Flipping Houses Is Back — With A Catch
Flipping homes was all the rage about a decade ago. The trend, by definition, is when someone buys a fixer-upper property, repairs it enough to make it habitable again, and quickly sells it to a new buyer, usually twice within a calendar year. But when the housing bubble burst in 2008, flipping came to a halt. Today the trend of flipping is back — with a catch.
The downside to house flipping is that buyers with an average budget are finding fewer homes with average prices. This shortage has made condominiums, or condos, one of the best places to invest in real estate.
Turn & Burn Condos
Condos often appear to be an easy investment opportunity for a property investor. Yet, as a long-term venture, condos rarely bring the type of return an investor wants. Here are three reasons why flipping a condo will likely provide a better return on investment than holding it for an extended time.
Condo Association Fees
Usually, the largest fees home investors in Gainesville are responsible for are annual property taxes and homeowners insurance. But if you own a condo, the monthly association fees alone may range from several hundred to several thousand dollars. These fees also require a significantly larger down payment. In other words, condo fees alone can easily reduce your ability to invest in other properties because they rarely go down from year to year.
Special Assessments
Special assessments, such as the installation of energy-efficient windows or HVAC units, can improve the condo. However, while the renter enjoys the lower utility bills, the owner — in this case, investor — is responsible for paying for the improvements. A special assessment, depending on the amount of money needed, can offset any returns for a year or more.
Supply & Demand
As any growing city, Gainesville’s housing demand depends on many factors, such as major employers moving in or out of it. Even though there’s always demand for rental housing from students at Santa Fe College and the University of Florida, demand for specific properties fluctuates depending on other rental options available. A realtor with Rabell Realty Group can help you look at supply and demand trends before buying an investment property.
Tips For Flipping Condos in Gainesville, FL
The appeal of flipping condos is that it can be done in a relatively short period of time and return a tidy sum of money to the property investor. But as long-time realtors in Gainesville, the team at Rabell Realty Group has seen many flips nearly become flops for many reasons. Here are three tips to keep in mind as you get ready to flip a condo.
Carefully Research The Resale Or Rental Value
A group of nearby condos selling or renting at one price doesn’t mean yours will be scooped up right away at the same price. One aspect that may be holding the condo back is new appliances. If it’s priced as a newly renovated condo but hasn’t received upgrades neighboring condos have, it may be harder to quickly flip.
Understand The Possible Extra Expenses
Real estate investing in Gainesville isn’t without extra expenses from time to time. For condos, this usually means monthly association fees and an increase in property taxes. But don’t let that dissuade you from flipping a condo or two — just make sure you understand every expense related to the property.
Budget Extra Time & Money For Repairs
Being optimistic about having a condo flipped on the timeline you created is great. But it’s also great to add a little extra time and money for repairs and maintenance that may crop up along the way.
Help for Home Investors In Gainesville
If you’re wondering how to invest in property, there’s a lot to learn and do. One of the biggest steps is finding a property, such as a condo, that suits your budget and goals. The team at Rabell Realty Group understands the ins and outs of the Gainesville real estate market and can help you find a condo perfect for flipping. Call us today!