The Ohio housing market in 2023 has seen lots of house-flipping activity. However, the number of homes for sale decreased 24.8%, which might create a sense of urgency among amateur house flippers.
Lucky for you, this comprehensive guide will show you the secrets of flipping houses in Ohio and explain the risks and factors that can help you find real estate opportunities and make the right decision.
- Why Should You Consider Flipping Houses in Ohio?
- Is Flipping Houses in Ohio Profitable?
- Best 5 Cities to Flip Houses in Ohio
- How to Start Flipping Houses in Ohio: 6 Steps
- How Much Does It Cost to Flip Houses in Ohio?
- Is the Current Housing Market Good in Ohio?
- Do You Need a License to Flip Houses in Ohio?
- Other States to Look At for Profitable House Flipping
- Wrapping Up
Why Should You Consider Flipping Houses in Ohio?
Compared to other states, Ohio’s ever-growing real estate market offers lots of benefits, incentives, and many different investment opportunities that both new and veteran realtors can appreciate.
An Affordable Housing Market
The low living cost and highly affordable housing options make Ohio a great choice for investors from all over the US. As of August 2023, the Ohio area boasts a home value index of around $220,000, which is significantly lower than the national average home value of $410,200 in June 2023.
Promising Figures for Future Investments
Ohio’s appealing to property investors thanks to its ever-expanding population, communities, and new infrastructure.
There’s even an increase in the employment and education sectors, with 50,000 more jobs added in 2022. Many new families have driven up the high school graduation rate while the median family income remains around $60,000.
These factors will significantly impact house pricing in the near future as the cheap housing costs will attract many real estate investors, so expect some competition.
Higher Than Average Revenue
For flipping homes, the national average revenue per sale is approximately $55,000. In Ohio, however, that price is significantly higher – around $76,000.
Most people can turn great profits just by concentrating on high return-on-investment renovations and cost-efficient repairing procedures and projects that can yield profit.
Still, if you’re not a licensed contractor, it’s much better for you to have a good network of electrical and plumbing experts to help you with the complicated procedures.
Is Flipping Houses in Ohio Profitable?
Remember how the experts “predicted” a real estate market crash for 2023?
Well, that never happened.
On the contrary, many home flippers saw the market full of opportunities for buying cheap and selling high, and many families are still buying new homes.
Most real estate agents invest in properties here because of the median home value in Ohio, which is about $165,000, while the median resale price for house flipping in Ohio is $175,000.
Depending on the property’s status and Ohio’s current market, the costs of renovations are surprisingly cheap when compared to other states.
There’s no exact figure to lean on, but you can expect flipping a house in Ohio will yield an average net profit of about $25,000 and up to $35,000 if all goes well.
Best 5 Cities to Flip Houses in Ohio
As the most populated city in Ohio, Cleveland is the number one choice for flipping homes because it’s still a rapidly growing urban area with more than 40 neighborhoods.
The median property price fluctuates around $104,666 while the population is currently 367,000. It takes around 50 days to sell a house in Cleveland.
Most importantly, Cleveland has many healthcare industries that can attract employees, students, and families, which sustain the demand for housing.
Median property price: $104,666
Year-over-year property value growth: -1.4%
Year-over-year population growth: +0.17% from 2022
Maple Heights, OH
Maple Heights is a great area for flipping houses as the home prices went up 0.8% as of July 2023 showing promising figures for most home flippers.
Maple Heights shows real promise for home flippers. Compared to last year, the median price for flipping goes around $119,000. However, the homes around Maple Heights now sell approximately after 35-40 days.
Median property price: $119,000
Year-over-year property value growth: +0.8%
Year-over-year population growth: -1.1% from 2022
As the fourth-largest city in Ohio, Toledo has a population of 268,508, over 170 public schools, and 26 private schools. It’s a city that relies on the education factor for its real estate prices.
Once you list your house for sale in Toledo, it usually takes around 64 days to make the sale on the market.
Median property price: $112,056
Year-over-year property value growth: +3.4%
Year-over-year population growth: +0.39% from 2022
As the capital city of Ohio, Columbus is composed of more than 220 neighborhoods with lots of family homes and capital infrastructure that promotes a good investment market for many real estate investors.
For most real estate investing firms, Columbus has excellent financing options and represents a safe hub for flipping and renovating potential homes.
This is especially true for German Village, the neighborhood with a median property price that nears half a million dollars.
Median property price: $285,000
Year-over-year property value growth: +3.3%
Year-over-year population growth: +1.26% from 2021
Cincinnati has been a house-flipping hotspot for ages, with 50 neighborhoods and 129 public schools. It’s a rather famous town with lots of commercial stores, restaurants, parks, cafes, and beautiful neighborhoods and landscapes.
But, what makes it special is the incredibly short time to sell a house; just three days on the market, as per the statistics of RAGC. Redfin states it’s around six days, which is still pretty fast for most house flippers.
Median property price: $290,000
Year-over-year property value growth: +7.4%
Year-over-year population growth: +0.62% from 2022
How to Start Flipping Houses in Ohio: 6 Steps
Step 1. Check Your Budget
Before you even consider flipping houses, you will need to check your budget for closing costs, repair bills, property taxes, building permits, and other financial charges that may come up.
