Looking to Flip Houses in the U.S.? Here are the 10 Best States, with Half in the South
House flipping, the art of buying properties with the intention of reselling them for a profit, has grown increasingly popular, and finding the right location can turn it into a highly lucrative business venture. The U.S. housing market presents vast opportunities for house flippers, and the handcrafted furniture company Joybird set out to discover the best states to optimize returns on this investment.
Analyzing the Real Estate Market for House Flippers
Joybird analyzed 11 essential factors across real estate markets throughout the United States, using information gathered from sources like Zillow, Redfin, the U.S. Bureau of Labor Statistics, and other real estate data providers. The analyzed factors are critical in assessing the potential profitability of house flipping and include:
- Median Home Price: Reflecting the average market value.
- Average Price of Fixer-Upper Homes: The price tag of homes needing renovations.
- Number of Fixer-Upper Homes: Available homes for flipping.
- Median Days on the Market: Indicating how long properties typically take to sell.
- Home Flipping Gross ROI: The overall return on investment for flipping houses.
- Property Tax Rate: A significant expense to be considered.
- Average Kitchen Remodeling Cost: A typical renovation cost.
- Average Bathroom Remodeling Cost: Another common renovation expense.
- Number of Real Estate Agents: Availability of experts in the field.
- Number of Construction Managers: Management of renovation projects.
- Number of Construction Laborers: Availability of workers for renovation.
The Top States for House Flipping: Spotlight on the South
Interestingly, five of the top 10 states from Joybird’s ranking are located in the South, signaling that this region of the U.S. holds promising prospects for home flippers.
1. Louisiana: A Prime Location
Louisiana ranks as the number one best state for flipping houses, scoring an impressive 41.1 out of 50 in Joybird’s evaluation. With an average price of fixer-upper homes at $196,763 and a significant construction labor force, it’s no wonder the state stands out. The flipping gross profit in 2022 was $75,000, with a gross ROI of 55.6%, marking a 3% increase since 2021. Furthermore, Louisiana offers a low property tax rate of 0.55%, noticeably lower than the national average of 0.99%, enhancing its appeal to potential investors.
Top 10 Best U.S. States for Flipping Houses
- Luisiana
- Michigan: Coming in second with a score of 38.3, Michigan’s 2022 flipping gross profit was $58,247, and the gross ROI was 51.70%. The average home value is $235,361, an increase of 2.3% over the past year. The median days on the market were 17 days, up two years over year.
- Alabama
- Delaware
- Ohio
- Pensilvania
- Maryland
- Mississippi and Virginia (tie)
- Mississippi and Virginia (tie)
- Florida
The report’s findings underline the potential that specific locations, particularly in the South, hold for house flippers. By assessing various economic and real estate factors, Joybird’s analysis provides valuable insights for investors seeking to venture into the house-flipping business. Whether you are an experienced real estate investor or a newbie in the house flipping industry, understanding these factors and focusing on the regions that offer favorable conditions could lead to substantial profits and business success.
