Finding the Right Neighborhoods
Experts agree that targeting several key neighborhood criteria can lead to more successful fix-and-flip deals. One of them is focusing on the right neighborhoods given your own personal location and intentions.
Here are several targeting items to consider:
* Proximity to your work and home – the closer the better.
* Selling prices – are they in a range that you can capitalize on?
* Sales activity – no sales for others could mean no sales for you.
* School district – unless all your buyers don’t have kids, pay attention here.
* Asking prices – when you are buying, the lower the better.
* Style of home – out of date can mean out of market.
* Construction materials – the better the inputs, the better the outputs.
* Square footage – it’s the ratio that matters relative to the neighborhood.
* Number of bedrooms and bathrooms – know the norm for the neighborhood and be careful not to fall short.
* Presence of basement – if people expect one, have one.
In addition, here are some additional key areas (from MLS information) to fold into your targeting calculations:
* Price per square foot – be in the fat part of the bell curve, not on the edges.
* Property taxes – it’s relative, but understand what people are getting.
* Year built – older homes typically offer better flipping potential, but not with asbestos.
* Days on the market and days to sell – the lower the better.
* Features and Amenities – the more the merrier.
* Neighborhood school ratings – bad ratings can dampen your return.
Finally, everyone is concerned about safety and neighborhood appeal factors in their targeting efforts, including:
* Established reputation – a bad reputation normally leads to a bad ROI.
* Clean and well kept yards – why work hard if the neighbors around you won’t?
* Low crime rate and good starter homes – if people don’t feel safe, your investment won’t feel safe.
* Close to schools, shopping, mass transportation, business centers, and parks and recreation. Of course!
Net-net, if you are looking at fix-and-flip properties with these considerations in mind – your chances of success have just gone up.