Ultimate Concord Real Estate Investing Guide for 2024

The abbreviation BRRRR is a description of a long-term lease plan — Buy, Rehab, Rent, Refinance, Repeat. This is a strategy to increase your investment assets rather than acquire one rental home. This plan hinges on your capability to withdraw cash out when you refinance.

When you are done with improving the home, the value has to be higher than your combined acquisition and rehab expenses. Then you receive a cash-out mortgage refinance loan that is computed on the larger value, and you withdraw the difference. This capital is placed into another investment property, and so on. This plan helps you to steadily expand your assets and your investment income.

When you have built a significant list of income producing assets, you can prefer to allow someone else to handle your rental business while you get mailbox income. Discover one of the best investment property management firms in Concord ME with a review of our exhaustive list.

Factors to Consider

Population Growth

Population growth or contraction signals you if you can expect good results from long-term property investments. If you see good population growth, you can be confident that the community is drawing potential tenants to the location. Moving businesses are attracted to growing communities providing secure jobs to people who move there. This equates to stable renters, greater rental income, and more likely homebuyers when you intend to liquidate your rental.

Property Taxes

Real estate taxes, maintenance, and insurance spendings are considered by long-term rental investors for determining costs to predict if and how the efforts will be viable. Investment homes situated in unreasonable property tax markets will bring less desirable returns. If property tax rates are excessive in a particular area, you probably want to look in a different location.

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 purchase price of the property. If median property prices are steep and median rents are small — a high p/r, it will take longer for an investment to repay your costs and achieve good returns. You will prefer to find a low p/r to be comfortable that you can establish your rents high enough for acceptable returns.

Median Gross Rents

Median gross rents let you see whether a location’s lease market is dependable. You are trying to identify a site with repeating median rent growth. Declining rents are a warning to long-term investor landlords.

Median Population Age

The median residents’ age that you are on the lookout for in a good investment environment will be near the age of waged adults. This may also illustrate that people are migrating into the community. If you see a high median age, your supply of tenants is becoming smaller. That is a poor long-term financial picture.

Employment Base Diversity

A higher supply of businesses in the area will improve your prospects for better profits. When the locality’s workers, who are your renters, are spread out across a diverse combination of businesses, you cannot lose all of them at once (as well as your property’s value), if a significant enterprise in the market goes bankrupt.

Unemployment Rate

High unemployment results in fewer tenants and an unsafe housing market. Out-of-work citizens cease being clients of yours and of related companies, which causes a domino effect throughout the region. Those who continue to keep their workplaces can discover their hours and incomes cut. This could increase the instances of late rent payments and defaults.

Income Rates

Median household and per capita income levels tell you if enough preferred tenants live in that community. Improving salaries also inform you that rental fees can be raised over your ownership of the rental home.

Number of New Jobs Created

The more jobs are continuously being produced in a region, the more reliable your renter inflow will be. New jobs equal new renters. Your plan of leasing and purchasing additional rentals requires an economy that will generate new jobs.

School Ratings

School rankings in the district will have a significant effect on the local residential market. Employers that are thinking about relocating require high quality schools for their workers. Moving businesses relocate and draw prospective renters. New arrivals who are looking for a home keep home prices high. You will not run into a vibrantly expanding residential real estate market without quality schools.

Property Appreciation Rates

Property appreciation rates are an indispensable component of your long-term investment approach. You have to be confident that your investment assets will appreciate in value until you need to sell them. You do not need to allot any time inspecting regions showing subpar property appreciation rates.

Residential units where tenants stay in furnished spaces for less than a month are referred to as short-term rentals. Long-term rental units, like apartments, impose lower rental rates per night than short-term rentals. With renters moving from one place to the next, short-term rental units need to be maintained and cleaned on a regular basis.

Average short-term renters are excursionists, home sellers who are waiting to close on their replacement home, and people on a business trip who prefer more than a hotel room. Any property owner can transform their home into a short-term rental unit with the know-how offered by virtual home-sharing portals like VRBO and AirBnB. This makes short-term rental strategy a feasible technique to try real estate investing.

The short-term rental strategy includes interaction with renters more frequently compared to yearly lease units. That means that landlords face disputes more regularly. You may want to defend your legal bases by working with one of the best Concord investor friendly real estate attorneys.

Factors to Consider

Short-Term Rental Income

You must imagine the level of rental revenue you are searching for according to your investment analysis. A glance at an area’s up-to-date average short-term rental prices will show you if that is a strong area for you.

