What is the average return on a house flip?

However, the key here is to realize that the 70% rule is just a general rule. Before buying a home, you should study market conditions, work with real estate professionals to get a more accurate resale quote, and meet with contractors to determine how much repairs will cost and what renovations are needed.

Even if you manage to overcome the financial hurdles of moving a home, don't forget about capital gains taxes, which will reduce your profits.

Even if you get the deal of a lifetime buying a house in foreclosure for a song, let's say knowing what renovations to do and which to skip is key.

If a market offers a normally low ROI, you'll need to work even harder to secure a low price and make a profit. Today, you can find countless training seminars for potential home lovers and you can hardly channel surfing without stumbling across a house-changing program that gives viewers an inside look at what's going on in the process. Professional builders and skilled professionals, such as carpenters and plumbers, often change homes as an additional income to their regular jobs. For example, if you're trying to choose between two homes to invest in, where House A offers a 30% ROI and House B offers a higher ROI of 40%, you might be inclined to choose House B; after all, it's a better ROI.

But, by describing some of the main factors that influence profitability, I can provide a key insight into the relocation process.


in Texas, New Mexico, Arizona, Colorado, Utah, and Oregon didn't reap many rewards either. Return on Investment (ROI) is an important measure that investors use when analyzing and comparing the benefits gained from rehabilitating and changing homes. But don't skimp on a detailed investigation of the neighborhood you want to buy in, the average sales prices in that neighborhood, and the average cost of renovating a property there.

As the name suggests, these are the costs you'll assume while you own a home and before you sell it. In that sense, the average profit is much less important than the precisely budgeted profit in a potential trade. As such, you could reasonably project that you would need to complete three to four businesses per year to earn a living as a home changer. However, if Company A offers 30% ROI in two months and House B offers a 40% rate for seven months, then House A would be a smarter financial decision, which is where the ROI formula falls short.