House Flipping Tips for 2019 (and Beyond)

House flipping is never an easy business. Despite what the home and garden channels would have novices believe, those of us who have been flipping houses for years know that it takes a great deal of skill, timing, dedication, and a fair bit of luck. Some years are easier than others, but house flipping in 2019 isn’t likely to be one of those years.

The experts all seem to be in consensus that the housing market will continue to slow in 2019. According to Forbes, the federal interest rate on 30-year mortgages will exceed 5%. Home prices will continue to go up, but slowly, and rent prices will also rise. New construction will begin to make a dent in the housing shortage, but not much of one. All in all, housing affordability will continue to go down, which means that some buyers – the largest portion of whom, by far, will be Millennials – will be priced out of the market entirely or forced to look well outside of their ideal buying areas in order to purchase a home.

On the bright side, the experts also agree that the expected housing market slow down in 2019 is actually a good thing. The economy is doing well, which hopefully means that income levels will go up over the next few years. As housing slows down and construction and incomes get a chance to catch up, that could lead to a substantially stronger and more stable housing market a few years down the line.

What does all of this mean for house flippers?

In 2019, house flipping is likely to follow the same trends that it has for the last year or so. Flippers are likely to see the greatest opportunities in up-and-coming neighborhoods adjacent to thriving metropolitan areas. The lower end of the market is where many Millennial first-time buyers will be looking, but older Millennials and Gen Xers are likely to look at higher-end properties, where flippers can make great margins if they have the capital to get started.

We expect the trend of more flippers turning to residential rehab loans to continue through 2019. Having funding from a reliable source that can offer pre-approval has become an essential component of competing in the current market place. With the right funding in place both for the initial purchase and to cover renovations, flippers can do more with their available capital, working on more or bigger projects.

Another element of success in 2019 is likely to be finding a way to stay ahead of the crowd in terms of trends. Buyers are no longer interested in cookie-cutter houses with pure white walls and generic layouts. Flippers who can get a pulse on what Millennial buyers in particular are favoring in homes and more broadly in the neighborhoods that they are drawn to will outpace their competition. For example, a major trend that we saw through 2018 which is likely to extend into 2019 is a desire for flex spaces – rooms that could work as home offices, play rooms, bedrooms, or dens. There is also an ongoing emphasis on the kitchen and a greatly diminished focus on formal dining areas.

What tips do you expect to be most helpful for house flipping in 2019? Please share your thoughts in the comments.