Ultimate Delaware County Real Estate Investing Guide for 2024

A long-term wealth growing plan that includes Buying a home, Renovating, Renting, Refinancing it, and Repeating the process by using the cash from the refinance is called BRRRR. If you want to grow your investments, the BRRRR is a proven plan to employ. This plan revolves around your capability to remove money out when you refinance.

When you are done with repairing the investment property, its market value must be higher than your combined acquisition and rehab spendings. Then you borrow a cash-out refinance loan that is based on the larger value, and you pocket the difference. This capital is placed into another investment asset, and so on. You acquire more and more rental homes and continually grow your lease income.

When your investment real estate portfolio is big enough, you might contract out its oversight and enjoy passive cash flow. Locate one of the best investment property management firms in Delaware County OH with a review of our comprehensive directory.

Factors to Consider

Population Growth

The rise or decline of the population can tell you whether that city is of interest to rental investors. A booming population normally demonstrates vibrant relocation which equals new renters. Relocating businesses are drawn to increasing areas providing reliable jobs to people who move there. Rising populations grow a reliable tenant reserve that can keep up with rent increases and homebuyers who help keep your asset values up.

Property Taxes

Property taxes, just like insurance and maintenance spendings, may vary from market to market and should be looked at carefully when predicting potential profits. Excessive expenses in these areas threaten your investment’s returns. If property tax rates are excessive in a specific market, you will need to search somewhere else.

Price to Rent Ratio

Price to rent ratio (p/r) is a market indicator that tells you the amount you can predict to charge for rent. An investor will not pay a steep amount for an investment property if they can only collect a modest rent not letting them to repay the investment in a appropriate timeframe. The less rent you can collect the higher the p/r, with a low p/r showing a stronger rent market.

Median Gross Rents

Median gross rents are a clear illustration of the vitality of a lease market. Median rents must be growing to warrant your investment. If rents are being reduced, you can drop that market from discussion.

Median Population Age

Median population age in a dependable long-term investment environment must reflect the typical worker’s age. This could also illustrate that people are relocating into the community. A high median age shows that the existing population is aging out with no replacement by younger people relocating in. That is a weak long-term financial picture.

Employment Base Diversity

Having diverse employers in the area makes the economy not as unpredictable. When there are only a couple major employers, and one of such relocates or closes down, it will cause you to lose paying customers and your real estate market prices to plunge.

Unemployment Rate

High unemployment leads to smaller amount of tenants and an unpredictable housing market. Jobless citizens can’t be clients of yours and of other companies, which causes a ripple effect throughout the region. The remaining workers might discover their own incomes reduced. This may result in delayed rents and defaults.

Income Rates

Median household and per capita income will hint if the tenants that you prefer are residing in the community. Existing wage records will communicate to you if salary increases will enable you to raise rental charges to meet your investment return predictions.

Number of New Jobs Created

The robust economy that you are on the lookout for will generate a high number of jobs on a regular basis. The people who are hired for the new jobs will have to have a place to live. This allows you to acquire additional rental properties and backfill existing vacant units.

School Ratings

School ratings in the city will have a significant effect on the local housing market. Highly-graded schools are a requirement of business owners that are thinking about relocating. Reliable renters are a consequence of a robust job market. Home market values benefit thanks to additional workers who are buying homes. For long-term investing, be on the lookout for highly endorsed schools in a considered investment market.

Property Appreciation Rates

High real estate appreciation rates are a necessity for a lucrative long-term investment. You want to ensure that the chances of your real estate increasing in price in that location are strong. Inferior or shrinking property value in a region under examination is inadmissible.

A short-term rental is a furnished unit where a tenant stays for shorter than four weeks. Short-term rental businesses charge a steeper price a night than in long-term rental properties. These properties may demand more continual repairs and sanitation.

Normal short-term renters are holidaymakers, home sellers who are relocating, and business travelers who require a more homey place than hotel accommodation. House sharing websites such as AirBnB and VRBO have opened doors to a lot of homeowners to engage in the short-term rental business. A convenient technique to get into real estate investing is to rent a condo or house you already own for short terms.

The short-term property rental business includes interaction with tenants more regularly compared to yearly rental units. This means that landlords deal with disputes more regularly. Consider controlling your exposure with the assistance of one of the good real estate lawyers in Delaware County OH.

