Ultimate Athens Real Estate Investing Guide for 2024

The abbreviation BRRRR is a description of a long-term investment plan — Buy, Rehab, Rent, Refinance, Repeat. If you plan to increase your investments, the BRRRR is an excellent plan to follow. An important component of this plan is to be able to take a “cash-out” refinance.

You improve the worth of the property beyond the amount you spent buying and rehabbing the asset. Then you take the value you generated from the investment property in a “cash-out” refinance. This cash is placed into another investment asset, and so on. You add income-producing investment assets to your portfolio and rental revenue to your cash flow.

When an investor owns a significant portfolio of investment homes, it seems smart to hire a property manager and designate a passive income source. Locate the best real estate management companies in Athens WV by browsing our directory.

Factors to Consider

Population Growth

The expansion or fall of a market’s population is a good gauge of the region’s long-term attractiveness for rental property investors. If the population growth in a city is strong, then more renters are likely coming into the area. Employers consider this community as promising region to move their company, and for workers to move their families. Rising populations maintain a strong renter mix that can keep up with rent growth and home purchasers who assist in keeping your asset values high.

Property Taxes

Real estate taxes, similarly to insurance and maintenance expenses, may be different from place to market and have to be reviewed carefully when predicting possible returns. Unreasonable real estate tax rates will decrease a property investor’s returns. High property tax rates may show a fluctuating location where costs can continue to expand and must be thought of as a warning.

Price to Rent Ratio

The price to rent ratio (p/r) is a clue to how high of a rent can be demanded in comparison to the market worth of the investment property. If median property prices are strong and median rents are low — a high p/r — it will take more time for an investment to recoup your costs and achieve good returns. The lower rent you can charge the higher the price-to-rent ratio, with a low p/r signalling a more robust rent market.

Median Gross Rents

Median gross rents let you see whether a community’s lease market is strong. You need to find a market with repeating median rent increases. If rental rates are going down, you can drop that city from deliberation.

Median Population Age

Median population age in a strong long-term investment environment must show the normal worker’s age. You’ll find this to be true in areas where workers are relocating. If you see a high median age, your source of renters is going down. This is not good for the future economy of that city.

Employment Base Diversity

A varied employment base is something a wise long-term rental property owner will look for. If the locality’s workers, who are your renters, are hired by a diverse combination of employers, you cannot lose all all tenants at once (together with your property’s value), if a major employer in the area goes bankrupt.

Unemployment Rate

You won’t be able to reap the benefits of a secure rental income stream in an area with high unemployment. Normally successful companies lose customers when other companies lay off employees. Those who continue to have workplaces may find their hours and wages cut. Even tenants who are employed may find it a burden to pay rent on time.

Income Rates

Median household and per capita income stats show you if a high amount of preferred tenants dwell in that area. Your investment planning will include rental fees and property appreciation, which will be based on salary raise in the city.

Number of New Jobs Created

An expanding job market results in a consistent supply of tenants. New jobs equal a higher number of renters. This allows you to acquire more rental assets and backfill existing vacancies.

School Ratings

School rankings in the city will have a significant impact on the local real estate market. When an employer explores a region for possible expansion, they know that first-class education is a must-have for their employees. Moving companies relocate and attract prospective tenants. New arrivals who need a residence keep housing market worth up. For long-term investing, look for highly respected schools in a considered investment location.

Property Appreciation Rates

The foundation of a long-term investment plan is to keep the property. You have to make sure that your property assets will rise in market value until you need to move them. You do not need to allot any time exploring cities that have poor property appreciation rates.

A short-term rental is a furnished residence where a renter lives for less than one month. The per-night rental rates are usually higher in short-term rentals than in long-term units. Because of the increased rotation of tenants, short-term rentals require additional recurring maintenance and sanitation.

Short-term rentals are used by individuals traveling for business who are in the area for a couple of nights, people who are moving and need transient housing, and sightseers. Any homeowner can convert their home into a short-term rental with the tools offered by virtual home-sharing sites like VRBO and AirBnB. This makes short-term rental strategy a feasible technique to try residential real estate investing.

Destination rental landlords require dealing one-on-one with the renters to a larger extent than the owners of longer term rented properties. This dictates that property owners handle disagreements more frequently. Think about defending yourself and your portfolio by adding any of property law attorneys in Athens WV to your network of professionals.

