Ultimate Comanche County Real Estate Investing Guide for 2024

The term BRRRR is a description of a long-term rental plan — Buy, Rehab, Rent, Refinance, Repeat. If you want to increase your investments, the BRRRR is a proven method to use. This strategy hinges on your capability to withdraw money out when you refinance.

The After Repair Value (ARV) of the home has to total more than the complete acquisition and improvement costs. Then you borrow a cash-out refinance loan that is calculated on the larger value, and you withdraw the difference. You purchase your next rental with the cash-out sum and do it all over again. You acquire more and more properties and continually expand your lease revenues.

If an investor has a significant portfolio of investment homes, it makes sense to pay a property manager and establish a passive income source. Locate one of the best property management professionals in Comanche County KS with the help of our comprehensive list.

Factors to Consider

Population Growth

The rise or decrease of the population can signal whether that market is desirable to rental investors. If the population increase in a city is strong, then new tenants are definitely moving into the region. The region is appealing to companies and workers to locate, work, and have households. A growing population builds a reliable base of tenants who can stay current with rent bumps, and a strong seller’s market if you want to liquidate your investment assets.

Property Taxes

Property taxes, just like insurance and maintenance costs, may differ from market to market and have to be looked at carefully when estimating potential returns. Investment property situated in steep property tax areas will have smaller returns. Unreasonable real estate tax rates may predict a fluctuating region where expenditures can continue to expand and should be considered a red flag.

Price to Rent Ratio

The price to rent ratio (p/r) is a clue to how high of a rent can be charged in comparison to the acquisition price of the property. The rate you can collect in a market will limit the amount you are able to pay based on how long it will take to recoup those costs. A high p/r signals you that you can demand modest rent in that community, a lower one shows that you can collect more.

Median Gross Rents

Median gross rents are an important illustration of the strength of a rental market. Look for a repeating rise in median rents over time. If rental rates are declining, you can eliminate that city from deliberation.

Median Population Age

Median population age in a strong long-term investment market must equal the usual worker’s age. You’ll learn this to be factual in communities where workers are migrating. A high median age illustrates that the existing population is leaving the workplace with no replacement by younger workers moving there. That is an unacceptable long-term financial scenario.

Employment Base Diversity

Accommodating various employers in the location makes the market not as unstable. When there are only a couple significant hiring companies, and one of such relocates or closes shop, it will lead you to lose paying customers and your real estate market values to drop.

Unemployment Rate

High unemployment equals fewer renters and an unpredictable housing market. The unemployed cannot pay for goods or services. The remaining workers might see their own paychecks cut. Even people who are employed may find it challenging to stay current with their rent.

Income Rates

Median household and per capita income stats help you to see if a high amount of ideal tenants reside in that city. Your investment budget will take into consideration rent and property appreciation, which will be based on wage raise in the market.

Number of New Jobs Created

The strong economy that you are on the lookout for will be generating enough jobs on a consistent basis. A larger amount of jobs mean additional renters. This enables you to buy additional lease properties and replenish current vacancies.

School Ratings

School ratings in the area will have a huge impact on the local residential market. When a business owner assesses a city for possible relocation, they keep in mind that first-class education is a must for their employees. Business relocation provides more renters. Housing prices gain thanks to new workers who are homebuyers. Highly-rated schools are a key requirement for a robust property investment market.

Property Appreciation Rates

Real estate appreciation rates are an essential ingredient of your long-term investment strategy. You need to be certain that your property assets will rise in price until you decide to move them. Small or dropping property appreciation rates should eliminate a community from being considered.

Residential units where tenants stay in furnished units for less than four weeks are referred to as short-term rentals. Short-term rental owners charge a higher rent each night than in long-term rental properties. With tenants moving from one place to the next, short-term rentals have to be repaired and sanitized on a continual basis.

House sellers waiting to move into a new property, holidaymakers, and business travelers who are stopping over in the city for a few days like to rent a residential unit short term. Any property owner can transform their home into a short-term rental unit with the services provided by virtual home-sharing portals like VRBO and AirBnB. Short-term rentals are regarded as a good approach to jumpstart investing in real estate.

Short-term rentals involve interacting with tenants more often than long-term ones. This results in the investor having to constantly manage protests. Consider defending yourself and your portfolio by joining any of investor friendly real estate attorneys in Comanche County KS to your team of professionals.

Factors to Consider

Short-Term Rental Income

First, find out the amount of rental revenue you must have to reach your anticipated profits. A quick look at a market’s present standard short-term rental prices will tell you if that is a strong location for you.

