House flipping isn’t dead. While the profits have been dropping for the past eight years, American house flippers can still earn hefty sums. For successful projects, however, you must know the best places to flip houses in the United States.
What to look for when choosing where to invest? What are the criteria that can help you make smart decisions? Where should you start your house flipping journey?
Learn all about flipping houses in the US in this comprehensive guide. Not only will we analyze each state’s house flipping potential, but also teach you the basics of how to recognize favorable markets.
How We Determine the Best Markets for Flipping Houses
Knowing how to analyze the house flipping market is crucial for those who want to profit from this activity. Below, you can find the criteria we use to determine which are the best and the worst markets for flipping houses.
- Homeownership rate – This rate shows how many households own their homes as opposed to renting. House flipping makes sense in communities where families have the purchasing power to invest in their homes. States with low ownership rates, however, attract residents who prefer renting. Meaning, the chance of making a living flipping houses there is low.
- Median household income – Another vital criterion that defines the purchasing power of families in a specific region. The more money households make in a given state, the higher the chances for you to sell houses to them. So, the best places to flip homes are those with higher median household income.
- Home value – Flipping properties can generate more profit in markets where the average home price is high. We prefer, therefore, states where homes are worth more. Plus, a high average market value signals that the demand in that state is high. This also improves your chances of selling a house there. We consider the expected changes in the home value index, too. Due to the coronavirus pandemic, Zillow’s forecasts expect most US house markets to drop. Still, while some markets have forecast decreases of about 4%, others are expected to drop by only 0.2%.
- Median monthly housing costs – The importance of median housing costs per month is two-fold. First, families prefer investing somewhere where the housing costs aren’t soaring. It’s a logical financial decision. The best cities to flip houses, therefore, have low housing costs. Second, it affects your costs while flipping the house. Most properties stay on the market for at least 70 days, during which you pay such expenses.
- Average full home remodeling costs – This is essential information for house flippers. You don’t want to spend thousands of dollars on remodeling, especially not in markets with a low average sale price. To earn a reasonable flipping houses salary, you need to fix properties for a reasonable cost.
- Number of realtors – The best places to flip houses have an active real estate market. States with more realtors have better chances of selling properties fast. If there are only a few realtors, that’s a sign that the market isn’t attractive there.
- Average listing and sell price – Another key criterion that shows your flipping houses profit potential. The average listing price reveals how much money sellers expect for their properties. The average sell price, by contrast, shows the actual situation and how much homes sell for. The best markets for house flipping have a reasonable ratio of average listing and average sell price.
- Average time to sell – The longer our property remains on the market, the more money you lose. We give better rankings to states where new listings get sold faster. Flipping houses in Vermont, for instance, usually comes with a turnover time of 140 days. Flipping houses in Virginia, in contrast, is much shorter at 73 days. The latter, understandably, will rank better on our list of the best markets for flipping houses.
Best and Worst Markets for Flipping Properties
With so many ranking factors, it’s impossible to highlight one place as the best destination for making money flipping houses. That’s why we summarized all the vital data in two separate tables. The first covers the general factors, while the second focuses on specific criteria.
Overview of General House Flipping Rankings
In the table below, we focus on general data like homeownership rate, median income, housing costs, and remodeling costs. These give you information critical to finding the best areas to flip houses. Yet, they are not as specific as the factors covered in the following section.
These are the highlights that can help you understand where it’s possible to flip cheap houses.
Homeownership rate in 2019
- Top five – West Virginia (75.6%), New Hampshire (75%), Maine (73.8), D.C. (73.1%), Michigan (73%)
- Worst five – Delaware (40.2%), New York (52%), California (54.8%), Nevada (58.2%), Hawaii (60%)
Median household income
- Top five – Delaware ($82,604), Maryland ($81,868), New Jersey ($79,363), Hawaii ($78,084), Massachusetts ($77,378)
- Worst five – Mississippi ($43,567), West Virginia ($44,921), Arkansas ($45,726), Louisiana ($47,942), New Mexico ($48,059)
Median household costs per month
- Top five – West Virginia ($1,001), Arkansas ($1,071), Indiana ($1,118), Mississippi ($1,132), Alabama ($1,164)
- Worst five – D.C. ($3,123), New Jersey ($2,398), Hawaii ($2,354), California ($2,345), Massachusetts ($2,207)
Average remodeling costs
- Top five – Arkansas ($75,888), Tennessee ($82,928), Utah ($83,014), Iowa ($85,478), Idaho ($98,176)
- Worst five – Massachusetts ($323,311), Oregon ($311,185), New York ($289,719), Connecticut ($278,469), Rhode Island ($275,515)
Lowest remodeling costs
- Top five – Utah ($12,000), Missouri ($14,000), (Kentucky ($15,000), Tennessee ($16,000), Iowa ($16,000)
- Worst five – California ($48,000), Oregon ($47,000), Connecticut ($46,000), Massachusetts ($44,000), Alaska ($41,000)
Rental vacancy rate
- Top five – Utah (5.1%), Minnesota (5.6%), Washington (5.9%), Massachusetts (6.3%), Wisconsin (6.4%)
- Worst five – Alabama (16.1%), Hawaii (15.2%), Alaska (14.6%), South Carolina (14.5%), Louisiana (14.4%)
Utah and Tennessee establish themselves as the best places to flip houses in terms of low remodeling costs. Utah, additionally, has the lowest rental vacancy rate, and that places it in an even more favorable position. West Virginia boasts the highest homeownership rate in the US and the lowest housing costs. Families in Delaware, New Jersey, and Maryland, however, have the strongest purchasing power.
