2017’s Best Places to Flip Houses

Source: WalletHub

 

Aug 1, 2017  |  Richie Bernardo, Senior Writer WalletHub

Source: WalletHub
 If you’re among the millions of HGTV viewers who’ve seen an episode of “Flip or Flop,” you’ve probably thought about the thrill of gutting a house and turning a five- or six-figure profit. But before you demo that pink-tiled ’80s kitchen, you need a stern reality check from the Property Brothers. Any experienced home flipper would caution you that transforming a real-estate beast into a bankable beauty is never as easy as it looks on TV.

In other words, don’t get your hands dirty until you’ve learned a thing or two about real estate, construction and how much damage your project could do to your wallet — and to the beam that’s keeping the roof from collapsing. Breathing new life into a low-cost property won’t necessarily return your full investment and allow you to pocket another $62,624, the average gross flipping profit in 2016. While home flipping enjoys its highest rate since 2007, according to RealtyTrac, the current homeownership rate is near the previous half-century low of 62.9 percent, which may translate to fewer potential buyers off the bat, depending on the location of your revamped property.

To help you choose the right market to list your masterpiece, WalletHub’s analysts compared the 150 largest U.S. cities across 22 key indicators of market potential, cost and quality of life. Our data set ranges from median purchase price to average full home remodeling costs to housing-market health index. Read on for the winners, expert home-flipping advice and a full description of our methodology.