Median Property Prices

Thoroughly evaluate the amount that you are able to spare for additional real estate. Search for areas where the purchase price you count on is appropriate for the current median property values. You can also utilize median market worth in localized areas within the market to select communities for investing.

Price Per Square Foot

Price per square foot may be confusing when you are comparing different buildings. A house with open foyers and high ceilings can’t be compared with a traditional-style residential unit with bigger floor space. Price per sq ft can be a quick method to analyze different communities or properties.

Short-Term Rental Occupancy Rate

The demand for additional rentals in a market may be determined by examining the short-term rental occupancy level. A community that necessitates new rental units will have a high occupancy level. If landlords in the city are having challenges filling their current properties, you will have difficulty renting yours.

Short-Term Rental Cash-on-Cash Return

To know if you should invest your cash in a specific property or region, look at the cash-on-cash return. Take your estimated Net Operating Income (NOI) and divide it by your investment cash budget. The resulting percentage is your cash-on-cash return. The higher the percentage, the sooner your investment will be repaid and you’ll begin gaining profits. If you borrow part of the investment budget and use less of your money, you will see a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) levels are generally used by real property investors to assess the market value of investment opportunities. An investment property that has a high cap rate as well as charges typical market rents has a good market value. When cap rates are low, you can prepare to spend more cash for rental units in that area. The cap rate is calculated by dividing the Net Operating Income (NOI) by the listing price or market value. This shows you a ratio that is the year-over-year return, or cap rate.

Local Attractions

Short-term tenants are often people who visit a community to enjoy a recurrent special activity or visit places of interest. This includes professional sporting tournaments, kiddie sports activities, colleges and universities, large concert halls and arenas, festivals, and theme parks. At certain occasions, locations with outside activities in mountainous areas, at beach locations, or near rivers and lakes will draw large numbers of visitors who want short-term rentals.

The fix and flip approach requires purchasing a home that demands improvements or rebuilding, putting added value by upgrading the property, and then reselling it for its full market price. Your assessment of repair costs has to be correct, and you should be capable of acquiring the property for less than market value.

You also want to evaluate the resale market where the house is positioned. Choose an area with a low average Days On Market (DOM) metric. As a “house flipper”, you’ll need to sell the fixed-up home without delay so you can stay away from upkeep spendings that will reduce your profits.

To help distressed residence sellers discover you, place your firm in our directories of all cash home buyers in Comanche County KS and real estate investment firms in Comanche County KS.

Also, coordinate with Comanche County real estate bird dogs. These professionals concentrate on rapidly discovering profitable investment prospects before they come on the open market.

Factors to Consider

Median Home Price

Median home value data is a valuable indicator for estimating a future investment community. Low median home prices are an indicator that there must be a steady supply of real estate that can be acquired below market value. You have to have lower-priced real estate for a profitable fix and flip.

If market information shows a quick decline in property market values, this can highlight the accessibility of possible short sale properties. Investors who partner with short sale negotiators in Comanche County KS get continual notices concerning potential investment properties. Find out how this is done by reviewing our guide ⁠— How Do I Buy a Short Sale House?.

Property Appreciation Rate

The changes in real property market worth in a city are vital. You need a region where property market values are steadily and continuously ascending. Unsteady value changes aren’t beneficial, even if it’s a significant and unexpected growth. You may end up purchasing high and selling low in an unpredictable market.

Average Renovation Costs

Look carefully at the potential repair costs so you will find out if you can reach your projections. Other costs, such as permits, may shoot up your budget, and time which may also develop into an added overhead. If you are required to show a stamped set of plans, you will have to include architect’s rates in your costs.

Population Growth

Population growth is a strong indicator of the strength or weakness of the location’s housing market. Flat or decelerating population growth is an indicator of a feeble market with not a good amount of buyers to justify your effort.

Median Population Age

The median citizens’ age is a straightforward sign of the presence of possible homebuyers. The median age in the area should be the one of the regular worker. People in the local workforce are the most dependable real estate purchasers. Aging individuals are getting ready to downsize, or move into age-restricted or assisted living neighborhoods.

Unemployment Rate

You need to have a low unemployment rate in your target city. An unemployment rate that is less than the country’s average is good. A very good investment community will have an unemployment rate less than the state’s average. Without a robust employment environment, a market can’t supply you with enough homebuyers.