Median Property Prices

Thoroughly calculate the budget that you can spare for new investment properties. To see whether an area has opportunities for investment, study the median property prices. You can also make use of median market worth in specific areas within the market to select cities for investment.

Price Per Square Foot

Price per square foot can be influenced even by the look and floor plan of residential units. When the styles of potential homes are very different, the price per sq ft might not help you get a precise comparison. If you take note of this, the price per square foot can provide you a general view of local prices.

Short-Term Rental Occupancy Rate

A quick check on the area’s short-term rental occupancy levels will tell you whether there is demand in the market for additional short-term rentals. A community that needs new rental properties will have a high occupancy rate. If the rental occupancy rates are low, there is not enough space in the market and you must search elsewhere.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a way to determine the value of an investment plan. You can calculate the cash-on-cash return by determining your Net Operating Income (NOI) and dividing it by your cash being invested. The resulting percentage is your cash-on-cash return. The higher the percentage, the more quickly your investment funds will be repaid and you’ll begin receiving profits. If you borrow a portion of the investment amount and put in less of your money, you will get a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

One measurement shows the value of a property as a cash flow asset — average short-term rental capitalization (cap) rate. Usually, the less money an investment property costs (or is worth), the higher the cap rate will be. If cap rates are low, you can assume to spend more for real estate in that community. The cap rate is determined by dividing the Net Operating Income (NOI) by the listing price or market worth. The result is the yearly return in a percentage.

Local Attractions

Short-term renters are usually tourists who visit a city to enjoy a recurrent major event or visit tourist destinations. This includes professional sporting tournaments, children’s sports competitions, colleges and universities, huge concert halls and arenas, carnivals, and amusement parks. At specific occasions, places with outdoor activities in mountainous areas, coastal locations, or alongside rivers and lakes will draw lots of visitors who need short-term housing.

The fix and flip approach entails purchasing a property that requires fixing up or rehabbing, creating more value by enhancing the property, and then reselling it for a better market worth. The secrets to a lucrative investment are to pay a lower price for real estate than its actual value and to correctly determine what it will cost to make it sellable.

It’s crucial for you to understand the rates properties are being sold for in the area. The average number of Days On Market (DOM) for houses listed in the area is critical. As a “house flipper”, you’ll want to sell the fixed-up house immediately so you can stay away from maintenance expenses that will lessen your returns.

In order that real property owners who have to unload their property can readily locate you, highlight your status by utilizing our directory of the best cash house buyers in Concord ME along with top real estate investing companies in Concord ME.

Also, coordinate with Concord real estate bird dogs. These specialists concentrate on quickly finding lucrative investment ventures before they come on the marketplace.

Factors to Consider

Median Home Price

When you look for a suitable area for home flipping, look at the median home price in the city. Lower median home values are an indication that there may be an inventory of houses that can be purchased for lower than market worth. This is a key component of a profit-making fix and flip.

When your research indicates a rapid drop in property market worth, it may be a sign that you will discover real property that meets the short sale criteria. You can receive notifications concerning these possibilities by working with short sale processing companies in Concord ME. You’ll find valuable data regarding short sales in our extensive blog post ⁠— What Is the Process to Buy a Short Sale House?.

Property Appreciation Rate

The shifts in real property values in a location are crucial. You want an area where real estate prices are regularly and continuously moving up. Accelerated price growth can suggest a market value bubble that is not sustainable. You could end up purchasing high and selling low in an unreliable market.

Average Renovation Costs

Look thoroughly at the possible repair costs so you will know whether you can achieve your projections. Other spendings, like clearances, can inflate your budget, and time which may also develop into an added overhead. To make an on-target budget, you will have to find out if your plans will have to use an architect or engineer.

Population Growth

Population growth statistics provide a peek at housing demand in the region. If there are buyers for your repaired real estate, it will illustrate a positive population increase.

Median Population Age

The median residents’ age is an indicator that you might not have thought about. If the median age is the same as the one of the typical worker, it’s a positive sign. Individuals in the regional workforce are the most stable real estate purchasers. Individuals who are about to leave the workforce or are retired have very specific residency requirements.

Unemployment Rate

While evaluating a region for investment, search for low unemployment rates. An unemployment rate that is lower than the country’s median is good. If it is also lower than the state average, it’s much more desirable. Jobless people cannot buy your homes.

