Ultimate Burien Real Estate Investing Guide for 2024

The acronym BRRRR is an illustration of a long-term investment plan — Buy, Rehab, Rent, Refinance, Repeat. This is a way to grow your investment assets not just purchase a single income generating property. An important component of this strategy is to be able to obtain a “cash-out” mortgage refinance.

When you have concluded renovating the rental, the value must be higher than your combined acquisition and renovation spendings. Next, you extract the value you generated out of the property in a “cash-out” mortgage refinance. You employ that cash to buy another investment property and the procedure begins again. You add growing assets to your portfolio and rental revenue to your cash flow.

When an investor has a significant portfolio of investment homes, it is wise to pay a property manager and designate a passive income source. Locate Burien real property management professionals when you look through our list of experts.

Factors to Consider

Population Growth

The rise or decline of a market’s population is a valuable barometer of the region’s long-term desirability for rental investors. A growing population usually signals ongoing relocation which means additional renters. Employers view this as a desirable place to move their enterprise, and for workers to situate their households. Increasing populations grow a reliable tenant reserve that can afford rent raises and homebuyers who help keep your investment asset values up.

Property Taxes

Real estate taxes, regular upkeep costs, and insurance specifically hurt your bottom line. Excessive real estate tax rates will negatively impact a property investor’s returns. Locations with high property tax rates aren’t considered a reliable environment for short- and long-term investment and need to be bypassed.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property prices and median rental rates that will signal how much rent the market can allow. The rate you can collect in a region will determine the sum you are able to pay depending on the number of years it will take to repay those costs. The lower rent you can demand the higher the p/r, with a low p/r indicating a stronger rent market.

Median Gross Rents

Median gross rents are a true benchmark of the acceptance of a rental market under examination. You want to discover a location with consistent median rent expansion. If rents are being reduced, you can drop that area from discussion.

Median Population Age

Median population age in a strong long-term investment environment must reflect the normal worker’s age. If people are moving into the region, the median age will not have a problem staying at the level of the labor force. If working-age people aren’t venturing into the area to take over from retirees, the median age will go higher. A vibrant economy can’t be sustained by retirees.

Employment Base Diversity

A diversified employment base is something a smart long-term rental property owner will look for. When the locality’s employees, who are your renters, are spread out across a diversified assortment of companies, you will not lose all all tenants at the same time (as well as your property’s value), if a major employer in the community goes bankrupt.

Unemployment Rate

It’s hard to achieve a secure rental market if there are many unemployed residents in it. Otherwise successful businesses lose customers when other employers retrench workers. This can result in a large number of dismissals or shorter work hours in the city. This may increase the instances of late rents and lease defaults.

Income Rates

Median household and per capita income levels let you know if enough qualified tenants reside in that city. Existing income information will reveal to you if wage raises will allow you to mark up rental charges to hit your income expectations.

Number of New Jobs Created

The robust economy that you are on the lookout for will be generating a high number of jobs on a regular basis. The individuals who take the new jobs will need a residence. This ensures that you will be able to sustain a high occupancy rate and acquire additional assets.

School Ratings

The status of school districts has an undeniable effect on property prices across the community. Highly-ranked schools are a necessity for employers that are looking to relocate. Relocating businesses bring and attract potential renters. Homebuyers who relocate to the city have a positive effect on home prices. For long-term investing, look for highly respected schools in a potential investment market.

Property Appreciation Rates

Property appreciation rates are an integral component of your long-term investment plan. You need to be certain that your assets will increase in market value until you need to liquidate them. You don’t need to allot any time surveying locations that have subpar property appreciation rates.

A short-term rental is a furnished unit where a tenant stays for less than 30 days. Long-term rentals, such as apartments, charge lower rental rates per night than short-term ones. These houses may require more periodic upkeep and cleaning.

Short-term rentals appeal to people traveling for business who are in the area for a couple of days, people who are migrating and want transient housing, and vacationers. Regular property owners can rent their homes on a short-term basis via platforms like AirBnB and VRBO. This makes short-term rentals an easy technique to endeavor residential real estate investing.

The short-term rental business involves dealing with occupants more regularly in comparison with yearly lease units. That means that landlords handle disputes more regularly. Give some thought to handling your liability with the aid of one of the best real estate law firms in Burien WA.

