There are various ways of making money in real estate. One profitable route investors can choose to follow is flipping houses. Here’s what you need to know about flipping houses in Georgia.
House flipping, also commonly referred to as fix and flip, is a common trend in the real estate and investment world. Primarily, it involves finding a property that may require some touch-ups, buying at a price lower than the market rate, doing the necessary repairs, then selling it at a profit.
As you can already tell, it can be a lucrative venture if done the right way. Many investors all over the world have made flipping houses their careers.
However, you need to be extra careful not to burn your fingers. House flipping carries more inherent risk than other investing methods. This is not to discourage you. With the right tips and strategies, you can turn your fortunes around and have bliss flipping your first house.
This guide seeks to give a deeper insight into flipping houses in Georgia and how to nail it.
Why Flip Houses in Georgia?
The Georgia real estate market is quite a special housing market in the US. There are many reasons why many Northerners and Westerners as well move south to the state to live and work. Firstly, the weather here is more favorable since the winter is milder. Secondly, the people are not only friendlier but actively make an effort to be your friend.
Let’s look at some reasons why investing and flipping houses in Georgia is a good real estate investment strategy. They include:
- House Prices: Property prices in the state of Georgia have been on an upward trajectory. This trend is expected to continue in 2022. Compared to national prices, these prices are pretty much affordable. While higher property prices are bad news for renters, it presents a great opportunity for flippers. It means that you have an opportunity to get higher returns from your investment.
- Cost of Living: Compared to other states in the US, the cost of living in Georgia is remarkably affordable. In fact, it’s below 100, meaning it’s below the national average. On average, it’s lower by 56.69%.
- Unemployment Rates: Unemployment rates in Georgia have been on the decline. Wages have also been rising. High employment rates and better wages represent a healthy economy. This means that the housing market will be attractive to investors since the labor force can afford decent housing.
- Population Growth: One of the main reasons for the increase in property prices in Georgia is population growth. According to the US census data, Georgia’s population increased by 730,000 in the last decade. A growing population translates to rising demand for housing.
The above reasons strongly justify why a real estate investor should consider flipping houses in Georgia. For example, the low cost of living allows an investor to keep property repair costs low. The lower-than-average house prices mean that you’ll spend less capital to acquire the property.
Georgia Housing Market Analysis
When looking to invest in Georgia, you need to carry out an in-depth real estate market analysis to back your business decision. One way of carrying out market analysis is by looking at the real estate market data and trends.
According to Zillow, as of October 2021, the median home value in Georgia was $269,441. This was an increase of 22.4% compared to the previous year. Home values in Georgia have increased by over 61% over the past five years.
Based on the most recent statistics by the Georgia Association of Realtors (GAR), the average sale price of a home in the state is $365,158, representing is an increase of 14.7%.
Listings’ days on market have decreased by 39.5% to 26 days, compared to the previous year. The number of properties in Georgia inventory has also fallen by 23.7% year-over-year. The months’ supply of inventory is down 30% to 1.4 months. This is a clear indicator that the Georgia housing market is hot.
Related: The Best Rental Markets in Georgia: The 2022 Guide
Key Housing Markets in Georgia
Now that we’ve looked at some reasons why the Georgia real estate market is favorable for investing and some trends to support the fact, we can now look at some key cities you should keep an eye on.
While getting started, you should look at some important data, such as demand for housing, available amenities, job opportunities, convenience, and the safety of the location. All this data may be a bit confusing for beginners. This is why we’ve done all the hard work for you.
Here are five of the best places to flip houses in Georgia in 2022:
Atlanta, Georgia
The Atlanta real estate market is arguably the best real estate investment market in Georgia. The city’s population is growing almost twice as much as other comparable cities in the US. Major developments in Atlanta, combined with its affordability, favor both the buying and selling parties. The Atlanta housing market forecast shows that that will be a rise in property demand.
- Median Property Price: $575,468
- For Sale Listings: 2,531
- Average Price per Square Foot: $1,167
- Average Days on Market: 90
- Walk Score: 43
Major developments and affordability make Atlanta the best real estate market in Georgia
Columbus, Georgia
Columbus City in Georgia is another growing market to watch out for in 2022. The city’s growth forecast is at 6.2% year-over-year. Here’s the market’s data:
- Median Property Price: $242,587
- For Sale Listings: 276
- Average Price per Square Foot: $971
- Average Days on Market: 113
- Walk Score: 35
Winder, Georgia
Winder is a suburb located east of Atlanta. In 2021, it was one of the fastest-growing real estate markets in Georgia. Property prices climbed 20% compared to 2020 levels, while the inventory decreased by about 15%. It is expected that the local housing market will become even more competitive in 2022, which presents a great opportunity for flipping houses in Georgia.
- Median Property Price: $323,007
- For Sale Listings: 131
- Average Price per Square Foot: $171
- Average Days on Market: 70
- Walk Score: 74
Sandy Springs, Georgia
Sandy Springs is another suburb located north of Atlanta. If you’re familiar with the city, you know it’s home to large companies, including Mercedes Benz and UPS. Such large organizations provide a myriad of job opportunities for the population in Sandy Springs. The Georgia housing market forecast for 2022 shows that the city will continue to grow, due to the available job opportunities and limited housing supply.