Income Rates

The residents’ income levels can brief you if the area’s financial market is stable. Most homebuyers normally get a loan to buy a home. The borrower’s salary will dictate the amount they can afford and if they can buy a home. You can determine based on the location’s median income whether a good supply of individuals in the community can afford to buy your properties. Look for places where the income is going up. To keep up with inflation and rising building and material costs, you should be able to periodically mark up your purchase rates.

Number of New Jobs Created

The number of jobs created on a consistent basis reflects whether salary and population increase are feasible. Residential units are more conveniently sold in a region that has a robust job environment. Additional jobs also draw workers moving to the area from another district, which additionally reinforces the real estate market.

Hard Money Loan Rates

Investors who sell renovated properties often utilize hard money funding rather than traditional mortgage. This enables investors to rapidly buy distressed real estate. Discover top hard money lenders for real estate investors in Concord ME so you can review their fees.

In case you are inexperienced with this loan vehicle, understand more by studying our article — What Is Hard Money?.

Wholesaling is a real estate investment plan that entails scouting out homes that are attractive to real estate investors and signing a sale and purchase agreement. A real estate investor then “buys” the contract from you. The real estate investor then finalizes the transaction. The wholesaler does not sell the property under contract itself — they only sell the purchase and sale agreement.

This business requires employing a title company that’s knowledgeable about the wholesale purchase and sale agreement assignment operation and is capable and inclined to coordinate double close deals. Locate Concord investor friendly title companies by utilizing our directory.

Our definitive guide to wholesaling can be viewed here: Property Wholesaling Explained. While you manage your wholesaling activities, place your company in HouseCashin’s list of Concord top investment property wholesalers. That will help any desirable clients to find you and initiate a contact.

Factors to Consider

Median Home Prices

Median home values in the area will tell you if your required price level is viable in that market. A region that has a substantial supply of the reduced-value properties that your clients require will show a below-than-average median home purchase price.

A fast drop in real estate prices may be followed by a considerable selection of ’upside-down’ houses that short sale investors hunt for. Wholesaling short sales regularly delivers a list of different benefits. Nonetheless, it also creates a legal risk. Get more data on how to wholesale a short sale in our exhaustive guide. When you’re prepared to start wholesaling, hunt through Concord top short sale law firms as well as Concord top-rated mortgage foreclosure lawyers directories to find the right counselor.

Property Appreciation Rate

Property appreciation rate enhances the median price statistics. Many investors, including buy and hold and long-term rental landlords, specifically need to see that residential property prices in the region are expanding over time. Both long- and short-term real estate investors will avoid an area where home purchase prices are depreciating.

Population Growth

Population growth data is a contributing factor that your potential investors will be aware of. When the population is growing, new housing is required. Investors are aware that this will involve both leasing and purchased housing units. If a population is not expanding, it does not need additional residential units and investors will search in other locations.

Median Population Age

Investors need to work in a vibrant real estate market where there is a substantial supply of renters, newbie homeowners, and upwardly mobile citizens switching to larger residences. In order for this to take place, there has to be a steady employment market of potential tenants and homeowners. That’s why the location’s median age needs to be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income in a reliable real estate investment market need to be increasing. Income hike proves a location that can deal with rental rate and housing listing price raises. Investors need this in order to reach their estimated profitability.

Unemployment Rate

Real estate investors whom you contact to take on your sale contracts will deem unemployment stats to be a crucial piece of knowledge. Tenants in high unemployment locations have a difficult time staying current with rent and a lot of them will stop making rent payments altogether. Long-term real estate investors will not take a home in a market like that. Real estate investors cannot count on tenants moving up into their houses if unemployment rates are high. This is a concern for short-term investors purchasing wholesalers’ agreements to repair and resell a home.

Number of New Jobs Created

Understanding how soon additional employment opportunities are created in the community can help you determine if the house is situated in a stable housing market. Job production implies a higher number of employees who need a place to live. Long-term investors, such as landlords, and short-term investors like flippers, are attracted to places with strong job creation rates.

Average Renovation Costs

Rehabilitation spendings have a large effect on a rehabber’s returns. Short-term investors, like fix and flippers, will not make money if the acquisition cost and the improvement expenses equal to a larger sum than the After Repair Value (ARV) of the house. The less you can spend to renovate a house, the friendlier the area is for your prospective contract clients.