Factors to Consider

Short-Term Rental Income

First, find out how much rental income you should have to achieve your estimated return. A glance at a region’s up-to-date average short-term rental rates will tell you if that is a strong city for your endeavours.

Median Property Prices

When purchasing investment housing for short-term rentals, you should calculate the budget you can spend. The median price of real estate will show you if you can afford to invest in that location. You can calibrate your real estate search by evaluating median values in the community’s sub-markets.

Price Per Square Foot

Price per square foot gives a basic idea of property values when considering comparable properties. If you are comparing similar kinds of real estate, like condos or individual single-family residences, the price per square foot is more consistent. It can be a fast way to analyze multiple sub-markets or residential units.

Short-Term Rental Occupancy Rate

The demand for more rental properties in a region can be verified by examining the short-term rental occupancy level. If almost all of the rental units have few vacancies, that city needs additional rentals. If landlords in the area are having issues renting their current properties, you will have difficulty renting yours.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return can show you if the property is a wise use of your cash. You can compute the cash-on-cash return by determining your Net Operating Income (NOI) and dividing it by your cash being invested. The result comes as a percentage. The higher the percentage, the sooner your investment will be recouped and you’ll start receiving profits. Lender-funded investment purchases can show higher cash-on-cash returns as you are spending less of your own funds.

Average Short-Term Rental Capitalization (Cap) Rates

Another metric indicates the market value of a property as a cash flow asset — average short-term rental capitalization (cap) rate. Usually, the less a property will cost (or is worth), the higher the cap rate will be. When cap rates are low, you can expect to spend more cash for real estate in that area. You can get the cap rate for possible investment property by dividing the Net Operating Income (NOI) by the market worth or asking price of the property. The answer is the per-annum return in a percentage.

Local Attractions

Important public events and entertainment attractions will draw vacationers who need short-term rental properties. This includes professional sporting tournaments, youth sports contests, schools and universities, huge concert halls and arenas, festivals, and theme parks. Popular vacation spots are located in mountain and beach areas, alongside lakes, and national or state parks.

When a property investor acquires a property below market worth, rehabs it and makes it more attractive and pricier, and then disposes of the house for a profit, they are known as a fix and flip investor. The secrets to a lucrative investment are to pay less for the house than its present worth and to precisely compute the amount needed to make it saleable.

It is critical for you to figure out how much properties are selling for in the region. Look for a region with a low average Days On Market (DOM) metric. Disposing of real estate promptly will keep your costs low and secure your returns.

In order that property owners who need to unload their home can easily find you, showcase your status by utilizing our catalogue of the best property cash buyers in Burien WA along with top property investment companies in Burien WA.

Additionally, team up with Burien property bird dogs. Experts on our list specialize in procuring desirable investments while they are still unlisted.

Factors to Consider

Median Home Price

The region’s median home value should help you determine a suitable community for flipping houses. You are on the lookout for median prices that are modest enough to reveal investment possibilities in the community. You need inexpensive properties for a lucrative fix and flip.

When your review entails a rapid drop in housing market worth, it may be a sign that you will discover real estate that meets the short sale criteria. Real estate investors who partner with short sale processors in Burien WA receive regular notifications regarding possible investment properties. You will learn additional data about short sales in our extensive blog post ⁠— What Is the Process of Buying a Short Sale Home?.

Property Appreciation Rate

The changes in property market worth in a region are crucial. You’re eyeing for a reliable appreciation of the area’s property prices. Housing purchase prices in the region need to be increasing consistently, not rapidly. When you’re acquiring and liquidating rapidly, an unstable environment can harm your investment.

Average Renovation Costs

Look thoroughly at the potential renovation costs so you will find out whether you can reach your goals. The time it requires for acquiring permits and the municipality’s requirements for a permit application will also affect your plans. If you have to present a stamped suite of plans, you will have to include architect’s fees in your costs.

Population Growth

Population increase metrics let you take a look at housing need in the market. If there are buyers for your fixed up homes, the numbers will demonstrate a positive population increase.

Median Population Age

The median citizens’ age is a factor that you might not have thought about. The median age in the city needs to equal the age of the regular worker. A high number of such residents reflects a substantial source of homebuyers. The requirements of retirees will most likely not be included your investment venture plans.

Unemployment Rate

You need to have a low unemployment rate in your prospective location. The unemployment rate in a prospective investment region needs to be lower than the country’s average. If it’s also lower than the state average, it’s even more desirable. To be able to acquire your improved houses, your prospective clients need to have a job, and their clients too.

