Best Markets For Flipping Houses 2018

Key Takeaways

  • The best place to flip homes isn’t necessarily a city with the best profit potential, but rather anywhere you are able to make a profit that is worthwhile.
  • The top three markets to flip homes in 2018 were in South Dakota, Indiana and Texas.
  • The best markets to flip houses typically suggest profit margins that are well worth the cost of admission.

I want to make abundantly clear: The best markets for flipping houses is essentially anywhere you can make a solid return on investment. You don’t need to make six figures on every flip if the price of entry is minimal enough. Of course, everyone dreams of the day they will flip one property to make a couple hundred thousands of dollars, but that’s not always practical; sometimes you need to take what a market gives you. Fortunately, there are still markets offering great entry points; some would argue they are the best markets to flip houses. So if you are looking for the best place to flip homes, look no further. Below you will find a list of the cities a lot of investors have found success in.

Factors To Consider When Choosing The Best Places To Flip Houses

Building wealth as an investor often requires spending a lot of time conducting meticulous research. The best places to flip houses are not always obvious, as there are various factors to consider. Additionally, some markets that were originally excellent places to flip houses will become concentrated with competition, no longer making them desirable. Because of this, some of the smartest investors will spend time figuring out up-and-coming best areas to flip houses, rather than jumping on an existing bandwagon.
Two indicators to consider first are markets with a low or decreasing unemployment rate, coupled with significant job growth. This could be spurred by a burgeoning industry, or the arrival of a notable company in the area. These are all signs of an improving economy that will spur home-buying activity, as well as eventual property value appreciation. It is also important to note whether or not there are good neighborhoods where people will want to live, along with an inventory of properties on the market. Once these factors have been satisfied, an investor will zero in on financial factors, such as median purchase prices, and the average cost of labor and remodeling in the area. These numbers will allow for calculating estimates for after repair values (ARVs) and profit margins.


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Best places to flip houses

Best Markets For Flipping Houses 2018

Now that important factors to consider when choosing the best market to flip houses have been discussed, it is now time to put those factors to the test. Below you will find a list of the 2018’s best markets for flipping houses. These markets were selected based on factors such as the attractiveness of local living, median purchase prices, and average remodeling costs. However, investors should note that they should always conduct their own analysis. Profits can be made in almost any market, as long as you know where to look. However, if you want to know what experts think are the best areas to flip houses this year, explore the following list and corresponding descriptions:

  • El Paso, TX
  • Sioux Falls, SD
  • Fort Wayne, IN
  • Peoria, AZ
  • Oklahoma City, OK
  • Tampa, FL
  • Grand Rapids, MI
  • Boise, ID
  • Greensboro, NC
  • Springfield, MO

El Paso, Texas

El paso texas

El Paso, Texas tops the list of this year’s best places to flip houses, namely due to its notable market potential. According to U.S. News, this Texan locale scores a 7.2 out of 10 for quality of life, and was ranked as the fifth best place to retire in the nation. Over seventy Fortune 500 companies are based in the area, which is also considered the fourth largest manufacturing hub in the U.S. According to Zillow.com, The median home value is currently at $123,400, which had a year-over-year increase of 3.6 percent. These statistics, coupled with low renovation and remodeling costs in the area, offer strong return-on-investment potential for investors.

Sioux Falls, South Dakota

Sioux-falls-south-dakota

Nicknamed the “Best Little City in America,” Sioux Falls has attracted a spotlight for its low cost of home remodeling and a median home value of $183,500. Due to the city’s lack of a state corporate income tax, Sioux Falls serves as home to many notable financial companies, and also features a robust regional healthcare industry. A great quality of life, as well as an impressive 8.8 percent increase in home values in just one year, make this locale a promising one.

Fort Wayne, Indiana

Fort wayne indiana

Fort Wayne is located in northeastern Indiana and is just 18 miles from the Ohio border. Investors should make note of the city’s strong growth in property values, which are forecasted to increase by 10.6 percent in the next year. With the lowest average bathroom remodeling costs in the nation, Fort Wayne positions itself as a strong candidate for house-flipping.

Peoria, Arizona

Peoria arizona

Named on of the top 100 places to live by Money Magazine at one time, Peoria is known for a resort and leisure lifestyle. Located just outside the Phoenix metro area, Peoria also serves as home for the San Diego Padres and the Seattle Mariners during spring training. This Arizona city is featured as one of the cheapest places to renovate and remodel property in the nation, with median home values that have increased steadily over the past 6 years.

Oklahoma City, Oklahoma

Oklahoma city oklahoma

Oklahoma City is known as a regional economic center, with a diverse range of sectors such as information technology, health services and administrations. Notable corporations such as Dell, Hertz, Cox Communications and Boeing call OKC home, to name just a few. Median home prices in the area are just $125,900, with a steady growth of 1.7 percent. With very reasonable home renovation and remodeling costs, combined with a good quality of life, Oklahoma City continues to top real estate rankings. Furthermore, WalletHub named Oklahoma City as the best large city to start a business, a key indicator for future growths in the economy, population and housing demand.

