Despite its diminutive size, the Ocean State is brimming with opportunities for fastidious real estate investors.
Famous for its spectacular sea side mansions, iconic light houses and beautiful beaches, Rhode Island could be the perfect place for you to flip your first house. In this simple guide, we will present a few facts that you should know about flipping houses in RI before you take the first step.
Key House Flipping Stats RI
Median Purchase Price
Median Resale Price
Total House Flips In 2019
Median Household Income
High School Graduation Rate
Average Travel Time To Work
Top 5 Cities for Flipping Houses
- East Providence
Top 5 Safest Cities in Rhode Island
- Portsmouth – Safety Score: 90.44
- Narragansett – Safety Score: 90.08
- Burrillville – Safety Score: 89.96
- Bristol – Safety Score: 89.86
- South Kingstown – Safety Score: 89.71
Top 5 Areas with Best Public Schools
- East Greenwich
- North Kingstown
Please note – All the statistics in this article are based on 2019 data. You can view the data sources at the bottom of the article.
What You Need To Know About Real Estate In Rhode Island
On average, Fix and Flip investors in Rhode Island are making $75,500 in revenue per flip. This suggests that the potential for completing a successful flip is quite high, especially if you study the local markets carefully and keep your rehab costs under control.
Single-family homes are the most sought-after property in this area, and the residential sector continues to perform well overall. The median home value in Rhode Island is $302,406, and the market is currently in a solid growth phase. Property prices increased 3.4% over the last year, while analysts are predicting that house prices will increase by over 4% over the next 12 months.
The top 5 RI real estate markets are Providence, Warwick, Cranston, Pawtucket and East Providence. Given the relatively high levels of activity in these areas, it might be helpful for you to focus on these cities first, before moving on to less established house flipping markets.
Simple Tips for Flipping Houses in RI
House flipping is when an investor purchases a property for the sole intention of rehabbing and reselling it for a profit. This is a lucrative investment strategy – there is the potential to make a profit quickly, and get immediate equity if the investor selects the right property and stays on budget.
Fix and flip investors in this area either use their own personal funds or take a loan from a hard money lender. Banks don’t typically fund this type of transaction due to the risk involved, and not wanting to manage a property in case of non-payment.
Fix and flip properties are typically older, character properties which become more valuable through home renovation. Hard money lenders offer investors a variety of benefits such as fast loan approvals and closing. Every real estate investor should aim to keep to the 70% rule, which guides investors to pay only 70% of a property’s after-repair-value (ARV) without the cost of repairs added.
The final ARV amount dictates a property’s final value after the renovation has been completed. Other factors that influence the value of a property will include the size, where it is located and the prices of other similar homes in the area. If you want to know more, this guide further explains how to calculate ARV.
Hard money lenders like New Silver offer interest rates and terms that cater specifically to these types of real estate projects.
How To Find A Property To Flip
As a real estate investor hoping to flip houses in Rhode Island, it should comfort you to know that demand for local properties is growing. Affordable housing is in particularly high demand with a demographic of buyers that is largely made up of millennials. As a result of this demographic, starter homes and secondary single-family properties are highly sought-after.
The old adage goes, the three most important things in real estate are location, location, and location. To find a good fix and flip property, you should carefully research the performance of local areas you are interested in. You will want to determine what the average housing prices are, what renovation one would cost you and why it would be attractive to potential buyers. You’ll also want to avoid properties that have bigger structural issues or need major repairs, as these can be costly to repair.
Armed with the most recent market-related data, fix and flip investors in RI can better maximize their returns. House flipping is a profitable method of wealth-building for investors, and the Rhode Island real estate market assures them of good returns if they choose a property wisely. The local market is projected to continue on an upward trend, and investors can capitalize on this opportunity with funding from New Silver by applying and getting loan approval online in under 10 minutes.