Factors to Consider

Short-Term Rental Income

First, compute the amount of rental revenue you should earn to meet your estimated profits. Being aware of the usual rate of rental fees in the market for short-term rentals will allow you to choose a desirable community to invest.

Median Property Prices

Thoroughly evaluate the amount that you are able to spend on additional investment properties. The median market worth of real estate will show you whether you can afford to be in that city. You can also use median prices in targeted neighborhoods within the market to choose communities for investment.

Price Per Square Foot

Price per sq ft gives a basic picture of property values when looking at similar real estate. If you are examining similar kinds of real estate, like condos or detached single-family residences, the price per square foot is more reliable. If you keep this in mind, the price per square foot may give you a broad idea of property prices.

Short-Term Rental Occupancy Rate

A peek into the city’s short-term rental occupancy levels will inform you whether there is a need in the site for additional short-term rentals. If almost all of the rental units are full, that market requires additional rentals. Weak occupancy rates indicate that there are already enough short-term rentals in that city.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a method to estimate the value of an investment venture. Divide the Net Operating Income (NOI) by the amount of cash invested. The answer is a percentage. The higher it is, the quicker your investment will be repaid and you’ll begin generating profits. Financed investment purchases will yield stronger cash-on-cash returns because you will be spending less of your own capital.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) rates are largely employed by real estate investors to calculate the worth of rental properties. An investment property that has a high cap rate and charges average market rental rates has a good market value. Low cap rates signify higher-priced investment properties. The cap rate is calculated by dividing the Net Operating Income (NOI) by the purchase price or market value. This gives you a ratio that is the year-over-year return, or cap rate.

Local Attractions

Short-term rental apartments are desirable in locations where sightseers are attracted by activities and entertainment venues. This includes collegiate sporting events, kiddie sports competitions, colleges and universities, large concert halls and arenas, carnivals, and theme parks. Must-see vacation sites are situated in mountainous and coastal areas, along waterways, and national or state nature reserves.

The fix and flip investment plan requires purchasing a home that demands improvements or renovation, putting added value by enhancing the property, and then reselling it for its full market worth. Your evaluation of repair spendings has to be precise, and you need to be capable of acquiring the property for lower than market worth.

It is critical for you to know what properties are going for in the area. You always want to check the amount of time it takes for real estate to sell, which is illustrated by the Days on Market (DOM) data. As a “house flipper”, you’ll have to liquidate the renovated real estate immediately in order to eliminate maintenance expenses that will reduce your revenue.

Assist determined real estate owners in finding your business by listing your services in our directory of the best Athens home cash buyers and Athens property investors.

Also, team up with Athens bird dogs for real estate investors. These professionals concentrate on rapidly discovering promising investment ventures before they hit the open market.

Factors to Consider

Median Home Price

When you look for a desirable location for property flipping, look at the median housing price in the district. You are looking for median prices that are modest enough to reveal investment possibilities in the city. This is a crucial ingredient of a cost-effective rehab and resale project.

When area data signals a rapid decline in real estate market values, this can highlight the accessibility of potential short sale real estate. You can be notified concerning these possibilities by working with short sale negotiation companies in Athens WV. You’ll uncover additional data about short sales in our article ⁠— How to Buy a Home that Is a Short Sale?.

Property Appreciation Rate

Dynamics relates to the direction that median home values are taking. Stable surge in median prices indicates a vibrant investment environment. Speedy property value surges may suggest a value bubble that isn’t reliable. When you are purchasing and selling rapidly, an erratic environment can hurt your investment.

Average Renovation Costs

Look thoroughly at the possible renovation expenses so you’ll find out if you can reach your projections. Other expenses, like clearances, may shoot up your budget, and time which may also turn into additional disbursement. To draft an accurate financial strategy, you will have to find out whether your construction plans will have to involve an architect or engineer.

Population Growth

Population statistics will tell you whether there is a growing demand for housing that you can provide. If the number of citizens isn’t increasing, there is not going to be a sufficient supply of purchasers for your fixed homes.

Median Population Age

The median citizens’ age will additionally tell you if there are adequate home purchasers in the market. The median age in the city needs to equal the one of the average worker. A high number of such people demonstrates a significant supply of home purchasers. Older individuals are planning to downsize, or relocate into age-restricted or retiree communities.

