Miley Cyrus and Ariana Grande Are Making a Fortune Flipping Houses — Here’s How To Find Profitable Markets
Hollywood is rewriting the script on house flipping — and many stars are making a fortune at 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’re doing so for their real estate savvy. A March profile in The Hollywood Reporter indicated young entertainers are now dominating the market, with a “cool factor” being attached to real estate transactions.
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Some recent deals profiled 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 selling her $4.2 million dollar 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 purchased in 2020 for $4.9 million at a whopping $7.2 million a year later.
Of course, celebrities have a few things going for them that factor into these lucrative deals. For starters, they have a lot of money — and oftentimes “many entertainment clients think about a potential sale early on in the buying process,” suggested The Hollywood Reporter, paraphrasing Kardashian family realtor Tomer Fridman.
Many of the rich and famous also live in Southern California, where there is a huge demand for properties. According to Norada Real Estate Investments, Los Angeles’ current rate of property appreciation has been sitting right around 14.34%, putting the city in the top 10% nationally.
“From an investment standpoint, Los Angeles usually appreciates the quickest. If you buy correctly, you can gain equity or make a profit by holding a property for just a few years,” Compass agent Carl Gambino said. 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 capitalize on 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 a lot of the country’s real estate market remains in flux as interest rates keep rising, there are some areas that are showing to be solid performers. “There still are pockets in the country where sellers are seeing their homes not just closing fast but also commanding higher prices than they did last year,” noted USA Today. And many opportunities are in more affordable markets in the Midwest and South, such as Davenport, Iowa; Minneapolis, Minnesota; Little Rock, Arkansas and McAllen, Texas.
Pay attention to foreclosures in your target area. Unfortunately, with the way the economy is going, it could 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.” Though, Forbes advised to work with experienced teams since it’s a complex transaction.
Don’t spend too much on renovations. While some people who watch a lot of HGTV think flipping a house involves a whole 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 elaborate renovations, the higher you’ll have to price the house to make a profit, 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 will quickly turn into a buyer’s market. Forbes cited 44% of economists who forecasted the switch. “The talk of reduced mortgage rates by year’s end will provide more opportunities to invest in real estate, whether for flipping or renting,” the outlet declared.
Or, rent out 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 housing) to pay dividends while waiting for the market to improve.
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