Hollywood is rewriting the house flipping script – and many stars are making a fortune from it. Where it used to be that young starlets like Miley Cyrus, Ariana Grande and Vanessa Hudgens would make headlines for million-dollar deals in entertainment, now they do it for their real estate savvy. A March profile in The Hollywood Reporter indicated that young entertainers now dominate the market, with a “cool factor” attached to real estate transactions.
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Some of the recent high-profile deals included Joe Jonas and actress Sophie Turner selling their house for $15.2 million less than two years after buying it themselves for $14.1 million; former tween actress Ashley Tisdale sold her $4.2 million house for $5.9 million two years after securing it; and Ariana Grande, who recently got $9.1 million for a house she bought for $6.8 million in 2021. There’s also Miley Cyrus, who sold a home she bought in 2020 for $4.9 million to a whopping $7.2 million a year later.
Of course, celebrities have a few things that come with these lucrative deals. For starters, they have a lot of money — and often “many entertainment clients think about a potential sale early in the buying process,” suggested The Hollywood Reporter, citing Kardashian family broker Tomer Fridman.
Many of the rich and famous also live in Southern California, where real estate is in huge demand. According to Norada Real Estate Investments, Los Angeles’ current property value has been right around 14.34%, placing the city in the top 10% nationally.
“From an investment standpoint, Los Angeles usually appreciates the fastest. If you buy right, you can gain equity or make money by holding a property for just a few years,” said Compass agent Carl Gambino. Not only that, but Hollywood has moved more into real estate as a “wealth protector” investment rather than dealing with fickle markets.
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But even if you’re not famous, there are ways to take advantage of the opportunity right now. Here are some expert tips for flipping houses for a big return in this market:
Choose your target market wisely. While much of the country’s property market remains in flux as interest rates continue to rise, there are some areas that are proving solid. “There are still pockets of the country where sellers are seeing their homes not only close quickly but command higher prices than they did last year,” USA Today noted. And many options are in more affordable markets in the Midwest and South, such as Davenport, Iowa; Minneapolis, Minnesota; Little Rock, Arkansas and McAllen, Texas.
Be aware of foreclosures in your target area. Unfortunately, with the way the economy is going, this can lead to many people defaulting on loans – including mortgages. Per Forbes, “The increase in foreclosures will result in more inventory options for those looking for real estate investment opportunities.” However, Forbes advised working with experienced teams as it is a complex transaction.
Don’t spend too much on renovations. While some people who watch a lot of HGTV think that flipping a house involves a complete overhaul, that’s not the case, according to the Bob Vila website: “Successful house flippers don’t over-improve their properties. The more you spend on extensive renovations , the higher you’ll have to price the house to break even, so it pays to stick with essential repairs and basic features in your fixer-upper,” authors Glenda Taylor and Tom Scalisi stated.
Wait to invest in properties until the end of 2023. That’s because, according to Forbes, the end of the year quickly turns into a buyer’s market. Forbes cited 44% of economists predicting the shift. “The talk of reduced mortgage rates at the end of the year will provide more opportunities to invest in real estate, whether for flipping or renting,” the outlet declared.
Or rent properties now until the housing market improves. If you have capital now and want to make an investment, you can always rent out the premises as an Airbnb property (or short-term accommodation) to pay dividends while you wait for the market to improve.
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This article originally appeared on GOBankingRates.com: Miley Cyrus and Ariana Grande Make a Fortune Flipping Houses – Here’s How to Find Profitable Markets