House flipping is a very exciting career and hobby to pursue and with all these HGTV shows it has really raised the question – how much money are they really making? There are a lot of things that need to be answered before we can identify how much money an individual flipper makes. It depends heavily on how many flips they are doing. The location of these flips and also how much their initial investment is.
The most important thing for any house flipper is managing their expenses. On TV shows, they don’t show all the expenses as they should. For example, property taxes and mortgage fees are one of the more expensive overlooked charges. Holding onto a house to flip for a couple of months can accumulate a lot of debt. The most obvious expense when flipping a home is renovation costs. Smart flippers can predict this ahead of time and know how to cut costs. If you want to learn more about cutting costs this article “Flipping Homes: 11 Ways to Cut Renovation Costs” is for you!
The location of the flip is extremely important! Flipping a house in the center of New York City vs. the middle of nowhere will result differently. Picking the perfect location to flip is easier than expected. Wallethub made a chart of the best locations to flip, based on “Market Potential,” “Renovation and Remodeling Cost,” and “Quality of Life” in those cities. They ranked over 170 cities and formed it into an easy-to-read list. Check out the list here.
How much do they make on average?
The overall income of house flippers varies from quarter to quarter. Typically the first quarter is the lowest of profitability and Q2 and Q3 are the highest. According to data collected by ATTOM Data Solutions Q1 of 2019 the average flip grossed a profit of $60,000. This is predicted for an individual flip. If a typical flipper flips a house each quarter, they are bringing in nearly $250,000 a year. This is also one of the lower quarters in recent history due to low home sales. Another thing impacting the gross profit is that interest rates are dropping and housing prices are steadying out. The decrease in house flipping is not across the board though, in cities such as Raleigh, North Carolina they have seen a year-over-year increase in house flipping and a good Q1 for a gross profit of flips. If you would like to read in more detail about the house flipping market this article by ATTOM Data Solutions provides more insight “U.S. Home Flipping Rate Reaches a Nine-Year High in Q1 2019.”
If you are interested in learning more about house flipping check out our blogs here: https://bsyl.ink/Zinc-Blogs. Also, if you are looking to flip a house in the future, get in touch and let’s talk about financing. Contact us here: https://bsyl.ink/Zinc-ContactUs