In addition to the new construction boom going on which is seeing luxury developments and new high rise condos going up by the dozen the U.S. is experiencing a new home improvement boom too. What does it mean for real estate investors flipping houses?
Rising property prices and home equity are helping more homeowners to improve their properties. They are finally getting around to repairs now that they are more confident about staying in their homes and in keeping their jobs and others are putting up expansive new additions.
In fact mortgage lenders like Wells Fargo and Chase report their home equity lending volume up 20-30% in the last year, much of which is expected to have gone on home improvement projects.
Of course this is in addition to a glut of neglected homes and bank owned REOs which are being rehabbed by investors too.
According to a new NBC News and National Association of the Remodeling Industry (NARI) report this has resulted in 34,000 construction jobs were regained by the end of 2012.
While investors would rather homeowners sold out or bought new homes rather than improving or adding to current ones it still has great benefits for those flipping houses.
Each remodel improves communities and neighborhoods, increasing appeal, and helps to bring up values of surrounding homes. The added jobs and spending also mean more money floating around in local economies which fuel further job creation and in turn creates more home buyers.
Not only should investors flipping houses be more keen on building relationships with good contractors for their own work as business picks up, but need to recognize that being in the field all day these contractors can also be great sources of leads. Some may even be interested in partnering up to split profits; reducing upfront cash outlay and increasing volume, while having a contractor they can trust to do the work, do it fast and get it done right.