Seven Ways to Flip a Home Ahead of the Gentrification Curve
Gentrification is a word that Realtor's love to use. It has been happening all over the city for years where young people move to formerly struggling areas, convert old houses and abandoned schools to trendy lofts and other attractive living spaces. Entrepreneurs open cafes, restaurants, bookstores, specialty grocers and art and design galleries to appeal to a younger demographic.
Mount Pleasant is a perfect example of a community that has been 'gentrified' and has become more expensive now that it has been discovered. Affectionately known as Hipsterville, Mount Pleasant was described as a somewhat 'sketchy' area some fifteen years ago and has now grown into an urban, hip and artsy community with neighbouring designer craft breweries, eclectic shops, boutique restaurants and markets.
I am currently working with several clients who are interested in flipping. Not only am I searching for the perfect 'diamond in the rough' but I am also researching neighbourhoods on the cusp of gentrification. Chinatown and Vancouver's East Village formerly known as Hasting/Sunrise are areas we should be paying close attention to.
Before deciding to flip in any community, the first rule of thumb is to pay attention to the demographic (typically younger) that is moving into the area and buy in front of this trend where you can. In other words, get in early, buy a fixer upper and renovate specifically to the target market.
Here are some things flippers should bear in mind when considering a purchase:
- Do not judge a book by it's cover. Prime flipping areas are frequently minority neighborhoods with older homes in the process of gentrifying. The neighbourhoods occasionally begin as 'food deserts', under served by traditional large grocery chains. As smaller specialty grocers move in, property values rise.
- Many growing families are busting out of their condo's and are looking to move to lower-priced areas for more square footage and a yard. If you are flipping a house, gear your renovation to a young growing family. ie. bedrooms all on one level, security system, ample storage, in suite laundry, fenced yard, mortgage helper on lower level, etc.
- We are all plugged in. Consider making improvements to wiring and cabling to support a digital generation. For example, adding structured wiring to an older home, if you can do it without killing your profit margin.
- When interior decorating, keep your colour and material selection neutral, current and relatable to a younger demographic. For example using quartz countertops is very current, but a neutral colour selection will be appreciated by a larger pool of Buyers. Skip the accent paint colours as they are too personal, bring colours into the space instead through art and accessories that a future Buyer doesn't have to commit to.
- Pay attention to commuting and walk ability. Many young, educated urbanites value public transportation and use their bicycles.
- Access to educational, cultural activities and parks are important to a younger demographic.
- Younger demographics appreciate Green. It is not their top purchasing factor but any green component is noticed. ie. energy efficient appliances, LED lighting, finishes with recycled content etc.
There is money to be made for flippers in the gentrification process but timing is critical. If you have any question on specific neighbourhoods that are 'hot in the hood', please contact me at 604.739.1129.
About Your Realtor
Did you know that Pamela bought and renovated a 'fixer upper' in Mount Pleasant seven years ago? Instead of flipping, she decided to stay and watch her neighbourhood change and grow.
Tax Burden Reduced for First Time Buyers
Under the Property Transfer Tax (PTT) First-Time Home Buyers’ Exemption program, qualifying first-time buyers can buy a home worth up to $475,000. Contact me for more details.
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Fact: Home sales of $2M or more grew by 36% in Vancouver from 2012 to 2013.