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November14|&utm_content=|JPG
Editorial|&utm_term=|Website-Editorial-NAT(Website)|" target="_blank">Auction.com LLC, the nation's leading online real estate marketplace, says there is continued interest in flipping over hold-rent-strategies.

Auction.com revealed this today as part of the the findings from its April 2015 Real Estate Investor Activity Report, a nationwide survey of real estate investors bidding on properties offered for auction during the period. Though survey data collected from investors bidding on property online and at live events across the country in April reveals continued interest in flipping over a hold-to-rent strategy, that preference may be lessening.
“Most of the country and most investor segments performed in a manner very consistent with what we've seen over the past year, but investment strategies in Texas appear to have shifted pretty dramatically,” said Auction.com executive vice president Rick Sharga. “Investors probably realize that without oil fueling Texas' growth, it's unlikely that home prices will continue to appreciate rapidly, and it's very likely that home purchase demand will weaken. Given those considerations, a buy-and-hold strategy may suddenly be much more attractive.”
Auction.com's findings for April favor flipping overall, but investor intent varies considerably by the type of auction (live event versus online auction) and the investor profile. Survey respondents who indicated that they were making a one-time purchase preferred a hold-to-rent strategy, while respondents identifying themselves as full-time “real estate investors” and those indicating that they were working on behalf of another investor favored flipping.

April 2015 National Findings: Investor Intent
 

 

Investor Profile

Flip

Rent

Undecided

One-time purchase

23.8%

74.3%

1.9%

Real Estate Investor

52.4%

47%

0.6%

Working on Behalf of Another Investor

66.3%

29.5%

4.2%

TOTAL

50.4%

48.3%

1.3%

 
Investors bidding at live events appear to be more likely to flip the properties they purchase based on survey responses collected in April, with respondents indicating a strong preference toward flipping over holding to rent in nearly every state where Auction.com conducted live events, with the exception of Texas, where lower oil prices have resulted in fewer energy related jobs in four of the past five months. “It will be interesting to see if this trend spreads to other states where energy-related jobs have generated economic gains, or whether we'll begin to see a boom in home purchases stimulated by these lower energy prices across the country,” Sharga said.

April 2015 Live Event Investor Data: Intent of All Investors Surveyed
 

 

State

Flip

Rent

Undecided

Arizona

63.4%

36.6%

0%

California

70.8%

29.2%

0%

Georgia

54.2%

45.8%

0%

Idaho

76.9%

23.1%

0%

North Carolina

78.6%

21.4%

0%

Nevada

73.3%

26.7%

0%

Tennessee

72.4%

27.6%

0%

Texas

47.6%

52.4%

0%

Washington

57.8%

42.2%

0%

Nationwide

58.3%

41.7%

0%

 
Conversely, responses given at online auctions in April continued to show that investors bidding online are more likely to hold the properties they purchase – except in the West, where the pendulum has swung toward flipping. This shift, while slight, is likely due to the region's higher purchase prices negatively impacting rental property returns.

April 2015 Online Investor Data: Intent of All Investors Surveyed
 

 

Region

Flip

Rent

Undecided

West

49.6%

48.7%

1.7%

Midwest

44.3%

53%

2.6%

South

39.4%

59.4%

1.1%

Northeast

47.4%

50.5%

2.1%

Nationwide

43%

54.5%

2.4%

 
As noted in previous months, investors indicating that they purchase one or fewer properties per year continued to favor a hold-to-rent strategy, while flipping remained the preference among more active investors.

 

April 2015 Investor Data: Intent By Purchase Profile
 

 

Purchase Profile

Flip

Rent

Undecided

0-1 Property/Year

33.8%

64.7%

1.4%

2-49 Properties/Year

57.4%

41.4%

1.1%

50+ Properties/Year

62.7%

37.3%

0%

 

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David Phillips

David Phillips is a Chicago-based freelance writer and consultant with more than 20 years experience in business and community news. He also has extensive reporting experience in the food manufacturing industry for national trade publications.