Ultimate Concordia Real Estate Investing Guide for 2024

The term BRRRR is an illustration of a long-term rental strategy — Buy, Rehab, Rent, Refinance, Repeat. BRRRR is a method for repeated growth. An important piece of this strategy is to be able to receive a “cash-out” refinance.

The After Repair Value (ARV) of the home has to equal more than the combined acquisition and renovation expenses. Then you extract the value you produced from the property in a “cash-out” mortgage refinance. You employ that capital to acquire an additional asset and the process starts anew. This strategy allows you to consistently add to your assets and your investment income.

When an investor has a large portfolio of investment homes, it seems smart to pay a property manager and create a passive income source. Locate one of the best investment property management firms in Concordia KS with a review of our exhaustive list.

Factors to Consider

Population Growth

The expansion or deterioration of a region’s population is a good barometer of the market’s long-term appeal for lease property investors. An increasing population typically demonstrates active relocation which equals additional renters. Employers see such an area as a desirable community to move their enterprise, and for workers to move their families. This equates to dependable renters, higher rental income, and more potential buyers when you need to liquidate the asset.

Property Taxes

Real estate taxes, upkeep, and insurance expenses are examined by long-term rental investors for forecasting expenses to estimate if and how the plan will be successful. High real estate taxes will decrease a real estate investor’s profits. Communities with steep property taxes aren’t considered a stable environment for short- or long-term investment and should be bypassed.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property values and median rental rates that will signal how high of a rent the market can handle. If median home values are high and median rents are small — a high p/r, it will take more time for an investment to repay your costs and achieve good returns. A higher p/r informs you that you can demand lower rent in that area, a low ratio tells you that you can demand more.

Median Gross Rents

Median gross rents are a clear sign of the strength of a lease market. You should find a market with stable median rent expansion. If rental rates are shrinking, you can drop that city from deliberation.

Median Population Age

Median population age will be close to the age of a normal worker if a market has a strong stream of tenants. You’ll learn this to be true in communities where workers are migrating. If you see a high median age, your supply of renters is going down. That is a poor long-term financial prospect.

Employment Base Diversity

A varied employment base is something a smart long-term investor landlord will look for. If people are concentrated in only several dominant employers, even a minor disruption in their operations might cause you to lose a great deal of tenants and expand your risk immensely.

Unemployment Rate

High unemployment means a lower number of renters and an unsteady housing market. Jobless people stop being customers of yours and of related companies, which creates a domino effect throughout the region. Those who continue to keep their workplaces can find their hours and salaries reduced. This could result in missed rents and defaults.

Income Rates

Median household and per capita income will illustrate if the tenants that you require are living in the community. Rising salaries also inform you that rental payments can be raised over your ownership of the rental home.

Number of New Jobs Created

An expanding job market equates to a regular source of tenants. A larger amount of jobs mean more renters. Your strategy of leasing and acquiring additional rentals needs an economy that can provide enough jobs.

School Ratings

Local schools will cause a significant impact on the property market in their neighborhood. When a business explores a community for potential expansion, they know that quality education is a must-have for their workers. Reliable tenants are a by-product of a vibrant job market. Homeowners who move to the area have a positive influence on property prices. Highly-rated schools are an important ingredient for a strong real estate investment market.

Property Appreciation Rates

High property appreciation rates are a prerequisite for a profitable long-term investment. You have to have confidence that your investment assets will grow in market price until you decide to sell them. Subpar or dropping property value in a market under evaluation is not acceptable.

A short-term rental is a furnished unit where a tenant resides for shorter than 30 days. Long-term rental units, like apartments, charge lower payment per night than short-term rentals. With renters not staying long, short-term rentals have to be repaired and cleaned on a constant basis.

Typical short-term tenants are people taking a vacation, home sellers who are in-between homes, and people traveling on business who need something better than hotel accommodation. Regular real estate owners can rent their homes on a short-term basis with websites like AirBnB and VRBO. Short-term rentals are viewed to be a good approach to start investing in real estate.

Short-term rentals require engaging with occupants more often than long-term rentals. As a result, owners manage issues repeatedly. You might want to cover your legal bases by working with one of the best Concordia law firms for real estate.

Factors to Consider

Short-Term Rental Income

You have to define the level of rental income you’re searching for according to your investment plan. Learning about the average amount of rental fees in the community for short-term rentals will allow you to select a good place to invest.

