A lot of real estate investors lost money when the housing market crashed years ago. However, now that the market is recovering, the time is right to start flipping again, and there are several good reasons to consider this investment option.
1. Market Recovery
Both the economy and the housing market are in full recovery mode, which means more and more people are looking move out of their rentals and purchase homes. That makes now an excellent time to think about finding a great deal on a fixer-upper that you can sell at a profit.
2. Lack of New Construction
When the bottom dropped out of the housing market nearly a decade ago, new construction projects all but ceased. Now that more buyers are looking, new construction is on the rise, but the industry has been slow to rebound.
The result is a seller’s market. If you can find run-down properties to fix up, you can take advantage of the gap in new construction by providing updated homes to hungry buyers.
3. Low Interest Rates
The prime is starting to increase, bit by bit, and mortgage interest rates are following. That said, rates are still relatively low.
As a flipper, you probably don’t plan to pay more than a month or two of your mortgage before selling the property. Just in case, though, having a low interest rate couldn’t hurt.
4. Loans are on the Rise
Traditional lenders tightened the purse strings when the housing market bubble burst in 2007, launching the economy into recession. These days they’re easing up some on mortgage loans, but even if you’re unable to get a traditional loan, there are other options like hard money loans to consider.
Whether you want to refinance investment property so that you can fix it up and sell it or you’re interested in purchasing a new property to flip, you may find hard money lenders more accommodating than traditional banks. These investors are more interested in the capital or collateral you provide, as well as your plan, than they are in, say, your credit score.
So if fix and flip financing is what you need, you now have more options than ever to help you make a real estate investment that will show fast returns.
5. Real Estate is an Investment
Flipping houses is just one way to invest in real estate. Even if you refinance rental property with the intention of flipping it, you could always continue to rent it out and earn a passive income if a sale doesn’t materialize.