“Supply is so far behind the amount of demand that we’re seeing throughout the country, and there’s a lot of reasons to that. The result has been drastic home price appreciation over the last couple of years.”
And while fix and flip has its undoubted appeal, buying a pre-existing home, particularly in the current house market, poses many drawbacks. While it once made sense to purchase a distressed asset at a discounted price, knowing there would be significant margins to be made after factoring in the cost of a renovation, this is no longer the case.
Parker said: “Doing this today is more difficult, because you have to pay up even for those distressed homes. Then there’s the fact that construction costs have been relatively high over the last seven-month period, and that makes it really difficult to be able to find those marginal value types of properties.”
Pre-existing homes also have a habit of throwing up nasty surprises, such as unforeseen structural issues, or even hidden mould, which only serve to delay the project or cause significant cost overruns.