Attention to Detail: 2021’s Emerging Trends in the Fix and Flip Market

If fix and flips are at the top of your real estate investing agenda for 2021, then you’ll want to do your research when it comes to new and emerging trends in the hard money sector—particularly with all of the unprecedented changes we’ve seen over the course of this past year. Being able to adapt your approach to meet evolving market demands is essential for sustained profitability. Here’s a breakdown of the key trends we anticipate seeing in the fix and flip sector in 2021 so you can prepare accordingly.

Home Design Preferences

First and foremost, buyer preferences in terms of floorplans indicate a reduced demand for open concepts. With a significantly higher percentage of Americans now teleworking, homebuyers are now seeking properties that offer additional privacy. They want distinct areas for multiple family members to simultaneously work from home without interfering with one another—think one person fielding a conference call in one room while the other takes part in an online distance learning seminar. Based on a poll conducted by Houzz, satisfying this market demand can be accomplished in several ways, such as creating dedicated home offices, partitioning off small work nooks in preexisting spaces, or even going so far as installing sliding doors and partitions to sector off spaces that were once wide open. Also consider adding Accessory dwelling units (ADUs) and small backyard cottage-offices to accommodate this new employment trend.

Automation is IN

The National Kitchen and Bath Association (NKBA) anticipates that more automated features will be in demand this year, especially in kitchens and bathrooms. Leading the list of preferences are amenities such as motion-sensor controlled lighting fixtures, voice activated or hands-free faucets to reduce the spread of COVID-19, self-closing blinds and automated climate control systems. These small details can be incorporated into your renovation plans to enhance your property’s resale value and ensure your property is a hot commodity when it hits the market.

Color is Key

Both the NKBA and Houzz research identified a trend towards lighter-toned color palettes when it comes to interior design in 2021. Among the leading colors homebuyers noted on their wish-lists are beige, sand and taupe, whereas the once-popular greys will not be seen as much. NKBA is forecasting that the lighter-hue movement will also impact material color selection to include kitchen countertops and accessories, with lighter-toned quartz being in high demand in the coming months. Be sure to factor in these color scheme preferences when putting the final touches on your fix-and-flip properties. Simple things like paint color and finishes can make all the difference when it comes to enticing potential homebuyers to submit an offer on your real estate investment project.

Location, Location, Location

The real estate market across the country has been heavily influenced by the pandemic. The most notable trend thus far has been the large-scale transition away from densely populated urban centers in favor of more spacious housing options located in the suburbs. According to data compiled to real estate platform Zillow, median rental prices are spiking in suburban areas while simultaneously taking a nosedive in metropolitan markets. Industry experts theorize that suburban properties are more enticing as tenants are no longer feeling the need to have a short commute due to a drastic increase in teleworking and distance learning options. Also, of note is that supply remains much lower than the housing demand, which has kept median home prices robust. This tight inventory has only been made worse by significant delays in new construction projects. With land, labor and lumber prices continuing to escalate, the cost of new builds is increasing—but the increased expenses are not enough to tamper the demand and the surge of families migrating to the suburbs. Accordingly, a large number of real estate investors are pivoting to new developments instead of hunting for needle-in-the-haystack cosmetic projects. Savvy investors who are able to manage construction budgets and general contractors consider ground-up projects as the most advantageous route to a healthy return on investment this year.