House Flipping in King County, USA
Using data to decide whether to buy a house, and when to sell it
House flipping is when someone buys a property and holds onto it for a short time and then sells it (the flip part) in the hopes of making a profit. Instead of buying a home to live in, you’re buying a home as a real estate investment.
Sometimes, flipping a house means the temporary owner has to make a lot of repairs or renovations, and other times it’s owning the property until you can sell it for more than you paid for it, plus whatever you put in to fix it up. The goal is to buy low and sell high, invest your own sweat equity to cut costs and earn a profit in a relatively short amount of time — usually within months or a year.
In this challenge we are facing a question that may arise for anyone in flipping - which assets should we buy and how long should we wait before selling them?
To answer the business questions, I started by downloading the public data from Kaggle. The dataset contains house sale prices, and many more features, for King County, which includes Seattle. It contains data from homes sold between May 2014 and May 2015. Usually, people use this dataset to build regression models for predicting house prices. Instead, since I am not interested in building any machine learning model (in this project), my approach relies on getting insights from a well-performed exploratory data analysis (EDA).
All visualizations are available online online. It can be accessed by anyone on mobile or desktop. Click here to be redirected or click on the repository link below to get to my GitHub.
In summary, I delivered a complete data-driven business plan. By parametrizing what is deemed as "good business", it was possible to create indicators of houses well-suited for maximizing profits with flipping. The main insights gotten from the exploratory data analysis reassured some hypotheses and pointed out new ways of doing business.