In the U.S., real estate investors have several methods to turn an affordable property into a profitable deal. While one involves buying the home and sitting on it for a while - such as becoming a landlord - the other is the quick flip. Better yet, this latter option has led to some strong returns for buyers across the country.
According to RealtyTrac's Q1 2014 Home Flipping Report, only 3.7 percent of total U.S. home sales were of the flipping variety. This is down from the 4.1 percent reported at the end of 2013 and below the 6.5 percent experienced at the beginning of that year. However, this doesn't mean home flipping isn't profitable. The average sales price for such a property was $55,574 higher than the average purchase price. Therefore, the unadjusted return on investment reached 30 percent for real estate investors.
Daren Blomquist, vice president at RealtyTrac, said in a statement that slowing home appreciation had the potential to damage the profits of some investors.
"But investors appear to have recalibrated their flipping strategy, accounting for the slower home price appreciation even if that means fewer flips," said Blomquist. "This is another good sign that this housing recovery is behaving much more rationally than the last housing boom, which was built largely on unfounded speculation rather than fact-based calculations."
Mortgage rates drop to recent low
There is more good news out there for real estate investors looking to finance their properties. According to Freddie Mac's recent Primary Mortgage Market Survey, mortgage rates dropped down to a low not seen since fall of 2013.
For example, the 30-year fixed-rate mortgage averaged only 4.21 percent for the week ending May 8, the government-sponsored enterprise reported. This is below the 4.29 percent noted for the week prior. The 15-year FRM also declined, at 3.32 percent compared to 3.38 percent the week before.
Real estate investors need quality information in order to succeed in the industry. CRS Data offers a wide range of mortgage records, property data and much more, making this an easier proposition than ever before.