Overall Rank (1 = Best) City Total Score ‘Market Potential’ Rank ‘Renovation & Remodeling Costs’ Rank ‘Quality of Life’ Rank
1 El Paso, TX 69.60 95 9 48
2 Sioux Falls, SD 69.52 122 7 29
3 Fort Wayne, IN 67.38 106 16 46
4 Peoria, AZ 66.60 97 6 6
5 Oklahoma City, OK 66.56 30 15 37
6 Tampa, FL 66.51 8 19 66
7 Grand Rapids, MI 65.00 25 29 38
8 Boise, ID 64.97 129 8 13
9 Greensboro, NC 64.82 48 11 49
10 Springfield, MO 64.61 115 5 100
11 Chandler, AZ 64.58 65 44 5
12 Lubbock, TX 64.57 86 36 54
13 Little Rock, AR 64.13 43 2 94
14 Tulsa, OK 63.77 26 14 90
15 Knoxville, TN 63.61 21 4 114
16 Orlando, FL 63.18 29 23 70
17 Colorado Springs, CO 63.09 51 46 17
18 Jackson, MS 62.64 119 3 136
19 Nashville, TN 62.54 56 12 64
20 Wichita, KS 62.48 31 21 107
21 Gilbert, AZ 62.43 88 62 2
22 Virginia Beach, VA 61.96 18 70 34
23 Huntsville, AL 61.94 40 37 45
24 Pembroke Pines, FL 61.92 33 63 25
25 Des Moines, IA 61.50 67 1 102
26 New Orleans, LA 61.20 7 38 112
27 Lexington-Fayette, KY 61.11 15 67 57
28 Mobile, AL 60.96 12 13 141
29 Laredo, TX 60.93 149 41 73
30 Henderson, NV 60.92 94 35 23
31 Albuquerque, NM 60.69 45 27 106
32 Corpus Christi, TX 60.49 138 54 68
33 Lincoln, NE 60.29 76 47 27
34 Spokane, WA 60.08 16 48 105
35 Glendale, AZ 59.69 59 18 91
36 St. Petersburg, FL 59.26 6 79 79
37 Shreveport, LA 59.15 62 10 147
38 Denver, CO 59.06 111 50 15
39 Overland Park, KS 58.97 123 73 7
40 Memphis, TN 58.93 2 40 146
41 Columbus, OH 58.87 52 52 60
42 Winston-Salem, NC 58.73 22 55 101
43 Louisville, KY 58.71 37 53 82
44 Phoenix, AZ 58.60 61 22 92
45 Raleigh, NC 58.27 104 45 30
46 Aurora, CO 58.15 100 60 22
47 Montgomery, AL 57.99 66 20 138
48 Grand Prairie, TX 57.99 107 59 12
49 Las Vegas, NV 57.92 90 25 74
50 Augusta, GA 57.63 20 32 143
51 Cape Coral, FL 57.61 98 71 18
52 Durham, NC 57.42 50 68 61
53 San Antonio, TX 57.20 145 24 67
54 Brownsville, TX 57.18 150 33 124
55 Jacksonville, FL 57.10 14 69 111
56 Tempe, AZ 57.07 60 51 81
57 Charlotte, NC 57.04 64 75 36
58 Tallahassee, FL 56.95 42 34 128
59 Chesapeake, VA 56.73 47 77 43
60 Arlington, TX 56.45 105 28 71
61 North Las Vegas, NV 56.38 73 26 99
62 Fayetteville, NC 56.05 102 30 133
63 Tucson, AZ 55.99 68 17 132
64 Kansas City, MO 55.91 120 39 80
65 Austin, TX 55.85 146 65 19
66 Akron, OH 55.84 35 42 137
67 Norfolk, VA 55.25 34 78 85
68 Mesa, AZ 55.23 70 72 53
69 Port St. Lucie, FL 55.21 83 85 24
70 Fort Worth, TX 55.19 136 43 47
71 Pittsburgh, PA 55.16 11 107 69
72 Cincinnati, OH 55.13 9 80 118
73 Plano, TX 55.09 114 103 4
74 Indianapolis, IN 55.04 139 31 96
75 Amarillo, TX 55.01 140 91 42
76 Tacoma, WA 54.82 23 81 104
77 Richmond, VA 54.63 19 102 77
78 Scottsdale, AZ 54.55 87 104 8
79 Toledo, OH 54.06 28 66 131
80 Salt Lake City, UT 53.81 126 64 63
81 Baltimore, MD 53.71 4 92 135
82 Reno, NV 53.63 133 56 50
83 Madison, WI 53.62 92 115 21
84 Fort Lauderdale, FL 53.58 49 58 134
85 St. Paul, MN 53.10 75 90 40
86 Modesto, CA 53.06 96 49 115
87 Philadelphia, PA 53.02 3 111 126
88 Baton Rouge, LA 52.98 77 57 125
89 Columbus, GA 52.92 27 61 144
90 Hialeah, FL 52.68 24 83 121
91 Rancho Cucamonga, CA 52.65 110 93 14
92 Omaha, NE 52.47 101 74 75
93 Seattle, WA 52.10 41 128 16
94 Sacramento, CA 52.04 79 84 72
95 Cleveland, OH 51.87 1 105 148
96 Buffalo, NY 51.42 10 96 130
97 Garland, TX 51.41 128 82 44
98 Anchorage, AK 51.39 80 95 89
99 Chattanooga, TN 51.27 5 116 120
100 Irvine, CA 51.03 135 124 1
101 Washington, DC 50.74 81 99 58
102 Newport News, VA 50.57 39 101 110
103 Irving, TX 50.32 121 106 26
104 Minneapolis, MN 49.99 72 119 41
105 Milwaukee, WI 49.24 54 94 117
106 Ontario, CA 49.19 109 97 52
107 Santa Clarita, CA 48.91 134 110 11
108 Vancouver, WA 48.62 69 117 62
109 Riverside, CA 48.46 99 108 65
110 Miami, FL 47.97 91 87 116
111 Rochester, NY 47.86 38 89 145
112 Providence, RI 47.78 44 98 140
113 Aurora, IL 47.62 71 131 32
114 Detroit, MI 47.44 53 76 149
115 Fresno, CA 47.25 46 100 139
116 Portland, OR 47.23 82 126 35
117 Birmingham, AL 47.14 17 88 150
118 Stockton, CA 46.53 58 109 119
119 Santa Rosa, CA 46.41 63 139 28
120 Fontana, CA 46.25 116 122 39
121 Garden Grove, CA 45.86 125 114 51
122 Houston, TX 45.73 137 86 123
123 Chula Vista, CA 45.64 118 127 33
124 Dallas, TX 45.44 112 112 87
125 San Diego, CA 45.35 113 132 31
126 Moreno Valley, CA 45.33 108 118 78
127 St. Louis, MO 45.31 13 137 122
128 Anaheim, CA 44.63 124 120 76
129 Chicago, IL 44.32 55 133 93
130 Worcester, MA 44.06 36 135 113
131 San Bernardino, CA 43.80 93 113 127
132 Santa Ana, CA 43.17 117 121 97
133 Oceanside, CA 43.05 103 125 83
134 Huntington Beach, CA 42.92 132 138 20
135 Bakersfield, CA 42.01 84 130 109
136 Long Beach, CA 41.95 130 123 95
137 Glendale, CA 40.54 127 129 84
138 Atlanta, GA 40.24 32 141 129
139 Fremont, CA 39.80 143 147 3
140 Jersey City, NJ 39.33 85 144 55
141 Honolulu, HI 37.95 148 136 59
142 Boston, MA 37.80 89 148 56
143 San Jose, CA 37.78 144 146 9
144 New York, NY 37.38 78 145 86
145 Oxnard, CA 37.26 147 134 88
146 Los Angeles, CA 36.83 131 140 108
147 San Francisco, CA 34.38 142 150 10
148 Newark, NJ 34.31 57 142 142
149 Yonkers, NY 34.21 74 149 98
150 Oakland, CA 31.97 141 143 103

