And on a flip you have to consider these cautionary tips:Most of the time, you run into unforeseen issues after you start the rehab.
- It’s hugely important that you find a reliable contractor (if it’s not you) that will show up every day and complete the work on schedule.
- Don’t overspend on the amenities/updates. Stay above the surrounding homes, but don’t spend crazy money you’ll never get back.
- Be aware that the house may not sell immediately. And when the house sits, you continue to have all the carrying costs — insurance, taxes, utilities, maintenance , etc.
If you’re risk averse, flipping probably isn’t in your wheelhouse. Much safer to buy, fix up, rent out, and hold it for income and long term investment. Although I’ve flipped a couple along the way, I never depended on those “big returns” you hear about on HGTV and informercials. (They make it look way too easy!)
My best advice? Buy and hold here in Indy. Our market is super stable, and growing. Investors from all over the world are very interested in what Indy has to offer, with good reason!