Is Auction House Flipping Profitable? (2023 Ultimate Guide)

For a long time, property purchases and “flipping” have been considered excellent ways for ordinary people to elevate their income and increase the quality of their financial state. However, in recent years, you might have heard people cautioning against it due to economic fluctuations and other societal issues. 

So, is flipping auction homes profitable, or should you find another way to escape the 9-to-5 grind and live a better life? 

Let’s find out. 

What is Auction House Flipping and How Does it Work? 

We can’t explain whether or not auction house flipping is profitable until we walk you through exactly what it is. That’s a significant factor in its profitability. 

An auction house flip is when you acquire cheap property that typically has some issues driving its price down, you fix those issues yourself or hire a team to do it, and then you get to sell the newly renovated house for far more than you bought it for. 

That’s why flipping has been held in such high regard for years. You get to make a cheap purchase, and eventually, you get to sell it for a lot more. 

However, it’s more complicated than that when you get into the details. 

The Real Cost of Flipping a House 

Most flippers try to find highly cheap houses. They’ll spend pennies on the dollar compared to average home prices in their buying areas. This is how they make the most profit when they go to sell. 

However, that’s not the actual cost of the home, and that’s where many people mess up. 

When you go to renovate that home, you have to pay for the repairs and changes you make to it. This isn’t a problem if you’re just updating appliances and changing the carpet, but many homes selling cheaply are doing so for a reason. They have some significant issues. 

This is what burns the most flippers because they don’t take that into account, and they end up spending way too much getting a new foundation set or roof installed. Many of the horror stories you hear are because of poor decisions like that. 

Of course, this can be mitigated by doing your due diligence when purchasing the property. 

Selling the Home Has to be Done Correctly 

Another thing that makes people question the profitability of flipping auction houses is the cost it takes to sell the home on top of all the other costs. 

You have to maintain the home’s tax liability, code compliance upkeep, and financing payments until you sell it. You also have to pay real estate services for the work they perform in an attempt to sell it. 

This all adds up on top of the average cost of flipping a home. 

Luckily, the Auction Flippers platform reduces these costs dramatically. It gets your ready-to-flip home in front of a massive audience of buyers, reduces selling costs to a simple fee, and overall lets you maximize your ROI. 

Is Auction House Flipping Profitable? 

So, in conclusion – is auction house flipping profitable? Taking what we’ve learned so far, we can say that it’s still a very profitable venture. But it can quickly become a money sink if you buy properties without paying your due diligence, and if you don’t use the Auction Flipper app to minimize selling costs, the same can happen.