Factors to Consider

Short-Term Rental Income

You need to find the range of rental income you’re looking for according to your investment budget. A community’s short-term rental income rates will quickly tell you when you can assume to achieve your projected rental income levels.

Median Property Prices

When buying property for short-term rentals, you have to determine the budget you can pay. Search for areas where the budget you have to have matches up with the current median property prices. You can customize your market survey by analyzing the median values in specific sub-markets.

Price Per Square Foot

Price per square foot can be influenced even by the style and floor plan of residential units. When the designs of available homes are very contrasting, the price per sq ft might not show a correct comparison. It can be a fast way to compare different communities or homes.

Short-Term Rental Occupancy Rate

The need for new rentals in a location may be verified by examining the short-term rental occupancy level. An area that requires new rental units will have a high occupancy rate. If property owners in the area are having challenges filling their existing units, you will have difficulty filling yours.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a way to determine the value of an investment venture. Divide the Net Operating Income (NOI) by the total amount of cash invested. The result you get is a percentage. High cash-on-cash return indicates that you will regain your capital faster and the purchase will earn more profit. Lender-funded purchases will yield higher cash-on-cash returns as you will be utilizing less of your own money.

Average Short-Term Rental Capitalization (Cap) Rates

Another metric conveys the value of a property as a revenue-producing asset — average short-term rental capitalization (cap) rate. A rental unit that has a high cap rate as well as charging typical market rental rates has a strong market value. If investment real estate properties in a city have low cap rates, they generally will cost too much. You can obtain the cap rate for potential investment real estate by dividing the Net Operating Income (NOI) by the market worth or asking price of the residential property. This presents you a percentage that is the yearly return, or cap rate.

Local Attractions

Short-term tenants are usually tourists who visit an area to enjoy a recurring important event or visit tourist destinations. This includes professional sporting events, youth sports competitions, colleges and universities, huge concert halls and arenas, fairs, and theme parks. At particular periods, areas with outdoor activities in the mountains, seaside locations, or near rivers and lakes will draw lots of visitors who want short-term residence.

To fix and flip a residential property, you need to buy it for below market worth, complete any necessary repairs and enhancements, then dispose of it for better market price. The keys to a lucrative fix and flip are to pay less for the home than its full market value and to correctly calculate what it will cost to make it marketable.

Investigate the prices so that you are aware of the actual After Repair Value (ARV). You always need to analyze the amount of time it takes for properties to sell, which is shown by the Days on Market (DOM) information. To successfully “flip” real estate, you have to sell the rehabbed home before you are required to spend money maintaining it.

To help motivated residence sellers discover you, place your firm in our directories of all cash home buyers in Delaware County OH and real estate investment companies in Delaware County OH.

Also, hunt for the best property bird dogs in Delaware County OH. Specialists listed here will assist you by immediately locating possibly lucrative deals prior to the opportunities being sold.

Factors to Consider

Median Home Price

The location’s median home price will help you determine a good neighborhood for flipping houses. You are on the lookout for median prices that are modest enough to hint on investment opportunities in the area. This is a fundamental feature of a fix and flip market.

When your examination entails a fast decrease in property values, it could be a signal that you’ll discover real estate that fits the short sale criteria. You will hear about potential opportunities when you team up with Delaware County short sale specialists. Uncover more regarding this type of investment explained in our guide How to Buy Short Sale Homes.

Property Appreciation Rate

Dynamics relates to the trend that median home values are taking. Stable increase in median values indicates a vibrant investment environment. Volatile market worth changes aren’t beneficial, even if it is a significant and quick growth. Buying at a bad moment in an unreliable market can be disastrous.

Average Renovation Costs

You’ll have to evaluate construction costs in any potential investment market. The manner in which the municipality goes about approving your plans will affect your project as well. You have to understand if you will be required to employ other experts, such as architects or engineers, so you can get ready for those costs.

Population Growth

Population increase is a strong indication of the strength or weakness of the community’s housing market. Flat or negative population growth is a sign of a poor environment with not an adequate supply of purchasers to validate your investment.

Median Population Age

The median population age will additionally show you if there are qualified home purchasers in the market. If the median age is equal to that of the usual worker, it is a good sign. A high number of such citizens demonstrates a significant supply of home purchasers. People who are preparing to exit the workforce or are retired have very restrictive housing requirements.