Median Property Prices

When buying real estate for short-term rentals, you need to figure out how much you can pay. The median price of real estate will show you if you can afford to be in that city. You can also utilize median values in particular sub-markets within the market to select communities for investing.

Price Per Square Foot

Price per square foot can be influenced even by the look and layout of residential units. If you are looking at similar kinds of property, like condos or stand-alone single-family residences, the price per square foot is more reliable. It can be a fast way to gauge multiple sub-markets or properties.

Short-Term Rental Occupancy Rate

A quick check on the location’s short-term rental occupancy rate will inform you whether there is demand in the region for additional short-term rental properties. A high occupancy rate indicates that an extra source of short-term rental space is needed. If investors in the area are having problems renting their current properties, you will have difficulty renting yours.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a means to evaluate the value of an investment venture. Divide the Net Operating Income (NOI) by the amount of cash used. The answer you get is a percentage. When a venture is lucrative enough to recoup the amount invested quickly, you’ll receive a high percentage. Mortgage-based investment purchases will show better cash-on-cash returns because you will be spending less of your own cash.

Average Short-Term Rental Capitalization (Cap) Rates

This metric compares rental property value to its per-annum return. Usually, the less money a unit costs (or is worth), the higher the cap rate will be. When investment real estate properties in a city have low cap rates, they generally will cost more. The cap rate is computed by dividing the Net Operating Income (NOI) by the asking price or market value. This gives you a ratio that is the yearly return, or cap rate.

Local Attractions

Short-term tenants are usually individuals who come to a community to attend a yearly special activity or visit unique locations. This includes collegiate sporting events, children’s sports contests, schools and universities, big concert halls and arenas, fairs, and amusement parks. Popular vacation sites are found in mountainous and coastal areas, along rivers, and national or state nature reserves.

To fix and flip a house, you have to pay below market worth, make any needed repairs and upgrades, then liquidate the asset for higher market worth. Your estimate of rehab spendings has to be on target, and you should be capable of buying the house for lower than market worth.

Look into the housing market so that you are aware of the accurate After Repair Value (ARV). You always want to investigate the amount of time it takes for properties to close, which is shown by the Days on Market (DOM) metric. Selling the house quickly will keep your costs low and ensure your profitability.

To help distressed property sellers find you, list your firm in our catalogues of cash real estate buyers in Concordia KS and real estate investment companies in Concordia KS.

Also, look for the best real estate bird dogs in Concordia KS. These specialists specialize in rapidly finding promising investment prospects before they hit the open market.

Factors to Consider

Median Home Price

The region’s median home price should help you locate a desirable neighborhood for flipping houses. You’re on the lookout for median prices that are modest enough to suggest investment opportunities in the market. This is a key element of a lucrative fix and flip.

If regional data signals a sharp decline in real property market values, this can point to the accessibility of possible short sale real estate. You can be notified about these possibilities by partnering with short sale negotiators in Concordia KS. You’ll find valuable data concerning short sales in our article ⁠— How to Buy a Pre-Foreclosure Short Sale Home?.

Property Appreciation Rate

Dynamics means the path that median home prices are taking. Fixed surge in median values shows a strong investment market. Property purchase prices in the community need to be going up constantly, not quickly. Purchasing at an inopportune period in an unstable environment can be problematic.

Average Renovation Costs

You’ll want to evaluate building expenses in any prospective investment area. The time it takes for getting permits and the municipality’s rules for a permit request will also affect your plans. You have to know if you will need to use other specialists, such as architects or engineers, so you can get prepared for those expenses.

Population Growth

Population increase is a strong indicator of the reliability or weakness of the community’s housing market. Flat or decelerating population growth is an indication of a poor environment with not a good amount of purchasers to validate your investment.

Median Population Age

The median residents’ age is a variable that you might not have included in your investment study. The median age in the community must equal the age of the regular worker. A high number of such people reflects a substantial pool of homebuyers. The demands of retired people will probably not be included your investment project plans.

Unemployment Rate

When you find a region that has a low unemployment rate, it’s a good indicator of lucrative investment possibilities. It should always be less than the national average. If the local unemployment rate is lower than the state average, that is a sign of a preferable investing environment. Unemployed people can’t buy your property.