Unemployment Rate

You want to see a low unemployment level in your investment community. An unemployment rate that is lower than the national average is good. A very reliable investment area will have an unemployment rate less than the state’s average. If you don’t have a dynamic employment base, a city cannot provide you with abundant home purchasers.

Income Rates

Median household and per capita income are a great sign of the robustness of the real estate environment in the location. When property hunters acquire a house, they normally have to get a loan for the home purchase. The borrower’s wage will dictate how much they can afford and whether they can purchase a property. Median income will let you analyze if the typical home purchaser can buy the property you are going to put up for sale. You also want to see salaries that are improving over time. When you need to augment the purchase price of your houses, you want to be sure that your clients’ salaries are also increasing.

Number of New Jobs Created

The number of jobs created on a continual basis reflects whether salary and population growth are sustainable. Residential units are more effortlessly sold in a region with a robust job environment. With more jobs appearing, more prospective homebuyers also relocate to the city from other cities.

Hard Money Loan Rates

Real estate investors who sell rehabbed real estate often utilize hard money funding in place of regular financing. This strategy enables them make lucrative ventures without delay. Discover top-rated hard money lenders in Athens WV so you can compare their costs.

Those who aren’t well-versed in regard to hard money lenders can uncover what they ought to know with our article for newbies — How Do Hard Money Loans Work?.

As a real estate wholesaler, you enter a sale and purchase agreement to buy a property that some other investors might need. However you don’t close on the home: once you control the property, you allow a real estate investor to take your place for a price. The property is sold to the real estate investor, not the wholesaler. The wholesaler does not sell the residential property itself — they only sell the rights to buy it.

The wholesaling form of investing involves the employment of a title company that comprehends wholesale purchases and is savvy about and active in double close transactions. Locate Athens title companies that work with investors by using our directory.

Our comprehensive guide to wholesaling can be found here: A-to-Z Guide to Property Wholesaling. When employing this investment tactic, add your company in our directory of the best real estate wholesalers in Athens WV. This way your potential audience will know about you and reach out to you.

Factors to Consider

Median Home Prices

Median home prices are essential to spotting areas where residential properties are being sold in your real estate investors’ purchase price level. A city that has a large pool of the below-market-value properties that your clients need will have a lower median home purchase price.

A fast decline in real estate prices could lead to a considerable number of ’upside-down’ residential units that short sale investors hunt for. This investment strategy regularly brings numerous different perks. Nevertheless, there might be risks as well. Learn about this from our detailed article Can You Wholesale a Short Sale?. When you decide to give it a go, make sure you employ one of short sale lawyers in Athens WV and mortgage foreclosure attorneys in Athens WV to consult with.

Property Appreciation Rate

Median home value trends are also vital. Many real estate investors, like buy and hold and long-term rental investors, specifically need to know that home prices in the community are going up over time. Shrinking market values indicate an equivalently poor rental and home-selling market and will dismay investors.

Population Growth

Population growth figures are something that investors will consider carefully. An expanding population will need new housing. There are a lot of people who rent and additional customers who buy houses. When a city is shrinking in population, it does not necessitate additional housing and real estate investors will not invest there.

Median Population Age

A desirable housing market for real estate investors is agile in all areas, including tenants, who evolve into homebuyers, who transition into bigger properties. In order for this to take place, there has to be a reliable employment market of prospective tenants and homeowners. If the median population age is equivalent to the age of employed locals, it indicates a reliable property market.

Income Rates

The median household and per capita income demonstrate constant increases over time in communities that are good for real estate investment. Income hike shows a market that can deal with lease rate and housing purchase price surge. That will be vital to the property investors you are trying to draw.

Unemployment Rate

The location’s unemployment numbers will be an important point to consider for any potential sales agreement buyer. High unemployment rate prompts many tenants to delay rental payments or default entirely. Long-term investors will not purchase a property in a place like this. Renters can’t transition up to ownership and current homeowners can’t sell their property and go up to a bigger residence. Short-term investors will not take a chance on being stuck with a house they cannot liquidate quickly.

Number of New Jobs Created

The number of jobs produced on a yearly basis is a critical part of the residential real estate picture. Job formation suggests additional workers who require a place to live. No matter if your buyer pool is comprised of long-term or short-term investors, they will be drawn to a location with regular job opening production.

Average Renovation Costs

An imperative factor for your client investors, specifically house flippers, are renovation expenses in the area. When a short-term investor rehabs a home, they want to be prepared to sell it for more money than the combined sum they spent for the acquisition and the improvements. The less you can spend to renovate a house, the more attractive the city is for your future contract buyers.