Unemployment Rate

You want to have a low unemployment rate in your prospective location. It should definitely be less than the US average. A very reliable investment community will have an unemployment rate lower than the state’s average. Jobless people won’t be able to acquire your property.

Income Rates

Median household and per capita income are a reliable gauge of the scalability of the real estate market in the region. Most homebuyers usually obtain financing to purchase a house. Their wage will dictate how much they can borrow and if they can purchase a home. The median income stats will tell you if the market is appropriate for your investment project. In particular, income increase is vital if you plan to grow your investment business. To keep up with inflation and increasing building and supply expenses, you should be able to periodically adjust your purchase rates.

Number of New Jobs Created

The number of jobs created on a steady basis shows if income and population growth are feasible. An increasing job market indicates that a higher number of prospective home buyers are comfortable with purchasing a house there. With additional jobs appearing, new potential buyers also migrate to the region from other locations.

Hard Money Loan Rates

People who buy, renovate, and flip investment properties opt to enlist hard money and not typical real estate loans. This enables them to quickly pick up distressed real property. Discover hard money lending companies in Delaware County OH and analyze their rates.

Anyone who needs to learn about hard money loans can learn what they are as well as how to use them by reading our resource for newbies titled What Is a Hard Money Loan for Real Estate?.

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

Wholesaling hinges on the involvement of a title insurance firm that’s experienced with assigning contracts and understands how to work with a double closing. Find title companies that specialize in real estate property investments in Delaware County OH that we selected for you.

Discover more about this strategy from our extensive guide — Real Estate Wholesaling Explained for Beginners. While you go about your wholesaling activities, insert your name in HouseCashin’s directory of Delaware County top real estate wholesalers. That way your desirable customers will learn about your location and reach out to you.

Factors to Consider

Median Home Prices

Median home prices in the area being considered will roughly show you if your investors’ required investment opportunities are situated there. As real estate investors prefer properties that are on sale for less than market price, you will want to take note of below-than-average median purchase prices as an implicit tip on the possible source of residential real estate that you could purchase for below market price.

A rapid drop in the price of property could cause the sudden appearance of houses with more debt than value that are hunted by wholesalers. Short sale wholesalers often gain advantages using this strategy. However, be aware of the legal challenges. Learn about this from our in-depth blog post Can I Wholesale a Short Sale Home?. If you decide to give it a try, make sure you employ one of short sale law firms in Delaware County OH and real estate foreclosure attorneys in Delaware County OH to work with.

Property Appreciation Rate

Property appreciation rate completes the median price data. Many investors, like buy and hold and long-term rental investors, specifically want to find that home prices in the region are going up steadily. Decreasing prices show an equivalently weak leasing and housing market and will scare away investors.

Population Growth

Population growth statistics are something that investors will look at carefully. An increasing population will require more residential units. This involves both rental and ‘for sale’ real estate. If a place is shrinking in population, it doesn’t necessitate new residential units and investors will not look there.

Median Population Age

Real estate investors have to see a dependable property market where there is a substantial pool of tenants, first-time homeowners, and upwardly mobile locals purchasing better homes. A city with a huge employment market has a strong pool of renters and buyers. An area with these attributes will have a median population age that mirrors the employed adult’s age.

Income Rates

The median household and per capita income should be on the upswing in a friendly housing market that investors want to participate in. Income improvement proves a city that can manage lease rate and home price surge. Property investors avoid communities with declining population wage growth stats.

Unemployment Rate

Real estate investors will pay a lot of attention to the area’s unemployment rate. Delayed lease payments and lease default rates are higher in areas with high unemployment. This impacts long-term investors who plan to lease their investment property. Real estate investors cannot rely on renters moving up into their homes if unemployment rates are high. This can prove to be hard to locate fix and flip real estate investors to take on your contracts.

Number of New Jobs Created

The number of jobs produced every year is an essential component of the housing structure. Additional jobs created lead to more employees who look for houses to lease and purchase. Whether your client base consists of long-term or short-term investors, they will be drawn to a city with regular job opening generation.

Average Renovation Costs

Renovation spendings have a major impact on a flipper’s returns. Short-term investors, like fix and flippers, don’t make a profit if the purchase price and the repair costs amount to more money than the After Repair Value (ARV) of the home. Lower average renovation costs make a place more profitable for your main customers — flippers and long-term investors.

