Ultimate Eau Claire County Real Estate Investing Guide for 2024

BRRRR is an abbreviation of “Buy, Rehab, Rent, Refinance, Repeat”. When you desire to expand your investments, the BRRRR is a good plan to follow. It is critical that you are qualified to obtain a “cash-out” mortgage refinance for the system to be successful.

You enhance the value of the investment asset beyond the amount you spent purchasing and rehabbing the asset. Next, you withdraw the equity you created out of the investment property in a “cash-out” mortgage refinance. You purchase your next investment property with the cash-out capital and do it all over again. You add income-producing investment assets to the portfolio and lease income to your cash flow.

If an investor has a large number of real properties, it seems smart to employ a property manager and establish a passive income source. Locate Eau Claire County property management firms when you go through our directory of experts.

Factors to Consider

Population Growth

The growth or shrinking of the population can indicate if that market is of interest to rental investors. If the population growth in a location is robust, then new renters are definitely moving into the market. Relocating employers are drawn to rising communities providing secure jobs to families who move there. Rising populations maintain a strong renter mix that can keep up with rent bumps and home purchasers who assist in keeping your property prices up.

Property Taxes

Real estate taxes, upkeep, and insurance spendings are investigated by long-term rental investors for calculating expenses to estimate if and how the investment strategy will be viable. Investment assets situated in high property tax locations will provide lower returns. Markets with unreasonable property tax rates are not a reliable situation for short- or long-term investment and need to be bypassed.

Price to Rent Ratio

The price to rent ratio (p/r) is a contrast of median property prices and median lease rates that will indicate how much rent the market can handle. If median property prices are steep and median rents are low — a high p/r — it will take more time for an investment to pay for itself and attain good returns. A large p/r shows you that you can collect lower rent in that market, a small one informs you that you can charge more.

Median Gross Rents

Median gross rents let you see whether an area’s rental market is robust. Hunt for a repeating rise in median rents over time. You will not be able to reach your investment goals in a city where median gross rents are declining.

Median Population Age

The median residents’ age that you are hunting for in a favorable investment environment will be near the age of waged people. If people are moving into the district, the median age will have no problem staying at the level of the workforce. If you find a high median age, your supply of renters is declining. A thriving real estate market can’t be sustained by retired professionals.

Employment Base Diversity

A diverse employment base is something a wise long-term rental property owner will look for. When there are only a couple dominant employers, and either of them moves or goes out of business, it can make you lose tenants and your property market worth to go down.

Unemployment Rate

It is hard to have a stable rental market when there are many unemployed residents in it. Non-working residents cease being customers of yours and of other businesses, which creates a ripple effect throughout the city. Workers who still keep their workplaces can find their hours and incomes cut. This may result in missed rent payments and renter defaults.

Income Rates

Median household and per capita income will reflect if the tenants that you require are living in the region. Increasing incomes also tell you that rental payments can be hiked throughout the life of the rental home.

Number of New Jobs Created

The dynamic economy that you are searching for will generate enough jobs on a regular basis. An environment that adds jobs also increases the amount of stakeholders in the property market. This guarantees that you will be able to keep an acceptable occupancy rate and acquire more real estate.

School Ratings

School quality in the area will have a huge impact on the local property market. Highly-rated schools are a necessity for businesses that are looking to relocate. Business relocation provides more tenants. Homebuyers who relocate to the area have a positive influence on home prices. For long-term investing, be on the lookout for highly ranked schools in a considered investment area.

Property Appreciation Rates

Property appreciation rates are an imperative part of your long-term investment scheme. Investing in properties that you are going to to maintain without being confident that they will rise in market worth is a blueprint for disaster. You don’t need to spend any time looking at areas showing depressed property appreciation rates.

A furnished residential unit where renters reside for shorter than a month is referred to as a short-term rental. Short-term rental businesses charge a steeper rate each night than in long-term rental business. Short-term rental units might require more constant upkeep and sanitation.

Home sellers standing by to move into a new home, vacationers, and individuals traveling on business who are stopping over in the community for a few days prefer to rent a residential unit short term. Regular real estate owners can rent their homes on a short-term basis with websites like AirBnB and VRBO. A simple method to get started on real estate investing is to rent a residential property you currently possess for short terms.

The short-term property rental business requires interaction with renters more regularly in comparison with yearly lease units. Because of this, landlords manage problems repeatedly. You might need to defend your legal bases by engaging one of the good Eau Claire County real estate attorneys.

Factors to Consider

Short-Term Rental Income

You have to determine the amount of rental revenue you are targeting based on your investment plan. A quick look at an area’s recent average short-term rental prices will show you if that is a strong city for your investment.

Median Property Prices

Thoroughly compute the amount that you want to spend on new investment properties. The median values of real estate will tell you if you can manage to participate in that market. You can calibrate your real estate hunt by examining median market worth in the area’s sub-markets.

