How to Use Market Trends to Your Advantage in Home Flipping

Home flipping is a very lucrative form of real estate investing since it provides investors with a great return in a relatively short period of time. But with ever increasing competition in the real estate investment space, it has become harder to make a good return home flipping. One way investors have been working around this issue is by using market analytics and trends to give themselves an edge. Making use of the data on current markets, and the direction that trends are going in, can help you make the most of your deal and maximize your profits. Continue reading as we cover how you can use market trends to your advantage with your next home flipping project.

Understand the Local Market

If you plan on making an investment in a given real estate market, you should start by taking a good look at the housing data for it. Are people moving to or away from the area? Are home sale prices increasing or decreasing? Growing numbers mean that demand is increasing in an area, and that it could very well be a good place to invest and turn a profit. Another useful piece of information will be knowing the popular neighborhoods in a particular market. Certain areas are bound to be in higher demand than others, and will see higher home prices as a result. Knowing how to analyze the data on local markets will be incredibly useful in helping you make a better return on your investment.

Research Local Developments

A good way to increase the profits of your fix and flip investment is by purchasing property near a new development. Taking the time to research zoning changes and planned developments in a market can help you increase the profit of your flip. For example, if you know that there will be a new commercial district built somewhere, you can safely assume that the value of nearby houses will rise. Along with attractions, even things like infrastructure or transportation projects can increase the demand for housing in a certain area.

Follow National Economic Indicators

Besides local factors, you will want to take large-scale economic trends into consideration when you’re planning a home flip. The demographic trends of the nation tend to change every few years, typically marked by large amounts of people moving to new markets. You can benefit from this high demand by investing in a market that you know will continue to grow for a long time. You should also take national lending interest rates into consideration since they may affect the demand for housing across the board regardless of other factors.

Consider Seasonal and Cyclical Trends

Most real estate investors will tell you that the market tends to follow a cycle based on the seasons. Generally, housing demand wanes in the winter months and starts to pick up again in the spring and early summer as warmer weather makes it easier for families to move. Families with children also find it easier to move in the summer in between school years. If you can time your investment right, you can maximize your profits by purchasing a discounted property in the winter, and performing all necessary renovations and listing it by the time summer rolls around.

Stay Up to Date on Industry News and Forecasts

Another great way you can stay up to date on market trends is by following real estate industry publications. There are all sorts of different sources of information you can find on the industry, especially online, so you’ll need to take care to only make use of information from trusted sources. You can also get more information on market trends by attending industry conferences and seminars. Getting to hear first-person accounts from other investors and industry experts can be crucial in helping you make better informed decisions.

Leverage Technology and Data Analytics

Last but not least, you will want to tap into software that can provide you with data and analytics on real estate markets. There are data aggregators, such as ATTOM Data which can provide you with accurate information on particular markets or the real estate market as a whole. If you’re looking to do research on an area before you make an investment, or are looking for a new market worth investing in, you should consider utilizing one of these services.

RCN Capital

The easiest way to save on your next investment is to obtain financing from a real estate lender that can get you the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. If you are an investor looking to finance a home flip, RCN Capital has competitive loan options available. Connect with us today to discuss your next real estate investment.