Investing in mortgage notes (loans) works when the note can be acquired for a lower amount than the face value. When this happens, the investor takes the place of the debtor’s mortgage lender.

Performing notes mean loans where the debtor is consistently current on their loan payments. Performing notes bring repeating cash flow for investors. Some mortgage note investors want non-performing loans because when the mortgage note investor cannot successfully rework the loan, they can always take the collateral property at foreclosure for a low price.

At some point, you might accrue a mortgage note collection and notice you are lacking time to oversee your loans by yourself. At that point, you may want to employ our list of Concord top third party loan servicing companies and reassign your notes as passive investments.

If you find that this plan is perfect for you, put your business in our list of Concord top real estate note buying companies. Joining will help you become more visible to lenders providing lucrative opportunities to note buyers like you.

Factors to Consider

Foreclosure Rates

Note investors searching for current mortgage loans to purchase will hope to uncover low foreclosure rates in the region. High rates could indicate opportunities for non-performing note investors, but they have to be cautious. But foreclosure rates that are high often signal a slow real estate market where getting rid of a foreclosed unit could be challenging.

Foreclosure Laws

Experienced mortgage note investors are completely well-versed in their state’s laws for foreclosure. They will know if their law dictates mortgage documents or Deeds of Trust. A mortgage requires that the lender goes to court for permission to foreclose. Note owners do not have to have the judge’s permission with a Deed of Trust.

Mortgage Interest Rates

Acquired mortgage loan notes have an agreed interest rate. That rate will significantly affect your investment returns. Interest rates impact the strategy of both types of mortgage note investors.

Conventional lenders charge dissimilar mortgage interest rates in different locations of the United States. Loans issued by private lenders are priced differently and may be higher than traditional mortgage loans.

Experienced note investors continuously search the interest rates in their community offered by private and traditional mortgage lenders.

Demographics

An area’s demographics trends assist note buyers to target their efforts and effectively distribute their assets. It is essential to determine if a suitable number of citizens in the region will continue to have reliable jobs and wages in the future.
Note investors who invest in performing mortgage notes hunt for markets where a high percentage of younger individuals maintain good-paying jobs.

Non-performing mortgage note investors are looking at similar components for other reasons. If non-performing note investors have to foreclose, they’ll have to have a stable real estate market in order to unload the defaulted property.

Property Values

The greater the equity that a borrower has in their property, the more advantageous it is for the mortgage lender. If the investor has to foreclose on a mortgage loan without much equity, the foreclosure sale might not even cover the amount invested in the note. Growing property values help improve the equity in the home as the homeowner pays down the balance.

Property Taxes

Escrows for property taxes are typically given to the lender simultaneously with the mortgage loan payment. By the time the property taxes are due, there should be adequate money being held to take care of them. If the borrower stops performing, unless the lender pays the taxes, they will not be paid on time. When taxes are past due, the government’s lien leapfrogs all other liens to the head of the line and is taken care of first.

Since tax escrows are collected with the mortgage payment, growing taxes mean higher mortgage payments. Overdue homeowners may not be able to maintain growing loan payments and might cease paying altogether.

Real Estate Market Strength

A place with appreciating property values has strong potential for any mortgage note investor. The investors can be assured that, when required, a foreclosed collateral can be liquidated at a price that makes a profit.

A growing market might also be a lucrative community for initiating mortgage notes. This is a desirable stream of income for accomplished investors.

A REIT, or Real Estate Investment Trust, means a firm that makes investments in income-generating assets. This was first conceived as a method to empower the typical investor to invest in real estate. Many investors currently are capable of investing in a REIT.

Shareholders’ involvement in a REIT is passive investing. REITs manage investors’ liability with a diversified group of properties. Participants have the option to sell their shares at any moment. One thing you cannot do with REIT shares is to select the investment properties. You are confined to the REIT’s portfolio of properties for investment.

Real estate investment funds are in essence mutual funds that concentrate on real estate companies, such as REITs. The fund does not own properties — it holds shares in real estate firms. This is another method for passive investors to spread their investments with real estate without the high entry-level investment or exposure. Real estate investment funds aren’t required to distribute dividends unlike a REIT. The worth of a fund to an investor is the expected increase of the price of its shares.

You can locate a real estate fund that focuses on a distinct category of real estate company, such as commercial, but you cannot choose the fund’s investment real estate properties or markets. As passive investors, fund shareholders are satisfied to let the directors of the fund handle all investment choices.