20. Augusta-Richmond County, GA-SC
> Return on investment: 72.3%
> Avg. gross profit: $47,000
> Avg. flipped price: $112,000
> Number of flips: 397
> Flips, pct. of home sales: 5.5%
Augusta-Richmond County is one of the poorer metro areas in the country. The share of residents living below the poverty line is 18.9%, higher than the national poverty rate of 15.5%. Housing is consequently inexpensive, and the typical home intended to be flipped can be bought for just $65,000, about half the $120,000 national median purchase price for such homes. The typical flipped home can then be resold for $112,000 for a $47,000 profit. While the return on investment in Augusta-Richmond County is among the highest in the country, the housing market has recently cooled off. In 2014, the typical gross profit was $53,938. The 28% decrease in profit from flipping homes between 2014 and 2015 was one of the largest nationwide. It also takes six days longer today on average to flip a house than in 2014.
19. Toledo, OH
> Return on investment: 74.4%
> Avg. gross profit: $33,783
> Avg. flipped price: $79,200
> Number of flips: 268
> Flips, pct. of home sales: 4.0%
Though area home values have increased slightly since 2010, homes in Toledo are among the least expensive in the country. The typical metro area home is worth $117,200, far less than the $181,200 national median home value. Less valuable property may have played a role in attracting investors to Toledo’s real estate market, and supply and demand forces have made it one of the most profitable real estate markets in the country. The 74.4% average return on investment for buying and reselling a home within a year is considerably higher than the 45.8% average national margin.
18. Clarksville, TN-KY
> Return on investment: 74.8%
> Avg. gross profit: $53,500
> Avg. flipped price: $125,000
> Number of flips: 332
> Flips, pct. of home sales: 8.2%
In Clarksville, 8.2% of all home sales are made by real estate investors for the purpose of profit, more than the corresponding 5.5% national share of home flips. One reason house flipping may be more common in Clarksville than it is in much of the rest of the country is profit margins. Real estate investors make an average 74.8% return on investment with each home bought and sold within a 12 month period. Another attractive aspect of Clarksville’s real estate market is a relatively short turnaround time. Homes are bought and sold in the area in 162 days on average, two weeks less than the national average turnaround time.
17. Lancaster, PA
> Return on investment: 77.4%
> Avg. gross profit: $61,100
> Avg. flipped price: $140,000
> Number of flips: 322
> Flips, pct. of home sales: 5.4%
In Lancaster, the typical investor can buy a home for $78,900 and resell it for $140,000, turning a $61,100 profit. House flipping nationwide took a hit during the housing crisis, but Lancaster has recovered better than many metro areas. Since 2010, the share of home flips in Lancaster increased by 12.8% while the national share declined by 24.7%.
A healthy economy may help home flippers sell restored properties at a higher premium. The unemployment rate in Lancaster of just 3.0% is one of the lowest of any metro area. Similarly, just 10.4% of residents live below the poverty line, a much smaller share than the 15.5% of Americans who do.
16. Cleveland-Elyria, OH
> Return on investment: 77.8%
> Avg. gross profit: $35,000
> Avg. flipped price: $80,000
> Number of flips: 1,525
> Flips, pct. of home sales: 5.7%
With a high violent crime rate and a relatively low median household income, homes in Cleveland are considerably cheaper than they are across the country. The median home value in Cleveland is just under $137,800, far below the national median home value of $181,200. Homes being flipped in the Cleveland area are worth even less. The median purchase price of a home to flip in Cleveland is only $45,000, one of the lowest such figures in the country.
Low costs have contributed to higher profit margins in Cleveland. Real estate investors get a typical 77.8% return on investment in the metro area, one of the highest in the country. High profit margins may partially explain the uptick in house flipping over the past decade. While the frequency of home flipping significantly dropped in most cities, it increased by 3.4% in Cleveland since 2005.