Income Rates

The citizens’ wage stats can brief you if the region’s financial environment is scalable. When home buyers acquire a house, they usually have to take a mortgage for the purchase. To be approved for a home loan, a home buyer cannot be using for a house payment a larger amount than a certain percentage of their wage. You can determine based on the area’s median income whether many individuals in the city can afford to buy your homes. Specifically, income increase is vital if you are looking to expand your investment business. If you need to increase the price of your residential properties, you want to be certain that your customers’ wages are also growing.

Number of New Jobs Created

The number of jobs created each year is valuable data as you consider investing in a specific region. More citizens acquire houses if the city’s financial market is adding new jobs. New jobs also lure wage earners migrating to the city from other places, which further reinforces the property market.

Hard Money Loan Rates

Real estate investors who sell rehabbed properties regularly use hard money financing instead of traditional loans. This enables investors to rapidly purchase undervalued real estate. Look up Burien private money lenders and look at financiers’ charges.

An investor who wants to learn about hard money financing products can find what they are and how to employ them by reviewing our resource for newbies titled What Is Hard Money Lending for Real Estate?.

As a real estate wholesaler, you enter a sale and purchase agreement to buy a property that some other investors might be interested in. However you do not buy the home: after you control the property, you allow someone else to become the buyer for a price. The property under contract is bought by the real estate investor, not the wholesaler. The wholesaler does not sell the residential property — they sell the contract to buy it.

This strategy requires using a title firm that is knowledgeable about the wholesale contract assignment procedure and is qualified and willing to manage double close purchases. Find title services for real estate investors in Burien WA on our list.

To understand how real estate wholesaling works, study our comprehensive guide How Does Real Estate Wholesaling Work?. As you conduct your wholesaling activities, place your name in HouseCashin’s directory of Burien top wholesale real estate companies. This will enable any potential partners to see you and initiate a contact.

Factors to Consider

Median Home Prices

Median home values in the community will tell you if your ideal purchase price level is achievable in that city. A market that has a large pool of the reduced-value investment properties that your customers want will show a below-than-average median home price.

A rapid drop in housing prices may be followed by a large selection of ‘underwater’ residential units that short sale investors hunt for. Wholesaling short sales regularly carries a number of uncommon benefits. However, there could be challenges as well. Find out details concerning wholesaling short sale properties with our complete guide. Once you determine to give it a go, make sure you have one of short sale real estate attorneys in Burien WA and foreclosure law firms in Burien WA to consult with.

Property Appreciation Rate

Median home price movements clearly illustrate the housing value in the market. Some real estate investors, including buy and hold and long-term rental investors, notably need to know that home prices in the region are going up steadily. Both long- and short-term investors will stay away from a region where housing market values are depreciating.

Population Growth

Population growth numbers are essential for your prospective purchase contract purchasers. An expanding population will need additional housing. There are more individuals who lease and more than enough clients who buy houses. If a population is not expanding, it doesn’t require additional residential units and real estate investors will search elsewhere.

Median Population Age

A strong housing market prefers residents who start off renting, then shifting into homebuyers, and then moving up in the residential market. This takes a strong, constant workforce of people who feel optimistic enough to go up in the real estate market. That is why the city’s median age should be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income demonstrate steady increases over time in regions that are ripe for investment. Surges in lease and listing prices will be backed up by improving salaries in the area. That will be critical to the real estate investors you need to work with.

Unemployment Rate

Real estate investors will pay a lot of attention to the city’s unemployment rate. Tenants in high unemployment areas have a difficult time staying current with rent and many will skip payments completely. This upsets long-term investors who plan to rent their real estate. Tenants can’t step up to property ownership and current owners can’t liquidate their property and shift up to a larger home. This makes it difficult to locate fix and flip investors to take on your purchase agreements.

Number of New Jobs Created

The frequency of jobs produced annually is an important component of the housing picture. Workers move into a location that has additional job openings and they require housing. This is beneficial for both short-term and long-term real estate investors whom you count on to buy your sale contracts.

Average Renovation Costs

Rehab expenses have a major effect on a flipper’s returns. Short-term investors, like home flippers, won’t make a profit if the acquisition cost and the improvement expenses amount to more money than the After Repair Value (ARV) of the home. Look for lower average renovation costs.

