Why The Luxury Market Might Be Your Best Investment For House Flipping Right Now
House flippers focusing on flipping luxury homes are a part of a rising market. While non-luxury houses aren’t flipping as well, this market, if you can afford it is still doing well. Consider that the National Association of Realtors showed that sales of existing homes declined over ten percent in the last year. Starter homes, which are usually a common project for house flippers, are part of a decreasing market. Sales are just down among starter homes. Some of that is because of the higher interest rates too. Many people who house flippers would normally try to sell a starter home to just can’t swing mortgages with the higher rates. None of this is an issue with luxury homes though.
Granted, the luxury home flipping scene isn’t where it was at a decade ago, but it’s one of the areas still growing right now. So, house flippers that can afford to purchase luxury homes might have better luck.
Flipping Luxury Homes
Flipping of luxury homes has risen, according to Mansion Global. Last year, 2.6 percent of homes that were flipped were valued at more than $1 million. In 2017, these houses accounted for just 2.2 percent of the homes that were flipped. That might not seem like an impressive increase, but it should be compared to the fact that homes sales in general are declining.
House flipping is at a 10-year high all across the country, but most that’s mostly for luxury homes.
Check Out Florida Luxury Homes
Florida home flipping is looking great right now. House flippers are drawn to the tax relief in Florida after dabbling in house flipping in higher tax areas. The only issue in Florida is that the demand for homes to flip is outpacing supply. So, if you can get into that market, you should find it profitable.
(Scroll down for more on flipping luxury homes.)
Why It’s Easy For House Flippers To Market Luxury Homes
As a house flipper, you’re probably aware that marketing can be an important aspect of your business plan. Marketing luxury homes can be a piece of cake. Sometimes, luxury home sales even get free marketing when the house has been a feature in its community. Magazines often pick up luxury homes too. When the media gets involved, you can get a lot more attention from buyers, speeding up the time it takes to flip the home.
It’s also easier to flip a luxury home because luxury homes are often better maintained than the average home house flippers try to sell. This can mean much less rehabilitation work. Sometimes, it’s only a matter of very superficial maintenance or lawn care. Luxury homes are also located in nicer neighborhoods that are kept up well. Location, as we all know, can make all the difference in selling a home quickly.
Flipping a luxury home means that you will have less competition when you’re putting in offers. See, the new investors and big investment funds try to focus on midrange rentals. Few put their money into luxury homes. Less competition means bigger discounts and more time to complete due diligence. You will have more time to negotiate when you’re trying to pick up a luxury home to flip.
Lastly, your target market is having an easier time scoring mortgages. See, there’s been a surge in jumbo mortgage lending. Why? Bigger loans are actually becoming easier to get compared to more average home loans. These buyers want a turn key home. They do not want to do maintenance of any kind of their luxury homes. So, while you will have less competition when buying an even superficially distressed luxury home, you will have a growing buyer pool for your newly shined and polished luxury home for sale.
Are You Looking for a Hard Money Loan to Flip a House Or Buy A Rental Property?
Paces Funding is a hard money lender offering hard money loans to purchase and renovate non-owner occupied residential and commercial properties throughout the Atlanta, Nashville, Florida, or the North and South Carolina metropolitan areas. Our application process for hard money loans is easy. Just fill out this very simple online form and you will be contacted shortly. Unlike other lenders, the window between applying and funding is very small. We have funded properties in as a little as one day, but typically funding hard money loans takes about seven to ten days.
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.