Ultimate Atchison County Real Estate Investing Guide for 2024

BRRRR is an abbreviation of “Buy, Rehab, Rent, Refinance, Repeat”. This is a way to expand your investment assets not just purchase a single income generating property. It is a must that you are qualified to obtain a “cash-out” mortgage refinance for the plan to be successful.

You add to the worth of the asset beyond the amount you spent acquiring and renovating the property. Then you borrow a cash-out refinance loan that is computed on the larger property worth, and you extract the balance. This money is reinvested into the next asset, and so on. This program helps you to repeatedly increase your assets and your investment income.

If an investor holds a large portfolio of investment homes, it makes sense to pay a property manager and designate a passive income source. Discover Atchison County investment property management companies when you search through our directory of professionals.

Factors to Consider

Population Growth

The rise or fall of the population can signal if that location is appealing to rental investors. If the population increase in a region is high, then new tenants are obviously coming into the community. The community is attractive to employers and workers to locate, find a job, and raise households. This means stable tenants, more rental income, and a greater number of potential buyers when you want to sell your property.

Property Taxes

Property taxes, just like insurance and upkeep costs, can vary from place to place and have to be reviewed carefully when assessing possible returns. High property tax rates will negatively impact a property investor’s income. Locations with high property tax rates are not a dependable environment for short- or long-term investment and need to be avoided.

Price to Rent Ratio

The price to rent ratio (p/r) is a contrast of median property values and median lease rates that will indicate how much rent the market can tolerate. An investor will not pay a steep sum for a house if they can only collect a small rent not letting them to repay the investment within a realistic time. You want to see a lower p/r to be assured that you can establish your rental rates high enough to reach good returns.

Median Gross Rents

Median gross rents are an accurate barometer of the approval of a lease market under discussion. Median rents should be increasing to validate your investment. If rents are being reduced, you can drop that community from deliberation.

Median Population Age

Median population age in a strong long-term investment market should equal the usual worker’s age. If people are resettling into the city, the median age will not have a challenge staying at the level of the labor force. A high median age shows that the current population is aging out without being replaced by younger people moving there. That is an unacceptable long-term financial scenario.

Employment Base Diversity

A varied employment base is something an intelligent long-term investor landlord will look for. If there are only a couple dominant employers, and one of such relocates or disappears, it will make you lose renters and your property market values to decrease.

Unemployment Rate

It is hard to achieve a reliable rental market when there are many unemployed residents in it. People who don’t have a job cannot pay for products or services. People who continue to keep their workplaces may find their hours and salaries reduced. Remaining tenants may delay their rent payments in this scenario.

Income Rates

Median household and per capita income rates help you to see if a high amount of qualified tenants live in that area. Increasing incomes also tell you that rental payments can be increased throughout your ownership of the rental home.

Number of New Jobs Created

The more jobs are constantly being generated in a region, the more reliable your renter source will be. The individuals who are employed for the new jobs will require housing. This enables you to purchase additional rental real estate and fill current unoccupied units.

School Ratings

Community schools can have a huge impact on the property market in their location. Employers that are interested in relocating require superior schools for their employees. Moving employers relocate and attract prospective tenants. New arrivals who are looking for a residence keep housing values strong. For long-term investing, look for highly graded schools in a considered investment market.

Property Appreciation Rates

High property appreciation rates are a necessity for a lucrative long-term investment. You want to make sure that the chances of your asset raising in market worth in that community are strong. Low or decreasing property appreciation rates will exclude a region from consideration.

A short-term rental is a furnished unit where a renter resides for shorter than a month. The per-night rental prices are always higher in short-term rentals than in long-term rental properties. Short-term rental properties could involve more frequent repairs and cleaning.

Usual short-term tenants are excursionists, home sellers who are buying another house, and business travelers who prefer a more homey place than hotel accommodation. House sharing platforms such as AirBnB and VRBO have opened doors to numerous residential property owners to engage in the short-term rental business. A simple way to get into real estate investing is to rent a residential property you already own for short terms.

The short-term rental housing strategy requires dealing with occupants more regularly in comparison with yearly rental properties. That determines that property owners handle disputes more frequently. You may want to cover your legal exposure by engaging one of the top Atchison County real estate lawyers.

Factors to Consider

Short-Term Rental Income

First, calculate the amount of rental revenue you should earn to achieve your projected profits. Understanding the standard amount of rent being charged in the region for short-term rentals will enable you to select a preferable area to invest.