- Median Property Price: $554,944
- For Sale Listings: 105
- Average Price per Square Foot: $253
- Average Days on Market: 64
- Walk Score: 25
Marietta, Georgia
The Marietta housing market is a very competitive market and a great place to flip houses. There’s a rich and vibrant community that’s always looking for an opportunity to buy. Combine that with the availability of many of the amenities that buyers seek while buying property and you get a perfect market to invest in.
- Median Property Price: $431,718
- For Sale Listings: 580
- Average Price per Square Foot: $203
- Average Days on Market: 77
- Walk Score: 81
Tips for Flipping Houses in Georgia
As house flipping can be a difficult process, every investor should be on the lookout for any advice or assistance that will help guarantee a good return in the future. Below is a list of tips that can make a fix and flip strategy a successful venture for both new and seasoned investors.
Understand the Market
A lot of real estate investors, especially beginners, get too excited about the prospect of making a handsome profit from flipping houses and thus forget to do the basics. Lacking a good understanding of the Georgia real estate market can lead you to the following issues:
- You won’t know if the house you’re interested in is a good deal. Remember, you want the sale price to be low enough so that the deal can still make financial sense after repairing the home and selling it.
- You won’t accurately identify a property’s potential value. Your idea of what the home could be must fit the neighborhood. Similarly, the neighborhood’s residents should be able to afford the property after repairs.
- You won’t know how to price your home when it’s time to sell. Assuming you’ve bought into a neighborhood whose properties range between $130,000-$150,000, once it’s time to sell, you’ll want to price your property at the lower end of that range.
Learning your market is important so that you can understand what your target audience is looking for. What do you do if you don’t have a sufficient understanding of the market?
We advise you to find an experienced real estate agent who has enough experience working in Georgia. Find one who knows the local housing market like the back of their hand. Your agent will help you find properties in the right neighborhoods based on your budget and desired profit.
We also understand that finding a real estate agent if you’re a beginner or new to the Georgia market can seem like an uphill task. However, Mashvisor’s Real Estate Agent Directory makes everything easier for you. The directory allows you to filter the location where you want to find the agent by state or city.
Related: How to Conduct Neighborhood Research Before Buying Rental Property
Run the Numbers
Like many other investments, working with a budget is vital when flipping houses in Georgia. Don’t wait until after you’ve purchased the property to make a budget. You need to have an idea of how much you’re willing to spend to buy the property, carry out repairs and other changes, and determine the selling costs before sealing the deal.
In your budget, include a list of any cosmetic projects and expensive renovations, such as plumbing, roofing, or electrical system overhaul. If you’ve never done this before, you can talk to a contractor to identify areas that will need fixing and how much they’ll cost. Unplanned overhauls can change the direction of your flip, so make sure you do your due diligence.
Get a home inspection and any other required tasks once you’re under contract. Better identify a problem beforehand than having to make changes to your budget to accommodate them.
Get Your Financing in Order
Flipping houses can be an extremely risky business when it comes to finances, especially if you’re doing it without cash on hand. Adding debt to the mix makes things more tricky. If you can, we recommend you flip houses using your own cash. Here’s why:
- Interest fees: If you take out a mortgage loan to finance a fix and flip project, you may have to pay interest for months. It means you’ll also be compelled to raise the selling price so the deal can make financial sense.
- No rush to sell: Investors who get financing to flip houses may act out of desperation. If the house doesn’t sell soon enough, you’re likely to lower your asking price to sell it faster. If you bought the property in cash, you’d remain calm even if the property takes time to sell since you don’t have interest piling up each day you fail to sell.
- Peace of mind: Financing a flipping project may not be a good idea. There’s already a level of risk in flipping houses, even on cash. Debts may cause trouble if there are any unforeseen hiccups in the process.
That said, cash is the only safe option for flippers. While you can get a loan, make sure you understand the terms. Also, understand your financial situation deeply so that you can avoid ending up with a negative return on investment and a considerable loss.
Find a Sweet Deal
Once you’ve gone through these steps, it’s now time to find a house to flip. Finding the right property is another challenging aspect of flipping houses in Georgia. You need to learn how to find good deals that will not only be below the market value but will also provide good profit margins after carrying out the necessary repairs.
Some good candidates for flipping projects include foreclosures and distressed sales. However, don’t do this all by yourself. Remember to talk to your real estate agent and contractor to get an idea of the amount of work that you’ll need to do on the house.
Where can you find good properties for flipping deals? The Mashvisor Property Marketplace is a great place to get started. It’s an advanced tool that offers you access to great off-market properties. This tool allows you to filter down your search based on budget, property type, and distance from the city of your choice.
The tool also has a filter feature that reveals investment properties that specifically need repairs. These properties include short sales, auction, bank-owned, and foreclosure properties.
Related: The Complete Guide to Buying Houses in Georgia
Bottom Line
If you’re looking for ways of making money in real estate in 2022, flipping houses in Georgia is a good prospect. With its growing population, the Georgia real estate market is one of the hottest markets in the US at the moment. There are also many job opportunities, which means that there’s a rising demand for housing.
Flipping houses can be a risky business. However, you can turn your fortunes around by following the right tips and real estate investment strategies. That’s why you need Mashvisor tools.
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