House flipping — the practice of buying under-priced homes and selling them at a higher price to earn a profit — has become a surprisingly common financial venture for many Americans. In the first quarter of 2015, a little more than 17,000 of these “flipped” homes were sold to new buyers.
The best place in the country to flip houses? The Baltimore-Towson metropolitan area, as new findings from RealtyTrac recently revealed.
According to 24/7 Wall St., the average gross return on investment on a home in the greater Baltimore-Towson area is now an astounding 94.1%. In comparison, the nation’s second-best flipping market — Deltona-Daytona Beach-Ormond Beach, FL — offers a mere 74.7% return on investment.
Investing in existing residential properties is a smart choice. More than half of home buyers, 59%, still largely prefer to buy existing homes, while 41% say they would rather buy a newly-built house.
Additionally, flipped properties are becoming more profitable. In the first quarter of this year, the average gross profit — the difference between a house’s original purchase price and its flipped price — sat around $72,450, a significant boost from $61,684 in the first quarter of 2014.
For Maryland, the significant return on investment value for homes throughout the Baltimore-Towson area is a reflection of the state’s healthy housing market.
According to HousingPredictor.com, average home values throughout Maryland are expected to increase over the next year by about 2.6%. More people will be looking to buy homes in Maryland, thanks to strong job creation in the defense, education and healthcare sectors.
Maryland’s real estate market is poised to enjoy a year of moderate yet healthy growth over the next 12 months. House flipping will undoubtedly play into this, ultimately giving Maryland residents more purchasing power and investment opportunities in the long run.