Median Property Prices

Meticulously evaluate the budget that you are able to spend on additional real estate. The median market worth of real estate will tell you whether you can manage to participate in that city. You can also use median prices in particular neighborhoods within the market to choose locations for investing.

Price Per Square Foot

Price per square foot can be confusing if you are comparing different buildings. A home with open foyers and high ceilings can’t be contrasted with a traditional-style residential unit with greater floor space. It can be a quick way to analyze multiple neighborhoods or homes.

Short-Term Rental Occupancy Rate

The ratio of short-term rental properties that are presently tenanted in a city is critical knowledge for a landlord. A high occupancy rate means that an extra source of short-term rentals is needed. If investors in the city are having issues filling their current units, you will have trouble finding renters for yours.

Short-Term Rental Cash-on-Cash Return

To determine if it’s a good idea to invest your cash in a particular rental unit or region, look at the cash-on-cash return. Divide the Net Operating Income (NOI) by the total amount of cash put in. The answer you get is a percentage. If a venture is profitable enough to repay the amount invested soon, you’ll have a high percentage. If you take a loan for a fraction of the investment and put in less of your money, you will receive a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

Another measurement shows the market value of real estate as a revenue-producing asset — average short-term rental capitalization (cap) rate. High cap rates indicate that income-producing assets are accessible in that area for reasonable prices. If investment properties in a location have low cap rates, they usually will cost more. Divide your estimated Net Operating Income (NOI) by the investment property’s market value or asking price. This presents you a percentage that is the year-over-year return, or cap rate.

Local Attractions

Important festivals and entertainment attractions will entice vacationers who want short-term rental houses. This includes professional sporting events, children’s sports contests, schools and universities, big auditoriums and arenas, fairs, and amusement parks. At certain periods, places with outside activities in mountainous areas, coastal locations, or along rivers and lakes will attract crowds of people who require short-term housing.

To fix and flip a home, you need to pay below market value, perform any necessary repairs and upgrades, then liquidate it for full market worth. The secrets to a successful fix and flip are to pay a lower price for the investment property than its existing value and to correctly calculate the amount needed to make it saleable.

It’s vital for you to know what properties are selling for in the area. The average number of Days On Market (DOM) for properties sold in the market is important. As a “house flipper”, you’ll want to sell the upgraded real estate without delay so you can eliminate maintenance expenses that will diminish your revenue.

To help motivated residence sellers locate you, enter your business in our lists of real estate cash buyers in Atchison County MO and property investment firms in Atchison County MO.

Also, hunt for the best bird dogs for real estate investors in Atchison County MO. Experts on our list concentrate on procuring little-known investments while they are still unlisted.

Factors to Consider

Median Home Price

Median real estate price data is a key benchmark for estimating a prospective investment community. If values are high, there might not be a consistent source of run down residential units in the area. This is a vital ingredient of a lucrative investment.

When your research shows a sudden weakening in property values, it may be a sign that you’ll find real property that meets the short sale requirements. You will be notified concerning these opportunities by partnering with short sale processing companies in Atchison County MO. You will learn additional information regarding short sales in our extensive blog post ⁠— What to Expect when Buying a Short Sale Home?.

Property Appreciation Rate

Dynamics means the path that median home market worth is treading. You are eyeing for a stable increase of the area’s real estate market values. Housing values in the community should be going up steadily, not abruptly. Purchasing at an inconvenient time in an unsteady environment can be disastrous.

Average Renovation Costs

A thorough study of the community’s construction costs will make a significant impact on your area selection. The way that the local government goes about approving your plans will have an effect on your investment as well. To draft an on-target financial strategy, you’ll need to find out if your construction plans will have to use an architect or engineer.

Population Growth

Population increase figures provide a look at housing demand in the region. When there are purchasers for your renovated properties, the numbers will illustrate a positive population increase.

Median Population Age

The median residents’ age is a straightforward sign of the supply of possible homebuyers. The median age in the community must be the age of the typical worker. People in the regional workforce are the most reliable house purchasers. People who are about to depart the workforce or are retired have very specific residency needs.

Unemployment Rate

You need to have a low unemployment level in your considered area. An unemployment rate that is lower than the nation’s median is a good sign. If the city’s unemployment rate is lower than the state average, that’s an indicator of a strong investing environment. Jobless people can’t purchase your property.