Purchasing mortgage notes (loans) works when the mortgage note can be bought for a lower amount than the remaining balance. When this occurs, the note investor takes the place of the debtor’s lender.

Performing notes mean mortgage loans where the homeowner is always on time with their loan payments. Performing notes earn stable revenue for investors. Non-performing notes can be re-negotiated or you may buy the property for less than face value by completing foreclosure.

At some time, you might accrue a mortgage note portfolio and start needing time to service it by yourself. When this occurs, you could select from the best note servicing companies in Delaware County OH which will designate you as a passive investor.

When you find that this strategy is a good fit for you, include your business in our list of Delaware County top real estate note buying companies. Appearing on our list puts you in front of lenders who make desirable investment opportunities available to note investors such as yourself.

Factors to consider

Foreclosure Rates

Low foreclosure rates are a signal that the market has investment possibilities for performing note purchasers. High rates might signal investment possibilities for non-performing note investors, but they should be cautious. But foreclosure rates that are high often indicate an anemic real estate market where unloading a foreclosed house may be hard.

Foreclosure Laws

It’s necessary for mortgage note investors to study the foreclosure regulations in their state. They will know if the state requires mortgages or Deeds of Trust. With a mortgage, a court has to approve a foreclosure. A Deed of Trust permits the lender to file a notice and continue to foreclosure.

Mortgage Interest Rates

Note investors inherit the interest rate of the mortgage loan notes that they purchase. Your mortgage note investment return will be affected by the interest rate. No matter which kind of mortgage note investor you are, the mortgage loan note’s interest rate will be crucial for your calculations.

The mortgage rates charged by traditional lending institutions are not the same everywhere. Private loan rates can be slightly more than traditional mortgage rates due to the greater risk dealt with by private lenders.

A note buyer should know the private and traditional mortgage loan rates in their areas at any given time.

Demographics

An effective note investment strategy incorporates an assessment of the area by using demographic data. Investors can learn a great deal by estimating the extent of the populace, how many residents have jobs, how much they earn, and how old the people are.
Investors who like performing notes seek areas where a high percentage of younger people have higher-income jobs.

The same place could also be beneficial for non-performing mortgage note investors and their exit strategy. In the event that foreclosure is called for, the foreclosed house is more conveniently unloaded in a strong property market.

Property Values

Mortgage lenders like to find as much home equity in the collateral as possible. If the investor has to foreclose on a mortgage loan with little equity, the foreclosure auction may not even cover the balance invested in the note. As loan payments decrease the balance owed, and the market value of the property appreciates, the homeowner’s equity increases.

Property Taxes

Escrows for property taxes are typically sent to the mortgage lender simultaneously with the loan payment. By the time the taxes are due, there needs to be enough money being held to pay them. The mortgage lender will need to take over if the house payments stop or the investor risks tax liens on the property. Property tax liens take priority over any other liens.

If property taxes keep rising, the homeowner’s mortgage payments also keep increasing. Borrowers who have a hard time making their loan payments could drop farther behind and ultimately default.

Real Estate Market Strength

A strong real estate market showing regular value appreciation is helpful for all types of mortgage note buyers. It is good to know that if you have to foreclose on a property, you won’t have trouble obtaining a good price for the property.

A growing market could also be a profitable place for creating mortgage notes. This is a desirable stream of revenue for accomplished investors.

Many real estate investment firms are formed as a trust called Real Estate Investment Trusts or REITs. Before REITs were invented, investing in properties was too costly for many citizens. Many people these days are capable of investing in a REIT.

REIT investing is known as passive investing. REITs manage investors’ exposure with a varied collection of real estate. Investors are able to unload their REIT shares anytime they wish. Something you can’t do with REIT shares is to select the investment properties. The properties that the REIT decides to purchase are the assets your capital is used to purchase.

A Real Estate Investment Fund is a mutual fund that owns stocks of real estate firms. The investment assets aren’t owned by the fund — they are possessed by the businesses the fund invests in. Investment funds are considered an inexpensive way to combine real estate properties in your allotment of assets without avoidable exposure. Investment funds aren’t required to distribute dividends unlike a REIT. The benefit to the investor is created by changes in the worth of the stock.

You may select a fund that specializes in a selected type of real estate you are expert in, but you do not get to select the geographical area of every real estate investment. You must rely on the fund’s directors to decide which locations and properties are chosen for investment.