Quote:
Originally Posted by C. C. Rider
Just doing some "back of the envelope" calculations, that doesn't sound very profitable to me. It seems to me that a brand-new house of the same size and quality would have to increase in price about 16% to 18% per year just to break even on the deal... not counting anything for your time involved. Making a profit on the deal would require an even greater price increase year-over-year.
I know that housing is becoming more expensive every year, but is it actually increasing at 25% or more per year which is what I figure it would take to make it worthwhile?
|
the enterprise is not without risk. Folks who bought to flip when the market was going crazy, with low inventory, high demand, and low interest rates are finding it much more difficult to cash in right now. Being an older-aged community, there will always be some inventory coming in as owners age out of TV, and very often these sellers, or their heirs want to cash out and aren't looking for the biggest buck they can get. They price their homes to sell quickly, in order to relieve themselves of carrying costs.
I find these stories of people "always making money" on the deals a lot like listening to people talk about how well they do at the casinos. They don't like to share the bad experiences in between the big payoffs.
Insurance, taxes, maintenance , amenity fees and interest payments (or alternatively the loss of investment opportunities with the money tied up) all take their toll on the bottom line.