Income Rates

Median household and per capita income are an important gauge of the robustness of the home-buying environment in the community. The majority of people who acquire residential real estate need a mortgage loan. Homebuyers’ ability to qualify for a loan rests on the level of their income. The median income indicators will show you if the community is good for your investment efforts. You also prefer to see wages that are increasing continually. Building costs and home prices go up from time to time, and you need to be sure that your prospective customers’ salaries will also climb up.

Number of New Jobs Created

Finding out how many jobs are generated annually in the city can add to your assurance in a community’s economy. More citizens acquire houses if their region’s economy is generating jobs. With additional jobs appearing, more potential home purchasers also migrate to the community from other places.

Hard Money Loan Rates

People who acquire, rehab, and flip investment homes opt to employ hard money and not typical real estate funding. Hard money loans empower these investors to pull the trigger on existing investment ventures immediately. Discover hard money loan companies in Atchison County MO and contrast their mortgage rates.

Investors who aren’t knowledgeable regarding hard money lending can find out what they need to learn with our article for newbies — What Is Private Money?.

As a real estate wholesaler, you enter a sale and purchase agreement to buy a residential property that some other real estate investors might need. When a real estate investor who needs the residential property is found, the purchase contract is assigned to the buyer for a fee. The real estate investor then settles the transaction. You’re selling the rights to buy the property, not the house itself.

Wholesaling hinges on the participation of a title insurance company that is comfortable with assignment of real estate sale agreements and comprehends how to deal with a double closing. Discover Atchison County title companies that work with investors by utilizing our directory.

Read more about this strategy from our extensive guide — Real Estate Wholesaling 101. As you opt for wholesaling, include your investment company on our list of the best wholesale real estate companies in Atchison County MO. This way your potential clientele will see you and contact you.

Factors to Consider

Median Home Prices

Median home values in the city under consideration will quickly show you whether your real estate investors’ required real estate are positioned there. A market that has a substantial pool of the reduced-value residential properties that your investors need will display a low median home price.

Accelerated worsening in property values could result in a number of real estate with no equity that appeal to short sale flippers. This investment method regularly brings multiple different advantages. Nevertheless, there might be challenges as well. Discover details concerning wholesaling short sales from our complete instructions. Once you decide to give it a try, make sure you employ one of short sale attorneys in Atchison County MO and foreclosure law firms in Atchison County MO to work with.

Property Appreciation Rate

Median home purchase price changes clearly illustrate the home value in the market. Many real estate investors, such as buy and hold and long-term rental landlords, notably want to know that home market values in the community are growing steadily. A dropping median home price will indicate a vulnerable rental and home-buying market and will eliminate all kinds of real estate investors.

Population Growth

Population growth statistics are something that investors will analyze in greater detail. When the community is multiplying, more housing is needed. This includes both rental and resale real estate. A location that has a shrinking community does not interest the investors you want to buy your contracts.

Median Population Age

Real estate investors have to see a dependable property market where there is a considerable source of tenants, newbie homebuyers, and upwardly mobile citizens purchasing larger homes. A region that has a huge employment market has a consistent pool of renters and buyers. A community with these attributes will display a median population age that is equivalent to the wage-earning resident’s age.

Income Rates

The median household and per capita income show consistent increases continuously in areas that are ripe for investment. When tenants’ and home purchasers’ incomes are going up, they can contend with soaring rental rates and home purchase prices. Investors need this if they are to achieve their anticipated returns.

Unemployment Rate

Investors whom you offer to purchase your contracts will deem unemployment data to be a key piece of information. Delayed rent payments and lease default rates are higher in places with high unemployment. This hurts long-term real estate investors who plan to rent their residential property. High unemployment causes uncertainty that will keep interested investors from buying a house. This is a challenge for short-term investors purchasing wholesalers’ contracts to rehab and flip a property.

Number of New Jobs Created

The amount of new jobs appearing in the market completes a real estate investor’s evaluation of a potential investment location. Additional jobs created draw a high number of employees who require properties to rent and buy. This is beneficial for both short-term and long-term real estate investors whom you depend on to purchase your sale contracts.

Average Renovation Costs

An important variable for your client investors, particularly house flippers, are rehab expenses in the community. When a short-term investor rehabs a house, they have to be able to unload it for a larger amount than the entire sum they spent for the purchase and the repairs. Below average renovation expenses make a market more desirable for your main clients — rehabbers and landlords.

