Ready to flip? Here are America’s best and worst cities for DIYers
House flipping remains a lucrative yet competitive business. As home prices are increasing steadily, now may be the perfect time to find a fixer upper that could offer you a significant profit.
Recently, WalletHub conducted a study in which they ranked 172 cities on the basis of remodeling costs, renovation costs, market potential, and quality of life of city dwellers. The findings are encouraging.
The gross profit of flipping an average U.S. home was reported to be an impressive $63,500 during the first quarter of 2021.
Criteria Considered in the Making of the List
The “market potential” of each city had a huge impact on its ranking. WalletHub investigated the state of the market prior to the pandemic and the impact afterward. The report specifically analyzed the impact of COVID-19 on the return of investment (ROI) in the housing market.
Another major criterion that the report is based on: the purchase price in each city. They compared prices and real estate taxes in 2020 with the preceding year.
What makes this list effective is the third factor: “quality of life”. In this category, WalletHub compared economic growth, unemployment rate, crime rates, local schools, jobs, and other factors that determine the quality of life.
The fourth and final factor which decided the position of each city in this list is “renovation and remodeling costs.” This is a significant variable that also plays a crucial role in buying or selling a home.
DIYers and real estate developers should be wary of the fact that shortages of materials such as lumber could inflate the initially projected costs.
10 Best and Worst U.S. Cities for House Flipping
Owing to a better quality of life and low renovation costs, Sioux Falls, S.D., has been ranked by WalletHub as the best city for home flipping. Newark, N.J. was ranked quite low as it didn’t perform well across all three criteria mentioned before.
In what was perhaps a surprise showing, Mobile, Ala. turned out to be the favorite city of budget-conscious house flippers. With the lowest renovation costs and median purchase price, it landed in the sixth position on the list.
When it comes to ROI, however, Pittsburgh emerged victorious. The right balance between renovation costs and home values worked in its favor.
Here’s a list of best cities for DIYers, according to the folks at WalletHub:
- Sioux Falls, S.D.
- Missoula, Mont.
- Peoria, Ariz.
- Nampa, Idaho
- Tampa, Fla.
- Mobile, Ala.
- Boise, Idaho
- Rapid City, S.D.
- Gilbert, Ariz.
- Knoxville, Tenn.
The WalletHub study identified the following cities as the worst places to flip homes in the United States:
- Oxnard, Calif.
- Wilmington, Del.
- Jersey City, N.J.
- New York
- Los Angeles
- Bridgeport, Conn.
- San Francisco
- Yonkers, N.Y.
- Oakland, Calif.
Of course, there are risks involved whenever you choose to flip a home; caution is advised before making any investment decisions (even in the most competitive of markets!)
Thinking about flipping a home, or have you flipped one recently? Share your plans with us in the comments.