Income Rates

Median household and per capita income numbers tell you if you will find enough home buyers in that community for your residential properties. Most families have to get a loan to purchase a house. Their wage will show how much they can afford and whether they can purchase a home. You can see based on the city’s median income if many people in the location can afford to buy your properties. You also want to see wages that are going up continually. Building costs and home prices go up from time to time, and you want to be certain that your prospective homebuyers’ salaries will also climb up.

Number of New Jobs Created

The number of jobs created per annum is important information as you think about investing in a target region. A larger number of people acquire homes if their local financial market is adding new jobs. New jobs also draw workers arriving to the area from other places, which also reinforces the property market.

Hard Money Loan Rates

Fix-and-flip investors frequently utilize hard money loans instead of conventional loans. This lets them to quickly buy distressed real property. Review Concordia hard money companies and contrast lenders’ costs.

In case you are inexperienced with this financing product, understand more by reading our article — What Is a Hard Money Loan in Real Estate?.

In real estate wholesaling, you search for a home that investors may count as a good opportunity and enter into a purchase contract to buy the property. A real estate investor then ”purchases” the contract from you. The seller sells the property to the real estate investor not the real estate wholesaler. The real estate wholesaler doesn’t sell the property under contract itself — they only sell the rights to buy it.

Wholesaling hinges on the assistance of a title insurance firm that’s comfortable with assigned real estate sale agreements and knows how to work with a double closing. Find Concordia title companies for real estate investors by reviewing our directory.

Read more about how wholesaling works from our complete guide — Real Estate Wholesaling 101. When following this investment strategy, include your company in our list of the best house wholesalers in Concordia KS. This will enable any desirable partners to see you and get in touch.

Factors to Consider

Median Home Prices

Median home prices in the region will inform you if your ideal price level is viable in that market. As investors want investment properties that are on sale below market value, you will need to find reduced median prices as an implicit tip on the possible source of homes that you could buy for less than market worth.

A quick drop in the price of real estate may cause the abrupt appearance of houses with negative equity that are hunted by wholesalers. Short sale wholesalers can reap perks using this opportunity. But, be aware of the legal risks. Get additional data on how to wholesale a short sale with our thorough guide. When you choose to give it a try, make sure you have one of short sale law firms in Concordia KS and foreclosure law offices in Concordia KS to consult with.

Property Appreciation Rate

Median home price changes explain in clear detail the housing value picture. Real estate investors who want to liquidate their properties anytime soon, such as long-term rental landlords, want a location where residential property values are increasing. Shrinking values illustrate an unequivocally weak rental and housing market and will chase away investors.

Population Growth

Population growth numbers are essential for your potential contract buyers. When the population is expanding, new housing is required. Investors are aware that this will combine both rental and owner-occupied housing. If a region is declining in population, it does not require more residential units and real estate investors will not invest there.

Median Population Age

A robust housing market needs residents who are initially renting, then transitioning into homebuyers, and then moving up in the housing market. This requires a robust, consistent workforce of individuals who are confident to move up in the housing market. That’s 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 consistent growth historically in communities that are desirable for investment. Income improvement shows a city that can handle rental rate and housing listing price surge. Property investors stay out of communities with unimpressive population income growth figures.

Unemployment Rate

Investors will carefully evaluate the city’s unemployment rate. Overdue rent payments and lease default rates are widespread in places with high unemployment. Long-term real estate investors won’t purchase a house in a place like this. Tenants can’t level up to homeownership and current owners cannot sell their property and go up to a more expensive house. This is a problem for short-term investors purchasing wholesalers’ contracts to fix and resell a property.

Number of New Jobs Created

Knowing how soon fresh employment opportunities are produced in the city can help you find out if the real estate is located in a stable housing market. New jobs created attract more workers who look for houses to lease and buy. Employment generation is helpful for both short-term and long-term real estate investors whom you depend on to take on your contracts.

Average Renovation Costs

Renovation spendings have a big influence on a rehabber’s profit. When a short-term investor flips a home, they want to be prepared to unload it for more money than the combined cost of the acquisition and the improvements. Seek lower average renovation costs.

Buying mortgage notes (loans) works when the note can be purchased for less than the remaining balance. The borrower makes remaining payments to the investor who has become their current lender.