Income Rates

The citizens’ wage stats tell you if the local economy is strong. When families acquire a property, they typically have to obtain financing for the purchase. Home purchasers’ eligibility to be provided a loan depends on the level of their wages. The median income numbers show you if the market is appropriate for your investment efforts. You also want to see salaries that are improving over time. Building spendings and housing prices go up periodically, and you need to be sure that your prospective homebuyers’ salaries will also improve.

Number of New Jobs Created

The number of employment positions created on a continual basis shows whether salary and population increase are viable. Residential units are more effortlessly liquidated in a market that has a strong job market. New jobs also lure people migrating to the location from elsewhere, which additionally strengthens the local market.

Hard Money Loan Rates

Investors who buy, repair, and sell investment real estate opt to engage hard money instead of conventional real estate funding. This plan enables them complete desirable deals without hindrance. Locate the best private money lenders in Comanche County KS so you may compare their charges.

Those who aren’t knowledgeable regarding hard money financing can uncover what they should understand with our guide for those who are only starting — What Is a Private Money Lender?.

As a real estate wholesaler, you enter a sale and purchase agreement to purchase a house that other investors might need. An investor then ”purchases” the contract from you. The contracted property is bought by the investor, not the real estate wholesaler. The wholesaler doesn’t liquidate the residential property — they sell the rights to buy it.

This strategy includes utilizing a title firm that’s familiar with the wholesale purchase and sale agreement assignment procedure and is qualified and inclined to manage double close transactions. Hunt for title services for wholesale investors in Comanche County KS in our directory.

To learn how real estate wholesaling works, study our insightful guide What Is Wholesaling in Real Estate Investing?. When pursuing this investment tactic, include your company in our directory of the best property wholesalers in Comanche County KS. This will help your potential investor buyers locate and call you.

Factors to Consider

Median Home Prices

Median home prices in the area under consideration will roughly tell you if your real estate investors’ target real estate are positioned there. Below average median purchase prices are a solid indication that there are plenty of homes that can be bought for lower than market price, which investors prefer to have.

A quick drop in the price of property might generate the sudden appearance of properties with owners owing more than market worth that are desired by wholesalers. Short sale wholesalers frequently reap advantages from this strategy. However, be cognizant of the legal risks. Discover more regarding wholesaling short sales with our extensive explanation. Once you’ve resolved to attempt wholesaling these properties, make certain to engage someone on the list of the best short sale law firms in Comanche County KS and the best foreclosure law firms in Comanche County KS to assist you.

Property Appreciation Rate

Median home market value changes explain in clear detail the housing value picture. Investors who plan to resell their investment properties later on, like long-term rental investors, want a market where property prices are increasing. Dropping prices show an equally poor rental and home-selling market and will chase away real estate investors.

Population Growth

Population growth numbers are critical for your prospective contract purchasers. When they realize the population is multiplying, they will decide that additional housing units are required. This combines both rental and ‘for sale’ real estate. A region with a dropping population will not attract the investors you require to purchase your purchase contracts.

Median Population Age

Real estate investors have to work in a vibrant property market where there is a substantial source of renters, first-time homeowners, and upwardly mobile locals moving to more expensive properties. For this to take place, there has to be a steady employment market of potential tenants and homeowners. If the median population age is the age of wage-earning adults, it indicates a reliable residential market.

Income Rates

The median household and per capita income should be rising in a promising residential market that real estate investors want to operate in. If renters’ and home purchasers’ wages are expanding, they can manage surging rental rates and residential property prices. Real estate investors have to have this if they are to achieve their expected profits.

Unemployment Rate

The location’s unemployment rates will be a crucial factor for any potential wholesale property purchaser. High unemployment rate forces many tenants to delay rental payments or miss payments altogether. Long-term investors who count on stable lease income will do poorly in these communities. Investors cannot rely on tenants moving up into their properties when unemployment rates are high. This can prove to be hard to locate fix and flip real estate investors to close your contracts.

Number of New Jobs Created

Understanding how often additional employment opportunities are generated in the region can help you determine if the real estate is positioned in a stable housing market. New residents move into a city that has fresh jobs and they look for a place to live. No matter if your buyer pool is made up of long-term or short-term investors, they will be attracted to a market with constant job opening generation.

Average Renovation Costs

Rehab spendings have a big influence on an investor’s returns. The purchase price, plus the costs of rehabilitation, must be lower than the After Repair Value (ARV) of the property to create profit. The cheaper it is to renovate a house, the friendlier the area is for your potential contract buyers.

