Today’s Crazy Housing Market Is The Best Opportunity For House-flipping
The housing market has been going wild these past few months, with homes flying off the online listing sites like clockwork, receiving multiples bids and offers, and only taking around a week before it’s off to the next property; real estate investing has absolutely stolen the spotlight. And while many other financial instruments remain a strong contender for huge margins of ROI, such as stocks and the rise of cryptocurrency, there’s no denying that current market indicators make it near impossible not to be intrigued by the current housing market situation.
However, instead of focusing on the traditional buy-and-hold strategy of searching for properties to stick with the long term and biding our time for appreciation, we’ll be going over the advantages of fixing and flipping houses amid this crazy real estate space. And because locking too much capital in one investment property is not as ideal given the circumstances, house-flipping strategies might very well be the most optimal means of making the most out of these real estate opportunities.
Real Estate Demand Indicates A Prime-Time Seller’s Market
Firstly, there’s no better time to sell your home fast than in today’s market because real estate demand is at an all-time high, meaning that liquidating your asset won’t require as long as a holding time. And for real estate investors that utilize house-flipping strategies, there’s no better advantage than having properties sell like crazy because you won’t have to be tied down for as long, immediately secure your profits, and can continue to the next house-flipping project. Of course, there’s no denying that your profit margin will be at the mercy of short-term capital gains, but the volume of properties you can work on, given this opportunity, can quickly make up for the costs incurred.
Skyrocketing Home Prices And Mismatched Housing Supply
Secondly, apart from the obvious demand for real estate, skyrocketing home prices and mismatched housing supply follow a textbook principle of supply and demand that allows sellers to guarantee very lucrative price points. Therefore, even if you have to allocate a bigger budget as per usual for renovations and the procurement of the property itself, the final selling price can cover every expense made and more. Likewise, this indicator does denote a need for a much larger capital, but because we are still in the middle of a global pandemic winter, every aspiring investor would have ample time to build and ride the wave of the roaring ’20s when it arrives.
Homeownership Trend Blended With Affordable Financing Rates
Finally, disregarding the technical points and analysis, there’s a fundamental trend for homeownership and the vast majority of people who want to utilize the affordable mortgage and financing rates available today. In fact, the latter of the two holds so much pressure and momentum that first-time homebuyers are willing to give up on that dream house so that they can secure a property at a better price. Plus, accounting for the indirect impact of remote work and households now discussing the option of remaining at home well after the pandemic’s grasp on the world subsides, it appears nothing will stop this trend of homeownership as the younger demographic demands to settle down.
Of Course, It’s Not Just The House-Flipping Market
With all points considered, none of these indicators are saying that only house-flipping benefits from the current market situation, and there exist many other real estate investing methods you can employ to come out of this predicament with a profitable outcome. Hence, it would only be fair to discuss other relevant advantages that might be more inclined to your expertise or more accessible to you other than fixing and flipping homes.
- Rents Are At Increasing: While home prices have been surging all across the board, rents have been steadily increasing in proportion and are also modestly breaking all-time highs in their regard. There’s also a great number of people who want to refrain from entering the real estate market as a whole due to fears of a housing bubble and, therefore, increasingly prefer the option of renting a home instead. As a result, opportunistic real estate investors can also profit from allocating their capital into rental apartments, properties, and complexes.
- Construction Of New Housing Units: When we mentioned that housing supply was at an all-time low, we meant that it was in such dire straits that it would need millions of new housing units to appease current demand. And, as a result, this would mean that it’s very likely you would be outbid for any existing property you find available. Therefore, for any real estate investor equipped with a larger capital, it’s not too far-fetched of an idea to allocate funds for new housing developments for the long term.
Determining Your Appropriate Risk Appetite.
Overall, given the uncertainty of the current housing market, it all boils down to determining your own appropriate risk appetite. Therefore, if you’re willing to take up the mantle of house-flipping and are fairly confident in your skills, then the benefit of investing will far outweigh the threats carried by this opportunity.