Until the past few years, the prices of vacation homes in many areas of the country remained flat, particularly older construction. But according to Robyn Roth, a real estate lawyer in Los Angeles, and coauthor (with Laura Meyer) of Remodel This? A Woman's Guide to Planning and Surviving the Madness of a Home Renovation (Perigee; 2007), the recent increases in the value of real estate in general, coupled with greater demand fueled by more people buying second homes, has led to the flipping of vacation homes.
"Many vacation homes have good bones but require updating," Roth says. "This is particularly true of those owned for many years by one family that might have updated its primary residence during that time, but put little money into their other home they visited only a few times a year."
Tara-Nicholle Nelson, Esq, an experienced real estate broker and author of The Savvy Womanâ€™s Homebuying Handbook (Prosperity Way; 2007), says that because vacation and rental properties have a smaller pool of prospective buyers, she doesn't see these properties flipped as often.
However, she adds, "There is a trend of remodeling 2- to 4-unit properties and reselling them not as a rental, but as individual condos or tenancy-in-common units."
Commercial flipping, on the other hand, is a completely different animal.
"We don't see commercial flips nearly as often, probably because commercial owners tend to care for their properties better than residential, and because most lenders want a 30% down payment to buy a commercial property, so that it is not as leveraged a transaction as buying a home to flip."
Roth adds that so much of commercial real estate is tenant drivenâ€”it is an entirely different area of real estate with a different set of economic factors, depending on the type of property.