Mortgage note investing includes purchasing debt (mortgage note) from a mortgage holder for less than the balance owed. The debtor makes remaining payments to the investor who is now their current mortgage lender.

Performing notes are loans where the homeowner is always on time with their payments. Performing loans earn you long-term passive income. Note investors also buy non-performing mortgage notes that the investors either re-negotiate to help the borrower or foreclose on to buy the property less than actual value.

One day, you might grow a number of mortgage note investments and be unable to oversee the portfolio without assistance. At that point, you may need to utilize our directory of Comanche County top mortgage servicers and reassign your notes as passive investments.

If you find that this plan is ideal for you, insert your name in our list of Comanche County top real estate note buying companies. Showing up on our list puts you in front of lenders who make profitable investment opportunities available to note buyers such as yourself.

Factors to consider

Foreclosure Rates

Performing loan investors are on lookout for areas showing low foreclosure rates. If the foreclosures are frequent, the city could nonetheless be desirable for non-performing note buyers. The neighborhood needs to be robust enough so that investors can foreclose and resell collateral properties if called for.

Foreclosure Laws

Successful mortgage note investors are thoroughly well-versed in their state’s regulations concerning foreclosure. Many states require mortgage documents and some use Deeds of Trust. Lenders may need to receive the court’s okay to foreclose on real estate. A Deed of Trust allows you to file a public notice and proceed to foreclosure.

Mortgage Interest Rates

The interest rate is set in the mortgage notes that are acquired by note investors. That interest rate will undoubtedly influence your investment returns. No matter the type of investor you are, the mortgage loan note’s interest rate will be critical for your estimates.

The mortgage loan rates quoted by traditional mortgage lenders aren’t equal in every market. Private loan rates can be moderately more than conventional mortgage rates considering the higher risk accepted by private mortgage lenders.

Mortgage note investors ought to consistently know the prevailing local interest rates, private and conventional, in potential mortgage note investment markets.

Demographics

When mortgage note buyers are determining where to purchase mortgage notes, they will look closely at the demographic dynamics from possible markets. It’s essential to find out whether a suitable number of residents in the area will continue to have stable jobs and wages in the future.
Performing note buyers need customers who will pay without delay, creating a stable revenue source of mortgage payments.

Non-performing mortgage note purchasers are interested in comparable indicators for other reasons. A strong local economy is prescribed if investors are to reach buyers for collateral properties on which they have foreclosed.

Property Values

Lenders want to see as much equity in the collateral property as possible. When the value isn’t much more than the loan balance, and the lender decides to foreclose, the house might not generate enough to payoff the loan. The combination of mortgage loan payments that lower the mortgage loan balance and yearly property market worth appreciation expands home equity.

Property Taxes

Normally, mortgage lenders collect the house tax payments from the borrower each month. By the time the taxes are payable, there needs to be sufficient money in escrow to pay them. The mortgage lender will have to compensate if the house payments halt or the lender risks tax liens on the property. Property tax liens leapfrog over all other liens.

Since property tax escrows are combined with the mortgage payment, rising property taxes indicate higher mortgage loan payments. This makes it difficult for financially strapped borrowers to stay current, so the mortgage loan could become delinquent.

Real Estate Market Strength

A growing real estate market with good value growth is beneficial for all types of note buyers. It’s important to know that if you need to foreclose on a property, you will not have trouble receiving an appropriate price for the collateral property.

Note investors additionally have a chance to create mortgage notes directly to borrowers in consistent real estate areas. For experienced investors, this is a profitable part of their investment strategy.

A trust buying income-generating properties and that sells shares to others is a REIT — Real Estate Investment Trust. Before REITs were invented, real estate investing was too expensive for the majority of people. Many people currently are capable of investing in a REIT.

Shareholders’ investment in a REIT is passive investment. The exposure that the investors are assuming is diversified within a group of investment assets. Shares in a REIT may be unloaded when it’s beneficial for you. But REIT investors do not have the option to pick particular real estate properties or markets. Their investment is limited to the properties chosen by their REIT.

A Real Estate Investment Fund is a mutual fund that possesses stocks of real estate firms. Any actual property is owned by the real estate companies, not the fund. This is an additional method for passive investors to allocate their portfolio with real estate avoiding the high startup cost or liability. Where REITs must disburse dividends to its members, funds do not. The return to the investor is generated by appreciation in the value of the stock.

You can locate a real estate fund that focuses on a particular type of real estate business, like residential, but you can’t suggest the fund’s investment assets or locations. As passive investors, fund members are glad to let the administration of the fund determine all investment decisions.