Flipping houses in Hawaii doesn’t make sense, at least not without a considerable investment. The state, while an attractive destination, has the second-worst rental vacancy rate and high housing costs. Plus, its homeownership rate is only 60%. So, it doesn’t belong among the best states to flip houses.
|State||2019 Homeownership Rate in %||Median Household Income in $||Median Monthly Housing Costs and Mortgage in $||Average Remodeling Cost in $||Lowest Remodeling Cost in $||2019 Rental Vacancy Rate in %|
Overview of Specific House Flipping Rankings
Now, let’s see how each state is doing in terms of median home value and expected value index change. We will also analyze the average prices of listings and sold homes as well as the average turnover time. This table dives deeper into the best states to flip houses and what makes them a suitable choice.
Here are the highlights you should keep in mind.
Median home value
- Top five – D.C. ($640,783), Hawaii ($631,700), California ($546,800), Massachusetts ($400,700), Colorado ($373,300)
- Worst five – West Virginia ($121,300), Mississippi ($123,300), Arkansas ($133,100), Oklahoma ($140,000), Indiana ($147,300)
Home value index forecast
- Top five – Idaho (-0.2%), Maine (-0.4%), Washington (-0.5%), Arizona (-0.5%), New Hampshire (-0.8%)
- Worst five – Alaska (-4.8%), Delaware (-2.9%), Hawaii (-2.8%), Illinois (-2.4%), Connecticut (-2.3%)
Median listing price
- Top five – Hawaii ($630,000), D.C. ($599,900), California ($533,500), Massachusetts ($464,900), New York ($429,000)
- Worst five – West Virginia ($165,000), Ohio ($169,900), Iowa ($175,000), Michigan ($175,000), Arkansas ($176,000)
Median sell price
- Top five – D.C. ($586,667), California ($582,500), Hawaii ($557,250), Massachusetts ($448,667), Washington ($442,083)
- Worst five – Arkansas ($155,500), Ohio ($171,250), Oklahoma ($174,417), Michigan ($184,417), Kentucky ($187,750)
Average days on the market
- Top five – Nebraska (54), Indiana (58), Washington (59), Wyoming (61), Massachusetts (64)
- Worst five – Vermont (140), Hawaii (121), South Carolina (113), Connecticut (109), Arkansas (107)
Number of realtors
- Top five – Arizona (168), Hawaii (173), Florida (175), D.C. (193), Nevada (200)
- Worst five – West Virginia (628), Mississippi (628), South Dakota (534), Alaska (533), Kentucky (508)
While Hawaii was hardly among the best states to flip houses based on the previous factors, here it’s in the top destinations for finding properties to flip. Hawaii has one realtor per 173 people, which is excellent. The state also has a high listing and selling price, and soaring average home value. Still, Zillow predicts that the home value index in this state will significantly drop. So, it’s still questionable whether Hawaii deserves a place among the best places to flip houses.
Washington is an excellent destination for finding houses to flip when it comes to expected house value change and turnover time. Nebraska is another obvious pick with its average time on the market of only 54 days. Given that the standard contract closing time is about 35 days, houses in Nebraska sell, on average, in less than 20 days. Massachusetts is another state not to overlook as it’s in the top five destinations in several categories.
Florida outperforms most states by the number of realtors, while its other rankings are average. If you want to invest in this state, Tampa is among the best places to flip houses in Florida.
|State||Median Home Value in $||Home Value Index 1-Year Change Forecast in %||Median listing price in $||Median sale price in $||Average time to sell in days||1 Realtor Per How many People|
Best Cities to Flip Homes in the United States
In the tables above, we analyzed the states and their rankings in all the relevant categories. Here, let us list the ultimate city leaders in the house flipping market.
West Valley City, Utah
Flipping houses in Utah can earn you an excellent salary as a house flipper. This state topped our list of top destinations thanks to a short turnover time, high homeownership rate, and low remodeling costs. On average, house flippers spend about $83,000 to remodel a house in Utah, while the lowest expenses move around $12,000. West Valley City stands out among the best cities to flip houses in this state.
Greensboro, North Carolina
With a median home value of $180,600, North Carolina is another house flipping destination for those ready to invest under $200,000. House flippers can remodel homes in this state for a minimum of $21,000, which is a solid amount. Homes in the state sell in about three months, which isn’t the best, but the housing costs are a reasonable $1,284, at least.
With a growing real estate market, Greensboro is among the best places to flip houses in North Carolina. This destination offers a solid quality of life, and it’s the largest economy in the state. Meaning, those who move there can expect high-paying jobs. That’s why Greensboro is a top spot for those who want to try our flipping houses in North Carolina.