Price Per Square Foot

Price per square foot gives a general idea of values when considering comparable real estate. A house with open entryways and vaulted ceilings cannot be contrasted with a traditional-style property with bigger floor space. If you take this into consideration, the price per square foot can provide you a basic estimation of real estate prices.

Short-Term Rental Occupancy Rate

A peek into the city’s short-term rental occupancy rate will inform you if there is an opportunity in the site for more short-term rentals. A market that demands more rental units will have a high occupancy level. If the rental occupancy indicators are low, there is not enough demand in the market and you need to look elsewhere.

Short-Term Rental Cash-on-Cash Return

To determine if it’s a good idea to invest your funds in a specific investment asset or city, compute the cash-on-cash return. You can calculate the cash-on-cash return by taking your Net Operating Income (NOI) and dividing it by the cash you are putting in. The result you get is a percentage. High cash-on-cash return means that you will recoup your cash quicker and the investment will be more profitable. If you borrow part of the investment budget and spend less of your own capital, you will see a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This metric shows the comparability of rental property worth to its yearly revenue. High cap rates indicate that rental units are available in that area for decent prices. If cap rates are low, you can assume to pay more cash for investment properties in that region. The cap rate is calculated by dividing the Net Operating Income (NOI) by the listing price or market value. The percentage you will receive is the investment property’s cap rate.

Local Attractions

Short-term tenants are often people who come to a community to enjoy a yearly special event or visit unique locations. Individuals come to specific areas to watch academic and sporting events at colleges and universities, see professional sports, cheer for their kids as they participate in kiddie sports, have fun at yearly fairs, and stop by theme parks. Natural attractions such as mountains, lakes, coastal areas, and state and national parks can also draw prospective tenants.

The fix and flip strategy requires purchasing a home that demands fixing up or renovation, creating additional value by enhancing the building, and then liquidating it for its full market value. Your evaluation of repair expenses must be on target, and you need to be capable of purchasing the property for less than market price.

You also want to understand the housing market where the home is situated. Select a market that has a low average Days On Market (DOM) indicator. To effectively “flip” real estate, you must resell the rehabbed home before you have to shell out capital maintaining it.

So that real property owners who need to get cash for their home can easily find you, highlight your availability by utilizing our list of the best property cash buyers in Eau Claire County WI along with top property investment companies in Eau Claire County WI.

In addition, look for real estate bird dogs in Eau Claire County WI. Specialists on our list specialize in procuring desirable investment opportunities while they’re still under the radar.

Factors to Consider

Median Home Price

The market’s median housing value could help you spot a suitable community for flipping houses. If values are high, there may not be a good reserve of fixer-upper homes available. This is a critical ingredient of a lucrative rehab and resale project.

If your review indicates a sharp weakening in housing market worth, it could be a signal that you’ll discover real property that fits the short sale requirements. You’ll learn about possible investments when you team up with Eau Claire County short sale negotiators. Learn how this works by reading our guide ⁠— How Hard Is It to Buy a Short Sale Home?.

Property Appreciation Rate

Are property prices in the region on the way up, or going down? Steady increase in median values demonstrates a vibrant investment environment. Unsteady value shifts are not good, even if it is a significant and unexpected growth. You may end up buying high and liquidating low in an unsustainable market.

Average Renovation Costs

Look closely at the potential rehab spendings so you’ll find out whether you can achieve your predictions. Other spendings, like permits, may shoot up expenditure, and time which may also turn into an added overhead. You want to be aware whether you will be required to use other specialists, such as architects or engineers, so you can be ready for those expenses.

Population Growth

Population growth statistics provide a peek at housing need in the region. When there are buyers for your rehabbed real estate, the numbers will indicate a robust population growth.

Median Population Age

The median citizens’ age is a direct indication of the supply of qualified home purchasers. When the median age is equal to that of the typical worker, it’s a good sign. A high number of such citizens demonstrates a significant supply of homebuyers. Older people are preparing to downsize, or relocate into age-restricted or retiree neighborhoods.

Unemployment Rate

If you run across a location demonstrating a low unemployment rate, it’s a strong indicator of likely investment opportunities. An unemployment rate that is less than the country’s median is good. When it’s also less than the state average, it’s much better. If you don’t have a vibrant employment base, a city can’t provide you with qualified homebuyers.

Income Rates

Median household and per capita income are an important sign of the stability of the home-buying environment in the region. The majority of people who purchase a house need a home mortgage loan. Their wage will dictate how much they can afford and whether they can buy a property. The median income data show you if the location is appropriate for your investment plan. Search for cities where wages are increasing. Building costs and housing purchase prices go up from time to time, and you want to be certain that your prospective clients’ salaries will also get higher.

