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Flipping Flops as Rentals Rise

By Mike Wheatley | September 29, 2011

The trend in flipping homes for quick profits is on the way out, as slow sales and high demand for rentals has led to the rental property market becoming much more profitable, reports CNN Money.

Flipping flops
Property flipping on the rocks as rental markets surge - image courtesy prawnpie @ Flickr.com

According to figures from Tom Popik, a senior researcher at Campbell Surveys, almost half of all investor-purchased homes in July were flipped, while the other half were instead snapped up to be rented out. This is a big decrease from the 75% of investor-bought homes that were immediately flipped just one year ago.

Investors in real estate are now 57% more likely than they were a couple of years ago to rent out their properties, rather than try to flip them, says a new survey by the HomeVestors company.

It seems that the rental market is fast becoming the area of growth in real estate. Demand for rented accommodation is rising steadily, as many people can no longer get mortgages. What's more, with property so cheap these days, investors are able to see very good returns from renting in a much shorter time frame than ever before.

However, this doesn't mean that property flipping is going to disappear any time soon. Some markets, such as  San Diego for example, are seeing a rebound in property prices in certain districts, which has led to renewed interest in flipping homes for profit in the area.

 

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
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