The Biggest Reason You Don’t Want to Flip a House in Tyler
TV shows might make it look easy, but flipping a house is incredibly hard work and it's getting harder. There's one big reason why you don't want to take on a project right now in East Texas.
It's expensive! And house-flippers are seeing the lowest returns in 8 years, according to MSN.
It's not just the cost of the new carpet, granite countertops, and fixtures that go into the house flip. There’s the cost of the home and the renovations, and then you've got to add the taxes, insurance, and legal costs. MSN says returns on the investment have been falling for six straight quarters and are now that the lowest level since the end of 2011.
But here's the good news. If you've got the credit or the liquid assets to put toward a house flip, it can still be a good investment compared to other investment options. The average gross profit on a flip this spring was $62,700, and that's a 39.9% return on investment, after renovation and carrying costs, according to MSN. Who wouldn't welcome that? But there are risks involved. Like what if the house takes a year to sell? Can you carry it for that long?
House flippers always make it look so sexy on TV. Sure, they run into snags, but those are always resolved by the end of the 30-minute show and by then everything is sparkling and shining and attracting buyers. There are no cameras rolling on projects in East Texas that might take 6 months to finish and might bring in half of that average return because houses here are cheaper. Making $62,000 might be standard on a $750,000 house in California, but it doesn't sound so feasible here where the average cost of a home isn't near that high. We have less fat to trim.
If you're in the middle of a house flip right now, I didn't mean to be a Debbie Downer. I'm sure it will go well! It's not impossible. But if you're on the fence about it, just know exactly what you're getting into. Good luck.