Not only does Ohio have the seventh-lowest<\/a> cost of living in the country \u2014 the cost of living index<\/a> considers 100 to be the national average and Ohio sits at 89.4 \u2014 but the state\u2019s home values continue to increase. Ohio home prices are up 10.2%<\/a> over the past year, and population growth is consistent at a rate of 0.67%<\/a> annually.<\/p>\n When considering where to flip houses<\/a>, a state that has both a growing population and rising home values is generally a good sign. After all, someone needs to buy that house you\u2019ve just renovated<\/a>, and your chances of a quick sale \u2014 at a desirable price \u2014 are much higher in a location where people want to live.<\/p>\n With the help of Jenkins, who specializes in investment properties, we\u2019re digging into the nuts and bolts of flipping houses in Ohio \u2014 so let\u2019s get to it!<\/p>\n\n\n\n\n\n Interested in flipping a house in Ohio? A top real estate agent can help. HomeLight analyzes millions of transactions and thousands of reviews to find you the right agent for your needs \u2014 in just under two minutes.<\/p>\n \n House flippers buy homes, hold them for a couple of months, and then sell them for a profit (that\u2019s the flip part). Typically, they buy distressed properties \u2014 either short sales, foreclosures, or homes that need significant work \u2014 fix them up, and sell them for a profit. Sometimes flippers buy and sell homes to wholesalers without making any repairs or updates.<\/p>\n The goal is to buy low and sell for a high profit \u2014 one that covers both the home\u2019s initial cost and any improvements.<\/p>\n In Ohio, \u201cpeople are still flipping houses, people are still trying to find a deal,\u201d confirms Jenkins. \u201cSome people are in a position where they have to sell, and that\u2019s helping people who are looking to flip get a pretty good deal.\u201d<\/p>\n Jenkins also notes that now is a great time to buy and hold a property \u2014 as opposed to renovating a house and selling it immediately.<\/p>\n \u201cI feel like buying and holding is going to be more common than flipping right now, just because buyers are having to borrow and interest rates are a little higher right now.\u201d<\/p>\n Though lots of houses were flipped in 2022<\/a> \u2014 the most since 2000<\/a>, actually \u2014 profits weren\u2019t as high as sellers may have hoped. That being said, we are<\/i> on the heels of a pandemic that has changed nearly everything as we know it, including real estate<\/a>.<\/p>\n As any experienced agent<\/a> will surely advise, Jenkins says that the key to profitably flipping houses in Ohio is \u201cmaking sure that you\u2019re getting a good price and that the numbers make sense. The biggest mistake is when people don\u2019t know what they\u2019re doing, they don\u2019t have a budget, then they end up with less than they would have liked.\u201d<\/p>\n In other words, don\u2019t expect to play it by ear and make a big profit just because you put a few extra dollars into renovations.<\/p>\n It\u2019s always difficult to put a concrete number on profits when it comes to real estate \u2014 every transaction is different. How much you\u2019ll make flipping houses in Ohio depends on a number of factors, including:<\/p>\n According to Attom Data, the nationwide median resale price for flipped homes in the third quarter of 2022 was $310,000<\/a>, yielding a 25% profit margin.<\/p>\n Opportunities for flipping homes can be found throughout Ohio, and Jenkins actually says there is no one particular area she would consider \u201cthe best,\u201d because, as she reminds us, \u201cit\u2019s all about the numbers.\u201d<\/p>\n That said, here are a few cities in Ohio that, based on growth and\/or increases in median home values, could be a smart place to start your search.<\/p>\n Cleveland\u2019s median home value is $111,195<\/a>, up 10.1% from December 2021. The population \u2014 currently 351,000<\/a> \u2014 has been on a decline, but has risen 0.06%<\/a> in the past year, making this city one to watch for profitable house flipping.<\/p>\n With an affordable median home value of $120,407<\/a>, which is up 12.4% from December 2021, Maple Heights shows real promise for home flippers. The modest population of 24,000<\/a> is growing at an annual rate of 0.23%.<\/p>\n This Ohio city has seen a steady rise in its median home value \u2014 up 8.4% from December 2021 for its current position at $127,286<\/a>. Population growth is happening as well, with just 5,500<\/a> growing at a rate of 0.38% annually.<\/p>\n Toledo sits at the western tip of Lake Erie and has a population of 265,969<\/a>, making it the fourth-largest city in Ohio. It has an attractive, easy-in median home value of $110,753<\/a> \u2014 up 10.4% from December 2021.<\/p>\n Following Toledo, Akron \u2014 which spans over 62 miles \u2014 is the fifth-largest city in the state with a population of 187,877<\/a>. Akron\u2019s median home value is $119,145<\/a>, up 12.3% from December 2021.<\/p>\n Unless you\u2019re a licensed contractor, you\u2019ll need a network of professionals to help you flip. Even if you\u2019re handy around the house, evaluate your skills honestly. For some projects, particularly electrical and plumbing, you\u2019ll need an expert.<\/p>\n Keep in mind that buyers may be wary of purchasing a flipped home if they can\u2019t verify that you aren’t <\/a>selling a house with unpermitted work<\/a>,<\/a>\u00a0and the work was done by licensed professionals.