This strategy includes obtaining a loan (mortgage note) from a lender for less than the balance owed. When this occurs, the note investor takes the place of the client’s mortgage lender.

When a mortgage loan is being repaid on time, it’s considered a performing loan. Performing loans earn you monthly passive income. Some mortgage investors want non-performing loans because if the mortgage investor cannot satisfactorily rework the loan, they can always purchase the collateral property at foreclosure for a below market amount.

At some time, you might build a mortgage note collection and find yourself lacking time to manage it on your own. At that stage, you may need to utilize our catalogue of Atchison County top mortgage servicers and redesignate your notes as passive investments.

Should you conclude that this strategy is a good fit for you, insert your business in our directory of Atchison County top real estate note buyers. Joining will help you become more noticeable to lenders providing desirable opportunities to note buyers like yourself.

Factors to consider

Foreclosure Rates

Investors looking for stable-performing mortgage loans to purchase will want to find low foreclosure rates in the market. If the foreclosure rates are high, the community could nonetheless be good for non-performing note buyers. The locale should be strong enough so that investors can complete foreclosure and liquidate collateral properties if necessary.

Foreclosure Laws

Professional mortgage note investors are completely knowledgeable about their state’s laws regarding foreclosure. Are you working with a Deed of Trust or a mortgage? You may need to receive the court’s permission to foreclose on a property. A Deed of Trust authorizes you to file a notice and proceed to foreclosure.

Mortgage Interest Rates

The interest rate is determined in the mortgage loan notes that are acquired by note investors. Your investment return will be affected by the mortgage interest rate. Interest rates affect the strategy of both sorts of note investors.

Traditional lenders price different interest rates in various regions of the US. Private loan rates can be a little more than traditional interest rates due to the greater risk taken on by private lenders.

Experienced note investors regularly review the mortgage interest rates in their region offered by private and traditional mortgage lenders.

Demographics

A market’s demographics data allow mortgage note investors to target their work and effectively use their resources. The market’s population increase, employment rate, employment market growth, income levels, and even its median age provide valuable information for mortgage note investors.
A youthful growing region with a diverse employment base can provide a stable revenue flow for long-term investors searching for performing notes.

The same region might also be appropriate for non-performing note investors and their end-game strategy. When foreclosure is necessary, the foreclosed property is more easily unloaded in a good market.

Property Values

The more equity that a borrower has in their property, the more advantageous it is for you as the mortgage loan holder. When the value is not higher than the loan balance, and the mortgage lender decides to foreclose, the house might not generate enough to payoff the loan. Appreciating property values help raise the equity in the house as the homeowner lessens the balance.

Property Taxes

Usually, lenders accept the property taxes from the homebuyer every month. When the taxes are payable, there needs to be enough money being held to handle them. If the homebuyer stops performing, unless the mortgage lender takes care of the taxes, they will not be paid on time. If a tax lien is put in place, the lien takes first position over the lender’s note.

Because tax escrows are collected with the mortgage loan payment, increasing property taxes mean higher house payments. Past due homeowners may not be able to keep paying rising mortgage loan payments and could stop making payments altogether.

Real Estate Market Strength

A region with increasing property values has excellent opportunities for any note investor. Since foreclosure is a necessary element of mortgage note investment planning, growing real estate values are important to discovering a desirable investment market.

Note investors also have a chance to make mortgage loans directly to borrowers in sound real estate markets. This is a profitable stream of income for successful investors.

Some real estate investment companies are conceived as a trust called Real Estate Investment Trusts or REITs. This was originally done as a way to allow the ordinary investor to invest in real property. The typical person can afford to invest in a REIT.

Shareholders’ participation in a REIT is considered passive investing. The risk that the investors are accepting is spread within a collection of investment properties. Shareholders have the right to sell their shares at any moment. One thing you can’t do with REIT shares is to determine the investment real estate properties. The land and buildings that the REIT picks to purchase are the properties you invest in.

Mutual funds containing shares of real estate businesses are called real estate investment funds. The fund does not own properties — it holds shares in real estate firms. This is another way for passive investors to allocate their investments with real estate avoiding the high entry-level cost or liability. Where REITs are meant to disburse dividends to its members, funds do not. Like other stocks, investment funds’ values go up and decrease with their share market value.

You are able to pick a fund that focuses on specific segments of the real estate industry but not particular areas for each property investment. As passive investors, fund shareholders are happy to allow the directors of the fund handle all investment choices.