Pennsylvania has an average ranking in most categories, but that doesn’t mean you should overlook it. The city’s average ROI of flipping houses is an impressive 162.4%. Selling takes about 80 days, and the cheapest remodeling costs about $20,000. All these figures make the destination a smart choice.
Pittsburgh and Philadelphia are the best places to flip houses in Pennsylvania. The latter is the obvious choice, being a popular city in general. Pittsburgh, however, allows you to find cheap properties and make hefty earnings. Making money flipping houses isn’t about investing in popular and expensive markets. It’s about finding growing markets and properties with high potential. Pittsburgh fits that description perfectly.
New Orleans, Louisiana
While flipping houses in Louisiana may not be the obvious choice, the state is a place of opportunity. New Orleans is among the best cities to flip houses in Louisiana as its market significantly improved after Katrina. It remains the most populated place in the state. The average ROI in Louisiana is 104.2%, and you can give a house a makeover for a minimum of $26,000. Houses in this state sell for about three months, while the house value index of Louisiana ranks 16th. With a median home value of nearly $170,000, this is the right place for a house flipper with an investment of that size.
If you’re looking for the best places to flip houses in Colorado, consider investing in Denver. The average ROI in this city is 109%, thanks to the many tech companies that operate from there. Colorado ranks excellent in most categories and only underperforms when it comes to remodeling prices. Still, it’s possible to find great house flipping properties and sell them within two months.
Boston is one of the best places to flip houses in Massachusetts and the US. The Bay State is an excellent destination in various aspects. Properties there have significant value, and the rental vacancy rate is low. Homes in the state further sell pretty fast. Massachusetts ranked 6th in the average turnover time category. Just make sure not to overlook the high remodeling and housing costs in the state. These prevent you from finding properties to flip without a significant starting investment.
San Diego, California
San Diego is one of the best cities to flip houses in California with its year-over-year increase in gross profit of 20%. California itself is expensive, but that’s why its homes have a high value that isn’t expected to drop drastically. California ranked 8th for the number of realtors and 2nd for the median sell price. For flipping houses in California, however, you will need a hefty starting investment and at least $48,000 for remodeling.
Even though toward the bottom of our list, Tennessee is another top spot for making a nice house flipping salary. The reason? You only need about $16,000 to remodel a home. When it comes to the best places to flip houses in Tennessee, the crown goes to Memphis. In this city, homes sell fast, and the average ROI is an impressive 132.7%. Plus, the average home value index forecast places Tennessee in the 5th position in the category.
Atlantic City, New Jersey
New Jersey boasts a high average median income and a robust house market. The state also has many realtors and an average ROI of 141.6%. It is, therefore, an excellent destination for house flippers to consider. As for the best places to flip houses in NJ, we would recommend Atlantic City. Due to its proximity to New York and rapid growth, Atlantic City is an attractive destination. The same can be said about flipping houses in Maryland, the state that ranked just under New Jersey.
Virginia Beach, Virginia
Virginia has a lot to offer to house flippers, starting with an average ROI of nearly 100%. The average profit per flip in this state is $91,783, while homes sell in about 70 days. Virginia Beach, Lexington, and Chesapeake are some of the best places to flip houses in Virginia. Here, the market is stable, and the prices are reasonable. Meaning, it’s possible to flip cheap houses and make a profit.
What is house flipping?
House flipping is purchasing a property intending to sell it for a profit. Flipping is an investment strategy where the investor buys something and quickly resells it for a higher price. Often, the process includes remodeling the property to increase its profit potential.
Is flipping houses still profitable?
Yes, but the potential is continually dropping. In 2018, the average gross profit of house flipping was about $62,000. In 2019, this figure dipped to $60,000, hitting an eight-year low. The ROI of house flipping, meanwhile, heavily depends on the state.
How much does the average house flipper make?
This depends on many factors, including location, marketing, and skills. Experienced flippers can end up with a profit of $25,000 per flip. In Mississippi, for example, the average gain is $10,000, while in Missouri, it moves around $36,000. According to ZipRecruiter, the average house flipper salary in 2020 is $68,693 a year.
What kind of homes are the best to flip?
A three-bedroom house of 2,000 square feet is the typical home purchase in the US. This home includes three bathrooms and costs about $230,000. So, this type of house is your best bet if you want to make a profit out of house flipping.
What is the 70% rule in house flipping?
A house flipper should invest no more than 70% of the after repair value (ARV) of the property, minus repair costs. ARV represents the value of an estate after repairs have been done. For example, let’s say the ARV is $100,000, and repairs cost $15,000. So, the investor shouldn’t pay more than $55,000 (70% of $100,000 minus the $15,000). Applying this rule ensures you won’t overpay for properties you want to flip.
The Bottom Line
When you know the best places to flip houses and have the right information, you can profit from house flipping. Beware that flipping homes is a time-consuming task that also requires money and skills. Once you get the knack for it, however, you can make an average of $25,000 per successful house flip.