Here are the 5 worst states to flip a house

September 11, 2022

Montana Mortgages

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South Dakota’s data points clearly resemble the other states on this list, but one thing stands out above all the rest. South Dakota’s average yield is a very respectable 26.1%, but the take is just $17,750 (via CNBC).

Both of these figures are important when considering an investment, as a large profit margin is always desired. However, the actual dollar amount returned can signal a great opportunity or a difficult road ahead.

Penny stocks, for example, offer investors a unique opportunity to make a kill – if the stock price rises. A stock bought for a dollar only needs to inflate its price by 20 cents to earn a profit of 20% and double the annualized return that stock investors can expect with an indexed portfolio (via Nerd Wallet). But the risk factor associated with a penny stock is far greater than that of a portfolio marked by blue-chip company stocks, index funds and other traditional assets. Stocks could rise by that small margin and net you a nice raise, but to capture the value of that 20%, you’ll need to invest a huge amount of equity that might as well crash.

South Dakota’s average return is a lot like the speculative value provided by penny stocks: if things go as expected, a healthy percentage is expected, but to see a relatively valuable net increase, you’ll need to invest in a number of properties and continue to take advantage of the luck on your side.