Several real estate markets around the country are showing renewed investment promise for fix and flip investors looking for new opportunities. These markets are being fast-tracked by a combination of factors that investors should take note of when looking for their next ideal fix and flip investment. There are multiple unique factors that help investors identify these fast-moving markets and they make use of them to maximize their future earnings.
Some of these important aspects used by investors as measurement include low local unemployment rates, the presence of new job opportunities, available and skilled labor, and the materials needed for construction all play a part in real estate performance. Think about what draws people to city living, and why they are willing to pay the higher cost of living associated with it; these are the factors that will have a direct impact on the success of your real estate investments in that location.
It’s also important to note that while the best cities to flip homes can be anywhere you can make a worthwhile profit, these cities have performed exceptionally in recent times, earning their place in the spotlight and on this particular list. Based on the strength of recent performance, buyer power, and projected outcomes, here are some of the best cities to flip houses in 2020:
Raleigh, North Carolina
The local real estate market in Raleigh, North Carolina, is rapidly heating up and investors are definitely taking notice. Raleigh is a growing capital city and forms part of the North Carolina Research Triangle, known for making major advancements in both tech and biotech research in recent years. But that’s not the only thing the city of Raleigh is known for- at the end of 2019, Raleigh was rated as the second hottest real estate market in the country, ranked only behind Austin, TX in performance and real estate demand.
The Raleigh area is made up of around 1.4 million people, making it the second-largest city in the state and one of the most densely populated. This population is still expected to increase drastically over the next few years as millennials age up and trade in their first home for secondary family homes and Gen Z moves from student apartments to first homes. In short, this means many will soon be looking for properties to buy or rent in the Raleigh area. Despite the large local population and demand for real estate, prices for homes have remained relatively affordable compared to many other markets in the country.
On Zillow, the average single-family home in Raleigh is priced at $284,829, and this price is projected to increase by another 3% over the next year. Typically, properties in this area stay on the market for just over fifty days before selling, a good indicator that investors can move properties quickly after flipping them. The greater Raleigh area has a lot of desirable amenities for buyers and renters – the city is known for its richness in universities, museums, parks, and its foodie-heaven restaurant scene. In fact, Raleigh has regularly ranked as one of the best places to live in the US, assuring investors that a property bought here will perform well.
Home to the happiest place on Earth, Orlando Florida also has enough investment opportunity to keep real estate investors and buyers more than happy too. The Orlando metro area boasts a remarkable population of over 2.5 million people, but with a notably low unemployment rate of just under 3% despite this size. In the overall Orlando area, the average suburban home costs around $231,000, which is more affordable than many investors expect of this sought-after location.
The city is popular with buyers and renters of all ages due to the warm local climate, sandy beaches, large amusement parks, and other available attractions that keep people busy year-round. Real estate buyers also commonly flock to this area due to the quality of living given at a more affordable and reasonable price than many other areas around the country. With all these factors combined, Orlando is now quickly becoming one of the fastest-growing metropolitan areas in the country, with a large local and tourist population looking to purchase properties or rent homes, short and long term.
Thus far, Orlando has shown impressive real estate results, and investors can expect this trend to continue throughout 2020 and beyond into 2021. The average ROI for investors in Orlando amounts to near 80% and further growth is expected in the market as the military presence in the area increases and becomes in need of housing options.
It’s important to note that property prices in this area are steadily increasing along with the increased buyer interest, as are appreciation rates, but the cost of living will remain much the same as it is today. This means that buyers will be looking for deals that represent good value for money, but they will have the backing of a good local economy to support their real estate purchases.
Phoenix is one of the biggest cities in the state of Arizona and is one of the top ten largest cities found in the country. Phoenix was one of the cities originally hit hardest by the 2008 housing crash, but home prices have now recovered to their pre-bubble values and the area is ripe for real estate investment again. As of late, the Phoenix real estate market has been one of the areas with the highest appreciation rates in the country, a good signal for investors looking to gain instant equity with guarantees of increases if they plan to hold and rent a property.
Recent aggregated data has shown that single-family home prices in this location have increased by almost 7%, but real estate here is still more affordable than in other parts of the country and represents good value for both investors and their buyers or renters. Local property experts project that real estate in Phoenix will continue to grow at the same rate this year and continue to offer investment potential for the foreseeable future.
The single-family properties in this area have a median price of $257,500 and spend only 40 days on the market before being sold, a sign of the high demand for local real estate. With great weather, a ton of great outdoor spaces and nature-based activities to boot – this state has a lot to offer active buyers in terms of amenities. Not to mention that nearly every major sport is represented here, making it a great place for sports fans to buy or rent!
El Paso, Texas
El Paso, Texas is another market that is showing great recent potential for real estate investors to buy. El Paso for a long time has been known as an affordable market for single-family homes, and this still rings true in today’s local market. The El Paso area has a very strong local economy, powered by a population that is largely and steadily employed in government, healthcare and by the local military base that keeps buyer power in the city consistent.
The average home price in this area is a fraction of the cost of others on the list at $136,499, with the local real estate market showing an upward projection by nearly 5% in recent months. El Paso is a great location to flip houses due to the buyer power of the local population, the affordability of real estate in the area and the cost of renovation, which is lower than costs found elsewhere across the country – this combined adds up all the factors that drive a successful housing market going forward and makes a good space for property investment.
For buyers or renters, El Paso has the additional benefit of having plenty of job opportunities, a large population of young, employed adults, offering great schools and boasts some of the lowest crime rates in the country – all factors that indicate the potential for real estate investment and high buyer demand for homes. Similar to the city of Raleigh, El Paso has been ranked one of the best metro areas to live in, and as one of the safest, this location is ideal for young families just starting out.
The city of Denver has historically had a record of good real estate investment performance and the market has recently started to heat up even more. Denver has been found to have the lowest overall risk of a recession of any city west of the Mississippi and this is a good assurance to investors interested in buying there that their investment will be sound.
The average properties in this area are valued at $454,940 on average, and while not as affordable as other options on the list, with limited terrain available to build new properties it keeps both the home prices and demand for housing high in this area. Instead, redevelopment or house flipping is the name of the game here and offers a higher ROI to the investor.
The local population has been growing, and rental properties also perform well here due to the presence of a large student population that attends the multiple local universities. While the real estate market has fluctuated somewhat over the past month, buyer demand in this area remains high and is bringing more movement into the real estate market.
Denver also boasts a strong local job market and economy, bolstered mainly by established agriculture, manufacturing, mining, and tourism sectors found in the city. The tech sector in Denver has notably been expanding lately, with many major tech companies opening offices and hiring in the area and creating new jobs. With more job opportunities coming up through this sector, it’s likely that these workers will be looking for housing in the city as they join up with these tech giants.
Many cities across the country are showing good potential for fix and flip investors looking to make a good profit and capitalize on high buyer demand. Investors looking to profit from buyer demand should focus on the areas listed above due to all the driving factors pushing these markets forward and assuring better investment performance.
Raleigh, Orlando, Phoenix, El Paso and Denver all have their own unique benefits to offer fix and flip investors as some of the best cities to flip in, and whether it be a dependable local economy, a sudden abundance of job opportunities or affordable cost of renovation, every city on this list holds something for investors to get excited about.
At the end of the day, if you’re an investor looking for a good flip location, you should focus on finding locations with low rates of unemployment, good job prospects and consider the cost of both labor and materials and how it affects the performance of the real estate market.