Acquiring mortgage notes (loans) works when the mortgage note can be purchased for a lower amount than the remaining balance. The client makes subsequent mortgage payments to the mortgage note investor who is now their current mortgage lender.

Performing loans are loans where the borrower is always on time with their payments. Performing loans give you monthly passive income. Some note investors like non-performing notes because if the mortgage note investor cannot satisfactorily re-negotiate the loan, they can always take the collateral property at foreclosure for a low amount.

At some time, you may build a mortgage note collection and find yourself needing time to service it by yourself. If this develops, you could select from the best mortgage loan servicing companies in Athens WV which will designate you as a passive investor.

If you decide that this plan is ideal for you, include your name in our directory of Athens top promissory note buyers. This will help you become more visible to lenders providing desirable possibilities to note buyers like you.

Factors to Consider

Foreclosure Rates

Investors hunting for current mortgage loans to buy will hope to see low foreclosure rates in the region. High rates might signal opportunities for non-performing mortgage note investors, but they should be cautious. But foreclosure rates that are high sometimes indicate an anemic real estate market where unloading a foreclosed house may be a no easy task.

Foreclosure Laws

It’s important for mortgage note investors to learn the foreclosure laws in their state. They’ll know if the law uses mortgage documents or Deeds of Trust. You might need to get the court’s okay to foreclose on real estate. A Deed of Trust authorizes you to file a public notice and continue to foreclosure.

Mortgage Interest Rates

Acquired mortgage notes contain a negotiated interest rate. Your mortgage note investment return will be affected by the mortgage interest rate. Interest rates influence the plans of both sorts of note investors.

The mortgage loan rates charged by conventional mortgage firms are not the same in every market. Private loan rates can be a little higher than conventional interest rates due to the higher risk accepted by private lenders.

Note investors ought to consistently know the current local mortgage interest rates, private and conventional, in possible mortgage note investment markets.

Demographics

An effective note investment plan incorporates a study of the community by using demographic information. The region’s population increase, unemployment rate, employment market growth, income levels, and even its median age provide usable information for you.
A young expanding area with a strong employment base can generate a stable income flow for long-term note investors hunting for performing notes.

The same market could also be advantageous for non-performing mortgage note investors and their exit strategy. If foreclosure is called for, the foreclosed home is more easily sold in a growing real estate market.

Property Values

As a mortgage note investor, you must look for borrowers that have a cushion of equity. This improves the chance that a possible foreclosure liquidation will repay the amount owed. Growing property values help increase the equity in the home as the homeowner lessens the balance.

Property Taxes

Typically, lenders receive the property taxes from the homeowner every month. By the time the taxes are payable, there needs to be adequate money being held to handle them. If mortgage loan payments aren’t current, the mortgage lender will have to either pay the property taxes themselves, or the taxes become past due. If a tax lien is filed, it takes first position over the lender’s loan.

If a municipality has a record of rising property tax rates, the total home payments in that area are constantly increasing. This makes it complicated for financially weak homeowners to make their payments, and the loan could become past due.

Real Estate Market Strength

A location with growing property values has good opportunities for any note investor. It’s crucial to understand that if you have to foreclose on a property, you will not have trouble obtaining a good price for the collateral property.

A vibrant real estate market might also be a potential area for originating mortgage notes. This is a good stream of income for successful investors.

A REIT, or Real Estate Investment Trust, means a company that invests in income-producing real estate. REITs are invented to empower everyday investors to invest in real estate. Shares in REITs are economical for the majority of people.

Participants in such organizations are entirely passive investors. REITs manage investors’ risk with a varied group of properties. Participants have the ability to liquidate their shares at any time. Shareholders in a REIT are not allowed to recommend or select real estate properties for investment. The land and buildings that the REIT chooses to purchase are the assets you invest in.

Real estate investment funds are basically mutual funds that specialize in real estate companies, including REITs. The fund does not own real estate — it owns shares in real estate firms. These funds make it feasible for additional investors to invest in real estate properties. Where REITs are meant to disburse dividends to its members, funds do not. The profit to the investor is generated by appreciation in the worth of the stock.

Investors are able to choose a fund that focuses on specific segments of the real estate business but not particular locations for individual property investment. You must depend on the fund’s managers to select which markets and assets are selected for investment.