Where aspiring home flippers can find good returns in quality neighborhoods
You’ll flip over this.
As home prices in many cities near historic highs, many aspiring buyers have likely shelved their dreams of buying a home in a solid neighborhood and selling it for a big profit. But a new analysis by real estate data firm ATTOM Data Solutions may make you rethink that.
The company analyzed more than 5,000 zip codes to look at places where homes were affordable for buyers making the median income in the area, and there was home price appreciation from first quarter 2016 to 2017 — and that had a combination of quality schools, relatively low crime and unemployment, few environmental hazards and/or reasonable property tax rates. “This speaks to neighborhood quality, which affects the quality of your life and your investment potential for the home,” explains Daren Blomquist, the senior vice president of ATTOM, as to why they chose these factors.
Their conclusion: The No. 1 quality neighborhood to buy a home with good returns is in the 28037 zip code of Denver, North Carolina — a town of 2,300 residents roughly 35-40 minutes from Charlotte. What makes this neighborhood so appealing? Homes here are affordable (roughly $250,000), there is below average crime and above average schools.
Top 5 quality neighborhoods for good real estate returns
(Flippers are defined as people who bought and sold within a year; these flippers sold sometime in 2016)
1. Denver, NC – 28037 zip code:
Flippers average gross profit was $211,500 (a 436% return on investment)
2. East Stroudsburg, PA – 18302
3. Sussex, NJ – 07461
4. Bethel Park, PA – 15102
5. East Stroudsburg, PA – 18301
* Profits are gross, and thus do not include any costs put into rehabbing the house
Pennsylvania towns, particularly East Stroudsburg, also cleaned up on this list — which Blomquist attributes to their affordability (median homes cost $130,000 in these zip codes in East Stroudsberg), low crime and slightly above average schools.
And just because flippers who sold in these five neighborhoods in 2016 made huge profits doesn’t mean there’s not more of that to come this year. Those profits are “an indication that there is still opportunity in these neighborhoods to find good deals,” says Blomquist. “They are still somewhat undiscovered.”
Of course, there’s plenty of risk to flipping a home: Many buyers may have to spend to rehab a house, for example. And experts say you should, in general, stick to markets you know, do a ton of research on homes and prices in the area, and have a true understanding of what it costs to renovate a home.
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