<\/p>\n Put together a network of experienced, licensed professionals before you start scouting houses. In addition to people to perform the remodeling work, you\u2019ll need an agent<\/a> to find homes, a stager to help sell them, and possibly a lawyer to draw up legal documents.<\/p>\n If you\u2019re new to flipping houses, Jenkins encourages you to be realistic when it comes to acknowledging your skill level. It\u2019s better to invest in the work of a professional than to cut corners and scare off potential buyers when the house hits the market.<\/p>\n \u201cMy husband and I do a lot of the work on our flips. I love doing tile \u2014 he\u2019ll cut it and I\u2019ll lay it. I love to paint, he hates it,\u201d says Jenkins. \u201cBut we do pay someone to handle plumbing, furnace, carpet; things like that.\u201d<\/p>\n A budget that takes into account all repairs, fees, and the unexpected is a key piece to successfully flipping a home. But, how do you account for the unexpected? Since flippers don\u2019t have a crystal ball to see the future, the industry has developed the 70% rule<\/a>.<\/p>\n This rule states that you should never pay more than 70% of the after-repair-value or \u201cARV\u201d of a property, less any repairs, that you\u2019re flipping. The ARV is your estimate of the home\u2019s worth after all repairs have been done.<\/p>\n For example, if the ARV of your flip is $300,000, and it needs $50,000 in repairs, you shouldn\u2019t pay more than $175,000 to acquire the property. If all went well, you\u2019d still have $75,000 in profit to cover other expenses (such as agent and stager fees). Even if something went wrong, you likely wouldn\u2019t end up losing money.<\/p>\n Elements of your budget to pay attention to:<\/p>\n Jenkins says that it\u2019s especially helpful to understand square footage<\/a> and how it works for calculating the costs of flooring, for example.<\/p>\n \u201cSo, when you go in you can say, okay, it’s a 1,000-square-foot home, we’re going to do $1.99 per square foot for carpet, and you\u2019ll know to multiply that by the square footage. That way, if you want to spend $3,000 on carpet, you\u2019ll understand where you may need to make adjustments,\u201d Jenkins explains.<\/p>\n Purchasing a home to flip with cash is almost always going to be in your best interest \u2014 however, not all investors have that kind of funding. If you need to finance the home with a mortgage, there are a few options you should consider:<\/p>\n Disclaimer<\/i><\/b>: As always, there are benefits and drawbacks to each financing option. HomeLight always recommends that you work with a financial advisor to find the best financing option for you.<\/i><\/p>\n One of the biggest factors that will affect your return on investment will be the market conditions in the area you are looking to flip homes in. Flipping houses requires a delicate balance of availability of homes at discounted prices, making cost-effective renovations<\/a>, and buyer demand for when you go to sell. Here are some signs that a particular area in Ohio will yield opportunities for profitable house flipping:<\/p>\n A strong job market and an increasing population generally translate to increased demand for housing \u2014 look into areas with recent influxes in residents as well as low unemployment rates. The cities we mentioned above are all examples of areas with both population growth and increasing home values.<\/p>\n More broadly, Ohio as a whole has experienced 1.0% GDP growth<\/a> over the last five years, ranking it 34th out of the 50 states. The statewide unemployment rate is currently 4.20%<\/a>.<\/p>\n One of the keys to maximizing return on real estate investments is paying attention to home value appreciation in the areas in which you are investing. Steady home price growth over the last few years can help you predict how much your investment might appreciate in value when you go to sell \u2014 this can also help inform your strategy.<\/p>\n Nationwide, home prices have fallen from their peaks in 2021 and early 2022. However, economists are currently predicting that the market correction we are seeing in the form of falling home prices will be short lived \u2014 Wells Fargo\u2019s economists are predicting that prices are going to rebound in 2024 with a 3.3% increase by the end of the year<\/a>. This is good news for investors currently worried about home prices falling and losing money on their investments.<\/p>\n A real estate agent<\/a> helps with identifying current trends and popular home upgrades. When it\u2019s time to sell your flip, they\u2019ll sell and market it. But they can also help you find houses to flip.<\/p>\n Due to the high demand for housing in some markets, and the fact that many sellers list on the open market and sell without repairing or remodeling, it\u2019s become harder for flippers to identify potential homes<\/a>.<\/p>\n An experienced real estate agent will know the cities, neighborhoods, and sometimes even specific houses that are ripe for flipping. Agents who regularly work with flippers understand what makes a particular home a good candidate for this kind of transaction, and their expertise can save you thousands of dollars.<\/p>\n \u201cI definitely think it helps to work with somebody who understands numbers and which houses are going to make a good investment,\u201d confirms Jenkins.<\/p>\n HomeLight<\/a> can connect you with the top-performing agents in your desired Massachusetts market. Our free Agent Match tool analyzes over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs.<\/p>\n Once you\u2019ve got an agent keeping an eye out for you, alerts set up on real estate websites, and you are scouring the multiple listing service<\/a>, it\u2019s time to find a home to flip. It could take several months, and you might have to make several offers on available homes before you\u2019re successful. Be patient!<\/p>\n As Jenkins advises, be sure to choose a house that aligns with your budget. If you\u2019re a first-time flipper, now probably isn\u2019t the time to purchase a property that needs to be totally renovated down to the studs. Gain some experience \u2014 and hopefully a tidy profit \u2014 with your first couple of flips before delving into the major projects.<\/p>\n Once you win your bid on the appropriate home, it\u2019s absolutely crucial that you get a home inspection and an appraisal. When you walked through the home, you could probably tell you\u2019d need to remodel the bathroom<\/a> to sell. But a home inspection will reveal any hidden issues beneath the surface, such as a rotted subfloor in that bathroom, which you might have to replace to safely and successfully flip the home.<\/p>\n A free home appraisal<\/a> estimates the home\u2019s current market value. If you\u2019re using hard money or a mortgage to finance the flip, the lender will likely require it. The appraisal tells you what the home is worth now \u2014 which is valuable information if you\u2019re concerned that you\u2019re paying too much.<\/p>\n Line up the contractors, plumbers, electricians, and anyone else you might need to begin work the day after the closing. Check licenses and references before signing any contracts. Once the property is yours, there\u2019s no time to waste!<\/p>\n According to the National Association of Realtors remodeling impact report<\/a> for 2022, high ROI renovations to consider include a bathroom remodel with a 71% return on investment, a kitchen renovation, which has a 75% return on investment, and refinishing hardwood flooring with a whopping 147% return on investment!<\/p>\n In Ohio, Jenkins recommends tile work and a nice backsplash, and says that luxury vinyl flooring even holds a big appeal for buyers, who appreciate the durability and long warranty.<\/p>\n Once the work is done, flippers have a choice. You can either rent the home and become a landlord, or sell it. If you used hard money to finance your purchase, you\u2019ll have to refinance to hold the property long-term and rent.<\/p>\n There are a variety of different ways investors use to determine a monthly rent<\/a> on their investment properties depending on their financing needs, fair market value, and comps in their market. Here are some methods to consider when getting ready to rent out your property:<\/p>\n This is where your top agent can come in handy once again \u2014 crafting a listing that highlights the improvements that were made while not being unrealistic on price is a delicate balancing act.<\/p>\n Work with your real estate agent to evaluate comps in the area<\/a> and set a competitive price. List too high and it might sit on the market for too long, too low and you could be leaving money on the table.<\/p>\n When a flipped house is ready for the market, your agent will conduct the same process as determining the list price<\/a> for any other home \u2014 by comparing similar homes in the area that have recently sold.<\/p>\n Experienced flippers price out home repairs before purchasing a house, and leave themselves a cushion for the unexpected. But not even they could have predicted the 20% increase in construction materials<\/a> between January 2021 and 2022. Building materials continued to rise in cost by 4.9% in the first four months of 2022<\/a>, but have since fallen to only about 1.4% higher<\/a> than they were a year ago.<\/p>\n Increases in construction costs could eat away at your flip\u2019s profit, or put you in the red. A delay in getting permits, or having materials delivered, would also decrease profits due to increased holding costs. The longer you own the house before flipping it, the tighter the profit margin.<\/p>\n Whether you\u2019re flipping a house in Ohio or anywhere else, keeping a close eye on your time and financial resources is key to coming out ahead \u2014 or even just breaking even.<\/p>\n![\"homelight](\"https:\/\/www.homelight.com\/blog\/wp-content\/themes\/ccprototypev5\/images\/logo-small-cta.png\"){kind=logo}
\n <\/div>\n \n A Top Agent Can Be Your Ohio Real Estate Investment MVP<\/h3>\n
What is house flipping?<\/h2>\n
Is house flipping profitable in Ohio?<\/h2>\n
How much do Ohio flippers make?<\/h3>\n
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Best places in Ohio to flip a house<\/h2>\n
Cleveland<\/h3>\n
Maple Heights<\/h3>\n
Toronto<\/h3>\n
Toledo<\/h3>\n
Akron<\/h3>\n
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I definitely think it helps to work with somebody who understands numbers and which houses are going to make a good investment.<\/q>\n
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Step-by-step guide to flipping houses in Ohio<\/h2>\n
Create your network and evaluate your skills<\/h3>\n
Develop your budget<\/h3>\n
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Financing your flip in Ohio<\/h3>\n
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Research your market<\/h3>\n
Economic growth<\/h4>\n
Steady home value appreciation<\/h4>\n
Partner with a top real estate agent in Ohio<\/h3>\n
Find a home to flip<\/h3>\n
Renovation time<\/h3>\n
Rent or sell<\/h3>\n
How much should the home rent for?<\/h4>\n
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Setting a list price<\/h4>\n
What can go wrong with a house flip in Ohio?<\/h2>\n