Artwork-2017-Best-Cities-to-Flip-a-Home-v1

Methodology

In order to determine the best and worst cities to flip houses, WalletHub’s analysts compared the 150 most populated cities across three key dimensions: 1) Market Potential, 2) Renovation & Remodeling Costs and 3) Quality of Life.

We evaluated those dimensions using 22 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for house flipping.

Finally, we determined each city’s weighted average across all metrics to calculate its total score and used the resulting scores to rank-order our sample. Our sample considers only the city proper in each case and excludes cities in the surrounding metro area.

For context, “home flipping” is a real-estate term for buying a property with the purpose of reselling it for a profit, which is generated through appreciation of the home’s value or repairs and renovations.

Market Potential – Total Points: 35

  • Average Gross Return on Investment (ROI): Triple Weight (~8.75 Points)
  • Median Purchase Price: Full Weight (~2.92 Points)
  • Share of Home Flips: Full Weight (~2.92 Points)
  • Average Days to Flip: Full Weight (~2.92 Points)
  • Home Turnover Rate (2015 vs. 2014): Full Weight (~2.92 Points)
    Note: This metric specifically measures the percentage of all homes sold in one year.
  • Housing-Market Health Index: Full Weight (~2.92 Points)
  • Average Ratio of Sale Price to List Price: Full Weight (~2.92 Points)
  • Real-Estate Agents per Capita: Full Weight (~2.92 Points)
  • Foreclosed Homes per 10,000 Homes: Full Weight (~2.92 Points)
  • Real-Estate Tax Rate: Full Weight (~2.92 Points)
    Note: This metric was calculated as follows: Median Real-Estate Tax / Median House Price.

Renovation & Remodeling Costs – Total Points: 35

  • Average Kitchen Remodeling Costs: Full Weight (~8.75 Points)
  • Average Bathroom Remodeling Costs: Full Weight (~8.75 Points)
  • Average Full Home Remodeling Costs: Full Weight (~8.75 Points)
  • Average Construction-Worker Salary: Full Weight (~8.75 Points)
    Note: “Construction Worker” includes plumbers, electricians, carpenters, etc.

Quality of Life – Total Points: 30

  • Crime Rate: Full Weight (~3.75 Points)
  • GreatSchools City Score: Full Weight (~3.75 Points)
  • Share of Population with Walkable Park Access: Full Weight (~3.75 Points)
  • Family-Friendliness: Full Weight (~3.75 Points)
    Note: This metric is based on WalletHub’s “Best & Worst Cities for Families” ranking.
  • Annual Job-Growth Rate: Full Weight (~3.75 Points)
  • Unemployment Rate: Full Weight (~3.75 Points)
  • Median Salary: Full Weight (~3.75 Points)
    Note: This metric was adjusted for cost of living.
  • Pace of Economic Growth: Full Weight (~3.75 Points)
    Note: This metric is based on WalletHub’s “Fastest-Growing Cities” ranking.

 

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Renwood RealtyTrac, Zillow, Houzz, Federal Bureau of Investigation, GreatSchools.org, The Trust for Public Land, Council for Community and Economic Research and WalletHub research.