Best Markets For Flipping Houses 2017

2016 was a great year for the housing market in the United States, and the outlook continues to look promising, especially for real estate investors specializing in house flipping.

Typically referred to as “flipping” or “house flipping,” the practice is generally defined as buying and selling a home in the same calendar year. According to a recent report by real estate information company RealtyTrac, home flipping increased in 75 percent of U.S. markets, yielding an average gross profit of $55,000 nationwide — the highest average gross profit for homes flipped nationwide since 2005.

“Not only is the share of home flips on the rise again, but we also see the flipping trend trickling down to smaller investors who are completing fewer flips per year,” said Daren Blomquist, senior vice president at RealtyTrac.

“The total number of investors who completed at least one flip in 2016 was at the highest level since 2007, and the number of flips per investor was at the lowest level since 2008.”

When all is said and done, the best place to flip homes is essentially anywhere you can make a profit. If for nothing else, each city will present different challenges, each of which may be easy or difficult for investors cut from a different cloth. In fact, I could argue that every city in the US housing market boasts some potential. However, if you are looking for the best place to flip homes — the one with the most potential — you may want to consider at least one of the following cities:

  • Ocala, FL
  • Memphis, TN
  • Tampa, FL
  • Detroit, MI
  • Miami, FL

Ocala, Florida

ocala floridaFlorida continues to be the mecca for flipping houses, as home values in the state have risen by 7.5 percent over the past year, while values remain 30 percent below peak prices. Ocala, a small city located in Northern Florida, ranks second and third respectively in terms of flipping volume and flipping returns. According to RealtyTrac, house flips in the area accounted for eight percent of all sales. For real estate investors, Ocala has generated a 73.9 percent return on investment (ROI).

“Flippers ideally want to buy distressed homes that provide them with an opportunity to add value in markets where there is good affordability and ample demand from buyers for the finish flip product,” said RealtyTrac Vice President Daren Blomquist.

Memphis, Tennessee

memphis tennessee Memphis has all the traits to be very attractive for homebuyers and house flippers. Ranking number one in terms of home flipping volume and ninth in terms of flipping returns,
The Blues City had 20 percent more homes flipped in 2015 than 2005, with home flips accounting for 10.6 percent of all home sales, while return on investment average 54.8 percent.

Tampa, Florida

tampa florida Tampa Bay has become a hotbed for millennial homebuyers. The area, which has seen a 65 percent surge in homes purchased by millennials since 2013-2014, has become a wonderland for real estate investors in terms of house flipping. Home flips in the metro area accounted for 7.4 percent of all home sales, delivering 57.2 percent return on investment for investors.

Home prices in Tampa appreciated by 5.2 percent last year, while the median home price is down to $141,000, down from $210,000 in 2006. RealtyTrac ranks Tampa fourth for flipping volume and sixth for flipping returns nationally.

“There is still a need in this recovering real estate market for move-in ready homes rehabbed to more modern tastes, particularly given the dearth of new homes being built,” said Blomquist.

Detroit, Michigan

detroit michigan As the poster child of the foreclosure crisis during the Great Recession, Detroit has become a safe-haven for real estate flipping. Home prices in Detroit remain 20 percent or more below peak values, while prices continue to appreciate by 10 percent annually.

According to RealtyTrac, approximately 6.5 percent of all sales in Detroit were flips during the first quarter of 2015, with investors making an average of 58.3 percent return on investment. More than half the homes flipped sold for between $100,000 and $300,000.

“It’s good for the area; it’s good for investors,” said Howard Mitchell, a Detroit broker. “The market is improving. Values are starting to come back up again in certain neighborhood. It’s good for investors when you can buy property and turn around and sell it for a profit.”

The outlook for Detroit continues to look very savory for investors. Along with the unemployment rate dropping to below seven percent, the University of Michigan predicts Detroit will add roughly 60,000 new jobs in 2015, including another 73,000 in 2016. All great signs for the housing market.

Miami, Florida

miami florida The allure of Miami’s real estate sector is indisputable. The metro area of Miami had the most homes flipped of any market nationwide, with 10,658 homes flipped in 2015 — representing 8.6 percent of all Miami-area sales. Things are only going to get better.

Over the past year, house flipping in Miami has been on the rise, as activity has increased from 4.7 percent of all sales to 6.4 percent. Miami ranks third in terms of flipping volume, according to RealtyTrac.

In addition, the market median price for Miami has significantly dropped, falling to $283,000 in 2015 compared to its peak of $373,000 in 2007, making the Magic City a very, very opportunistic area for house flippers.

House flipping continues to be a very popular and lucrative practice–no matter where the location may be. However, it’s important to remember the cardinal rule: location, location, location. Making a habit out of finding the best markets for flipping houses will prove to be beneficial.

What city have you been the most successful in? Share your answers below:

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