Condo flippers are just a small segment of the new real estate buyer in Houston. Hurricane Harvey blew in a bevy of flippers/investors who are looking to stay in the Houston market. Storm ravaged properties are investors’ dreams. Investors and flippers want to buy low, invest little and sell for a profit. While these types normally will target single family homes, there are several that target condominium properties. Read more here.
Why Condo Flippers Love Condos for Investments
You might wonder why condo flippers find condos such a great investment. Consider this, they only need to improve the inside of the unit, studs out is normally the HOA. This reduces refurbish cost significantly over the purchase of a single-family residence that may need siding, painting, a roof, etc.
Insurance that is spread over the overall community vs a single owner can be significantly less expensive as well.
Let’s not forget the benefit of amenities without the upkeep; from yards to pools to tennis courts. It’s sounding better all the time.
There’s also the benefit of rules pretty much already being in place and managed by either an HOA or a management association. This takes some of the pressure off the condo flipper should they become condo investor and rent the property out.
Now that you know why the condo flippers want to be in your community, let’s look at the pros and cons associated with their arrival.
Condo Flippers – The Pros
- Condo flippers can drive the price of your units up. Because, while they buy low, they improve and sell high, thus increasing the value of the units in your property and other surrounding communities.
- Consider this, if prices in your property are low enough to attract condo flippers, by not allowing them, what type of buyers will you attract and how will you market to those buyers? If not flippers, you may experience a large influx of first time home buyers who find condos a great way to move into the real estate market in terms of affordability and maintenance. Consider how that fits with your current demographic and what demands a first-time buyer may have on your infrastructure.
- Condo flippers know millennials find condos a great way to move into the real estate ownership phase of their life. They buy condos with the idea they can live in them now and keep them for investment later. Upgrades by condo flippers may be very attractive to the millennial buyer bringing prices up in your community. Millennials are not just a group, but a movement that is changing the look of downtowns everywhere. Check out this article for more info.
Condo Flippers – The Cons
Although there are some positive to selling to a condo flipper, there are some downsides to consider.
- When a condo flipper buys a unit, they normally have plans to renovate. Renovations can be minor cosmetic changes to a total gut job. Along with the renovation comes a long list of issues such as:
- Security and access to a condo property for the multiple trades involved in any renovation.
- Noise levels of construction, limiting hours for construction can help with the nuisance.
- Risk of water damage, electrical outages and other disruptions to nearby units.
- DIY repairs in lieu of licensed contractor repairs which can affect other critical building systems.
- If the condo flipper makes the decision to rent the unit instead of re-selling, how will that effect your ratios to keep your FHA approval?
- Condo flippers can tax the resources of your association management with increased traffic, improper vetting and failure to abide by your covenants and restrictions.
The bottom line, there is a lot of information to review when it comes to condo flippers and their fit in your community. If you have questions in Houston, the guys over at RISE can help. Find out more about condo flippers in Houston, get info from people who live it every day, explore the RISE difference at www.riseamg.com or contact RISE at (713) 936-9200 or [email protected].