For example, even a low percentage down payment may cost upwards of thousands to buy, not to mention the $15,000 to $40,000 on repair bills, so make sure you always have extra cash.
Sometimes, you may have to take a loan or other financing options that can leverage a potentially profitable flip.
Remember, once you take a loan to buy property, you’ll still have to pay the mortgage until you sell the house.
Step 2. Do Your Research and Choose Your Location
Once you count your bills, you need to choose a location that yields promising houses for sale. Trusted sources like the Ohio Realtors Association or the US Bureau Of Labor Statistics’ Ohio Economic Data may help you gain a good idea of what to look for.
You’ll find many options, so make sure you make a list of homes that are in decent locations and in close proximity to shops, commercial buildings, schools, hospitals, parks, etc.
At the same time, avoid properties in territories with a high rate of crime that may discourage potential buyers.
Step 3. Inspect the House
Once you set your eyes on a potential location, it’s time to consider the internal factors for evaluating the potential for profits and renovation budget.
You can do it yourself, but it’s better if you hire a home inspector who can assist you in identifying structural issues like plumbing, electrical, HVAC, and other factors.
You’ll almost always find some issues that need repairing. Once you spot the first signs of damage, calculate the total repair costs so you’ll have a ballpark estimate for your budget.
If you feel that the repair bills might be too much on your budget, you can negotiate the sale price or ask for help from hard money lenders or private investors who may fund the flip.
Step 4. Buy the House
If you’re absolutely sure you see potential in a house, it’s time to prepare the paperwork for purchase.
The total profit margin entirely depends on how much you’ll pay for the house, so make sure you properly negotiate the price. Otherwise, this also includes purchasing a cheap house that’s located in a bad neighborhood.
A good trick to maximize your profits when buying a house is relying on the 70% rule.
It states that you should never pay more than 70% of the home’s after-repair value (ARV) while deducting the rehab cost when buying the house. This rule stands as an exemplary rule of thumb for most investors, and it serves as a standard for keeping your profit margin afloat.
Step 5: Do High-Quality Repairs
As soon as you purchase the house, it’s time to get to work. You hire labor workers to renovate/repair the house, as well as make some aesthetic changes and new paint to add value and curb appeal.
Make sure you pull permits if you’re building additions to the home or you’re doing electrical, plumbing, and HVAC procedures.
With a good renovation team, you can turn a distressed property into a dream house with an attractive price tag.
Step 6: Sell It
You can either do this by selling it as a for-sale-by-owner (FSBO) option or via a real estate agency. You should proceed with the assistance of a real estate agent because you’ll avoid paying for commissions.
If you plan to sell it on your own, you’ll need to pay a 3% fee to the buyer’s agent. Keep in mind that you should make sure you have all the paperwork in order, like the contracts, signing the deals, and the ownership paperwork.
How Much Does It Cost to Flip Houses in Ohio?
If you want to flip houses in Ohio, there are many different variables and factors to consider. On a good day, the entire cost of flipping a home in Ohio can reach around $40,000.
Take a look at the average family looking for a home in Ohio:
A homeowner would spend between $19,00 and $64,000 when purchasing a $215,000 home, which is Ohio’s median price.
On the other hand, the renovation costs can reach up to more than $48,000, while the service and labor fee for the contractors and plumbers can be from $20 to $150 per hour.
After you’ve bought the house, you will need to plan the budget for the ongoing expenses of homeownership, repair costs, and other fees that might come up.
Is the Current Housing Market Good in Ohio?
According to Redfin, the prices of homes in Ohio had gone up by 4% in July, with a median sale price of about $243,700.
This growth has a significant impact, considering that the housing market around the Ohio area has had difficulties and market uncertainties.
Ohio is also critical for selling homes that are close to their first listing prices. In May 2023, the median sale-to-list ratio was 1.001, which can attract home flippers across the state.
The market in Ohio is also competitive, meaning most buyers are ready to pay significantly more than the listed price. According to Norada Real Estate, more than 46% of house sales in Ohio were done over the listing price, while 38% were under.
Do You Need a License to Flip Houses in Ohio?
No, you do not require a license to flip houses in Ohio. You’re free to buy a house, renovate it, and list it on the market.
However, working with an experienced real estate agent can streamline the process at every point, from browning the market to assessing the neighborhood and potential development plans. Getting licensed can also help you gain relevant knowledge and may improve your appeal as a house flipper.
Other States to Look At for Profitable House Flipping
Aside from Ohio, here are other interesting states for house flipping that may yield excellent profits:
- Flipping Houses in Illinois: Is the Prairie State a good hub for house flippers? Find out all the details in this comprehensive guide.
- Flipping Houses in NJ: The New Jersey real estate market value saw a 5.5%, but does this make it a good market for flipping homes? This article has the detailed answer.
- Flipping Houses in Florida: There’s no better time to start flipping homes in Florida than now. As of late 2022, average profits go around $62,000.
Real estate agents have turned their spotlight towards Ohio because its cities represent lucrative real estate opportunities.
However, you must be fully aware of all the risks, costs, and factors that come into play if you want to flip houses for a living. Referring back to this guide can help you get started safely, so remember to keep these tips within reach.
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