Reality TV shows have become a popular form of entertainment, with networks like HGTV and Netflix churning out a slew of shows that glamorize the real estate industry. But how realistic are these shows? We took a closer look at eight popular shows that may appeal to investors and found that while most focus on the design and renovation aspects of investing, a few offer practical tips and relatable challenges that make them worth watching.
Flip or Flop, which aired for 10 seasons on HGTV before ending in 2022, follows the story of formerly married real estate agents Christina Hall and Tarek El Moussa. The couple began flipping houses in Orange County, California after the 2008 real estate crash, typically making all-cash offers on foreclosures and renovating them for a profit. While the show may not always follow the 70% rule of house flipping, which advises against spending more than 70% of a home’s expected after-repair value on a distressed property, it does make for some interesting viewing. In one episode from the final season, titled “Red Hot Flip,” the duo takes a risk by making a $500,000 offer on a home they hope to sell for $700,000, with quoted repair costs of $120,000. However, they face several obstacles, including necessary repiping that increases their repair costs to $140,000. Despite these challenges, they manage to sell the house for $856,500, leaving them with a profit of $187,025 after closing costs. This translates to a 27.9% return on investment (ROI), just slightly below the average of 27.5% for home flips completed in the second quarter of 2023, according to Attom Data. While some may criticize their risky approach, it’s worth noting that most house flippers who aren’t reality TV celebrities would likely turn away from a project with such slim profit margins.
Another show that offers a unique perspective on real estate investing is Stay Here, which aired for one season on Netflix in 2018. Hosted by designer Genevieve Gorder and real estate expert Peter Lorimer, the show helps property owners across the country optimize their vacation homes for added revenue potential. While the show does offer some research-backed tips for increasing cash flow on a short-term rental property, it primarily focuses on the design aspect. Unfortunately, it doesn’t provide information on the budget for renovations or ROI. In the episode “Austin Pool Pad,” the team helps a property in the desirable South Congress neighborhood that suffers from old furniture, a lackluster outdoor space, and a wasted bedroom used as an office. By converting the office into a bedroom, adding a game room, and creating a “social media moment” with an eye-catching mural in the pool area, they are able to update the listing description and highlight the property’s selling points. While the show may not offer concrete financial advice, it does showcase the potential for increasing revenue through strategic design choices.
In conclusion, while many reality TV shows about real estate may not accurately depict the practical aspects of investing, there are a few that offer valuable insights and relatable challenges. Whether you’re a seasoned investor or just looking for some entertaining viewing, these shows are worth checking out.