Note investing involves purchasing a loan (mortgage note) from a lender at a discount. When this occurs, the investor takes the place of the debtor’s mortgage lender.

Loans that are being paid off on time are considered performing notes. Performing loans provide consistent cash flow for you. Non-performing mortgage notes can be rewritten or you may pick up the property for less than face value by completing a foreclosure process.

Ultimately, you could accrue a group of mortgage note investments and lack the ability to handle the portfolio without assistance. In this case, you might employ one of loan servicers in Burien WA that will basically convert your portfolio into passive cash flow.

Should you decide to attempt this investment model, you should put your business in our directory of the best real estate note buyers in Burien WA. When you do this, you’ll be seen by the lenders who announce lucrative investment notes for purchase by investors such as yourself.

Factors to Consider

Foreclosure Rates

Low foreclosure rates are an indication that the area has investment possibilities for performing note investors. Non-performing note investors can cautiously take advantage of cities with high foreclosure rates too. But foreclosure rates that are high can signal a slow real estate market where unloading a foreclosed house could be difficult.

Foreclosure Laws

Experienced mortgage note investors are completely well-versed in their state’s regulations for foreclosure. Are you dealing with a Deed of Trust or a mortgage? With a mortgage, a court has to approve a foreclosure. You simply have to file a public notice and proceed with foreclosure steps if you are utilizing a Deed of Trust.

Mortgage Interest Rates

Acquired mortgage notes come with an agreed interest rate. Your investment profits will be affected by the interest rate. Regardless of which kind of note investor you are, the note’s interest rate will be important for your forecasts.

The mortgage rates charged by traditional mortgage firms aren’t equal in every market. Private loan rates can be moderately higher than traditional interest rates because of the greater risk accepted by private lenders.

A mortgage loan note investor needs to be aware of the private and traditional mortgage loan rates in their markets at any given time.

Demographics

A community’s demographics stats allow mortgage note investors to streamline their work and effectively use their resources. It’s crucial to determine whether enough people in the area will continue to have stable jobs and wages in the future.
Performing note investors require homebuyers who will pay as agreed, creating a stable income source of loan payments.

Non-performing mortgage note buyers are looking at related factors for different reasons. If non-performing note investors have to foreclose, they will need a vibrant real estate market in order to sell the collateral property.

Property Values

The more equity that a homebuyer has in their property, the more advantageous it is for their mortgage loan holder. This enhances the possibility that a potential foreclosure liquidation will repay the amount owed. As loan payments decrease the amount owed, and the market value of the property goes up, the borrower’s equity goes up too.

Property Taxes

Most homeowners pay property taxes to mortgage lenders in monthly installments together with their loan payments. The mortgage lender pays the payments to the Government to make sure the taxes are submitted promptly. If loan payments are not being made, the lender will have to either pay the taxes themselves, or the property taxes become past due. If a tax lien is filed, the lien takes a primary position over the mortgage lender’s loan.

Since tax escrows are collected with the mortgage loan payment, growing taxes indicate higher house payments. Borrowers who are having trouble handling their mortgage payments might fall farther behind and ultimately default.

Real Estate Market Strength

A community with growing property values offers good potential for any note buyer. The investors can be confident that, when necessary, a repossessed property can be liquidated at a price that is profitable.

Note investors additionally have a chance to originate mortgage notes directly to borrowers in consistent real estate markets. This is a desirable source of revenue for accomplished investors.

Some real estate investment firms are organized as trusts termed Real Estate Investment Trusts or REITs. REITs were developed to allow everyday people to buy into properties. The average person can afford to invest in a REIT.

REIT investing is one of the types of passive investing. The exposure that the investors are assuming is spread within a selection of investment real properties. Investors are able to liquidate their REIT shares anytime they wish. Shareholders in a REIT are not able to suggest or select real estate for investment. The properties that the REIT picks to acquire are the ones your capital is used to purchase.

A Real Estate Investment Fund is a mutual fund that possesses stocks of real estate businesses. The investment properties are not owned by the fund — they are possessed by the companies the fund invests in. This is another method for passive investors to diversify their investments with real estate avoiding the high initial cost or risks. Fund members might not collect ordinary distributions the way that REIT shareholders do. The benefit to investors is produced by appreciation in the value of the stock.

You can select a fund that specializes in a targeted category of real estate you’re aware of, but you do not get to select the location of every real estate investment. You have to depend on the fund’s directors to choose which locations and properties are picked for investment.