10 Cities Where House Flippers Are Making a Pretty Penny

Limited inventory in today's red-hot market means home flippers are getting top dollar for a recently renovated home. But not all markets are seeing exceptional returns for flippers. In fact, in most markets, flip profits are dwindling due to more competition, lack of inventory, and increased renovation costs.

Wondering where home flippers are getting the most bang for the buck? Here are 10 markets where real estate investors are getting a pretty penny.

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Baltimore, Maryland, is one of the few major metropolitan markets to make this list. Unsurprisingly, though, the market is filled with lower-cost housing that could benefit from property improvements in a city with long-term demand. The return on investment (ROI) on a home flip, as of third-quarter 2021, was 90%.

ALSO READ: What is a Good Return on Investment?

Scranton once had big ties in the coal and mining industry. After the sector fell, people fled, leaving investors today with loads of homes in need of a second life.

The city announced a plan to bring back jobs, largely in the industrial sector, through its famed "Scranton Plan." Clearly, it's working. Returns in Q3 2021 were over 123% for homes flipped, showing there is hefty demand for renovated properties in this budding city.

Like Scranton, Pittsburgh, Pennsylvania, also went through some growing pains after its major industries closed their doors. The population has steadily declined year over year for the past decade, but that doesn't mean demand isn't there.

There's a large inventory of rather affordable homes and not many new developments underway, making a renovated home super appealing to end buyers. Home flipping returns in Q3 2021 were 124%.

ALSO READ: 3 Mistakes You Might Make If You're New To House Flipping

Florence is a small town in the center of South Carolina, with less than 140,000 calling Florence County home. It may be surprising to see such a small city on the list for hottest flipping markets, but flippers are making a pretty penny today. Home-flipping returns were 125% in Q3 2021.

Oklahoma City, as well as other surrounding towns along the Dust Bowl, is quickly becoming an attractive market for real estate investors. Strong job markets, stable demand, and a fairly low cost of housing make it a great place to fix and flip homes. Oklahoma City's home-flipping returns in Q3 2021 were 126%.

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The second-largest city in New York, Buffalo is seeing a resurgence in demand for renovated homes. The city has struggled with neighborhood blight for several years now, but it seems the tide is turning.

Home-flipping activity is picking up notably, and because of the area's relatively low cost of housing, flipping returns are quite strong. In Q3 2021, the ROI for homes flipped in the city was 130%.

Austin, Texas, leads the country as the No. 1 city for home-flipping activity. Of all homes sold in Austin in 2021, 31% were flipped. That's likely not a huge surprise, given it's one of the hottest housing markets in the country.

But what may come as a surprise is that it has one of the lowest-yielding returns for flippers, at $22,750. While it's still a nice chunk of change, as you'll see in the next slides, there are certainly other cities that give you more bang for your buck.

ALSO READ: 3 Reasons Why Austin Is a Homebuyer's Dream in 2022

Detroit City is making a huge comeback due largely to home flipping. Flips accounted for 25% of all homes sold in 2021, with profitability ranging from $30,000 to $44,000, depending on the zip code.

Detroit has an ample inventory of abandoned homes and undeveloped residential lots, still with a relatively low cost for homes, making it a great spot for flipping activity.

ALSO READ: The House Flipping Statistics Investors Should Know in 2021

Miami, Florida, is one of the hottest housing markets in the country right now. Known primarily for foreign investments, it quickly became a financial hub and major tech spot on the southeastern coast, bringing a lot of demand with it.

It's among the highest share of home flips in the country, having 21% of its total sold homes being renovated properties in 2021 while total gross profits were $125,000.

It may come as a surprise to see the small city of Canton, Ohio, as the No. 1 market for home-flipping profits. But this city of nearly 71,000 residents absolutely dominated the home-flipping market, having an average gross flipping profit of $263,000. This is over double the median home price of $137,000.

Ohio has an abundance of lower-priced homes, oftentimes old and in need of repair. That means there is ample inventory and consumer demand for improved properties -- the perfect recipe for making a pretty penny as a home flipper.

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Smaller towns on the outskirts of major metro cities, especially in the Midwest and South, are seeing explosive growth in population and demand, which in turn helps boost the total ROI for a flip. However, it doesn't necessarily mean it's where you can make the highest raw profits.

More expensive markets in the Northeast and West have higher purchase prices but also higher gross profits, which can be several hundred thousand on a single flip. ROI always trumps raw profits, so following the trends to the markets that make the most is a winning play for home flippers.

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