When a mortgage loan is being repaid on time, it is thought of as a performing loan. Performing notes bring repeating cash flow for investors. Non-performing notes can be restructured or you can acquire the property for less than face value by conducting a foreclosure procedure.

At some point, you may create a mortgage note portfolio and find yourself lacking time to service it by yourself. At that point, you may need to use our directory of Concordia top third party loan servicing companies and reassign your notes as passive investments.

Should you determine that this model is a good fit for you, put your name in our directory of Concordia top companies that buy mortgage notes. Once you’ve done this, you will be discovered by the lenders who announce profitable investment notes for purchase by investors such as yourself.

Factors to Consider

Foreclosure Rates

Investors looking for valuable loans to buy will hope to see low foreclosure rates in the region. Non-performing loan investors can carefully make use of locations that have high foreclosure rates too. The neighborhood ought to be active enough so that note investors can foreclose and unload properties if called for.

Foreclosure Laws

Note investors are required to know the state’s regulations concerning foreclosure before investing in mortgage notes. Are you dealing with a mortgage or a Deed of Trust? Lenders may need to obtain the court’s approval to foreclose on a property. A Deed of Trust permits the lender to file a notice and proceed to foreclosure.

Mortgage Interest Rates

The interest rate is set in the mortgage loan notes that are acquired by mortgage note investors. Your mortgage note investment return will be affected by the mortgage interest rate. No matter which kind of investor you are, the loan note’s interest rate will be crucial to your forecasts.

Conventional interest rates can differ by as much as a 0.25% throughout the US. The higher risk assumed by private lenders is reflected in bigger mortgage loan interest rates for their loans compared to traditional loans.

A mortgage loan note investor ought to be aware of the private and conventional mortgage loan rates in their communities all the time.

Demographics

An area’s demographics details assist mortgage note buyers to streamline their efforts and effectively distribute their resources. The city’s population growth, unemployment rate, employment market growth, pay levels, and even its median age hold pertinent data for you.
Performing note buyers look for customers who will pay as agreed, developing a repeating income stream of loan payments.

Mortgage note investors who seek non-performing mortgage notes can also make use of strong markets. If these investors have to foreclose, they will have to have a stable real estate market to unload the repossessed property.

Property Values

Mortgage lenders want to find as much equity in the collateral as possible. When the value is not significantly higher than the mortgage loan balance, and the mortgage lender decides to foreclose, the home might not generate enough to repay the lender. Rising property values help raise the equity in the house as the homeowner lessens the amount owed.

Property Taxes

Escrows for real estate taxes are normally given to the mortgage lender simultaneously with the loan payment. This way, the mortgage lender makes certain that the property taxes are paid when due. If the homebuyer stops paying, unless the mortgage lender remits the property taxes, they won’t be paid on time. Property tax liens take priority over any other liens.

If a region has a record of rising tax rates, the total house payments in that community are consistently growing. Homeowners who have a hard time making their loan payments could fall farther behind and ultimately default.

Real Estate Market Strength

An active real estate market with regular value appreciation is beneficial for all kinds of note investors. Since foreclosure is a critical element of mortgage note investment planning, appreciating real estate values are important to finding a good investment market.

Mortgage note investors additionally have an opportunity to create mortgage notes directly to borrowers in stable real estate markets. This is a desirable stream of income for accomplished investors.

A REIT, or Real Estate Investment Trust, means a company that makes investments in income-generating real estate. REITs were developed to permit everyday people to invest in properties. The everyday investor is able to come up with the money to invest in a REIT.

Shareholders’ investment in a REIT is passive investing. Investment liability is spread throughout a package of investment properties. Shares in a REIT can be sold when it is convenient for the investor. One thing you cannot do with REIT shares is to select the investment real estate properties. Their investment is limited to the real estate properties owned by their REIT.

A Real Estate Investment Fund is a mutual fund that possesses stocks of real estate companies. Any actual real estate is held by the real estate companies, not the fund. This is an additional way for passive investors to diversify their investments with real estate avoiding the high initial investment or liability. Real estate investment funds are not required to pay dividends unlike a REIT. The value of a fund to someone is the projected increase of the price of its shares.

You can locate a fund that specializes in a distinct kind of real estate firm, such as multifamily, but you cannot propose the fund’s investment assets or locations. You must rely on the fund’s managers to determine which locations and real estate properties are selected for investment.