Number of New Jobs Created

Finding out how many jobs are generated every year in the city adds to your assurance in a community’s investing environment. Residential units are more easily liquidated in an area with a strong job market. With a higher number of jobs generated, new potential homebuyers also come to the area from other districts.

Hard Money Loan Rates

Fix-and-flip investors normally utilize hard money loans rather than conventional loans. This allows investors to rapidly pick up desirable real estate. Find top hard money lenders for real estate investors in Eau Claire County WI so you can compare their fees.

Investors who aren’t knowledgeable concerning hard money lenders can discover what they ought to know with our detailed explanation for newbie investors — What Is a Private Money Lender?.

In real estate wholesaling, you find a home that investors would consider a lucrative deal and sign a sale and purchase agreement to purchase it. A real estate investor then ”purchases” the purchase contract from you. The real estate investor then completes the acquisition. The real estate wholesaler does not sell the residential property — they sell the contract to buy one.

This method involves employing a title company that is experienced in the wholesale contract assignment operation and is qualified and inclined to coordinate double close deals. Locate Eau Claire County title companies that work with wholesalers by using our directory.

To understand how real estate wholesaling works, read our insightful guide What Is Wholesaling in Real Estate Investing?. As you opt for wholesaling, add your investment project on our list of the best wholesale real estate companies in Eau Claire County WI. This will help any likely customers to see you and get in touch.

Factors to Consider

Median Home Prices

Median home values in the area will tell you if your ideal purchase price point is viable in that location. As real estate investors need properties that are on sale below market value, you will need to find reduced median prices as an indirect tip on the potential supply of residential real estate that you could acquire for lower than market value.

Rapid worsening in real estate market worth could lead to a number of houses with no equity that appeal to short sale investors. Short sale wholesalers can reap benefits using this opportunity. Nonetheless, there may be risks as well. Obtain additional data on how to wholesale a short sale home in our exhaustive explanation. Once you decide to give it a try, make sure you employ one of short sale lawyers in Eau Claire County WI and foreclosure law offices in Eau Claire County WI to consult with.

Property Appreciation Rate

Property appreciation rate completes the median price statistics. Real estate investors who intend to maintain investment properties will want to see that residential property prices are steadily increasing. Both long- and short-term investors will ignore an area where residential prices are depreciating.

Population Growth

Population growth information is an indicator that real estate investors will consider thoroughly. A growing population will need additional residential units. Real estate investors are aware that this will involve both rental and purchased housing. If a place is declining in population, it doesn’t require additional residential units and real estate investors will not be active there.

Median Population Age

A friendly housing market for investors is agile in all areas, especially tenants, who evolve into homeowners, who transition into more expensive houses. In order for this to take place, there has to be a reliable employment market of prospective tenants and homebuyers. When the median population age is the age of working locals, it illustrates a favorable property market.

Income Rates

The median household and per capita income in a strong real estate investment market should be increasing. Income improvement demonstrates a market that can deal with lease rate and housing listing price increases. Real estate investors want this in order to achieve their projected profits.

Unemployment Rate

The community’s unemployment numbers will be a crucial point to consider for any prospective contracted house buyer. Renters in high unemployment communities have a difficult time paying rent on schedule and many will skip payments entirely. Long-term real estate investors who rely on reliable lease payments will lose money in these places. High unemployment causes problems that will keep people from purchasing a house. Short-term investors will not take a chance on getting pinned down with real estate they cannot liquidate without delay.

Number of New Jobs Created

The number of fresh jobs being generated in the area completes an investor’s review of a future investment site. Job production means more employees who need a place to live. Long-term investors, like landlords, and short-term investors which include rehabbers, are attracted to communities with impressive job creation rates.

Average Renovation Costs

Rehab costs have a strong influence on a flipper’s returns. The purchase price, plus the costs of rehabbing, must reach a sum that is less than the After Repair Value (ARV) of the property to ensure profit. Seek lower average renovation costs.

Mortgage note investment professionals purchase a loan from mortgage lenders when the investor can purchase the loan for less than the outstanding debt amount. The client makes remaining loan payments to the note investor who has become their current lender.

Performing loans are loans where the debtor is regularly on time with their payments. Performing notes are a repeating generator of passive income. Non-performing mortgage notes can be rewritten or you may buy the property for less than face value through a foreclosure process.

At some time, you could grow a mortgage note portfolio and find yourself lacking time to manage your loans on your own. In this case, you might employ one of third party loan servicing companies in Eau Claire County WI that would basically convert your portfolio into passive income.

If you determine that this strategy is a good fit for you, include your company in our directory of Eau Claire County top real estate note buying companies. When you’ve done this, you’ll be discovered by the lenders who market lucrative investment notes for acquisition by investors such as yourself.

Factors to consider

Foreclosure Rates

Low foreclosure rates are a sign that the region has opportunities for performing note buyers. High rates might indicate investment possibilities for non-performing note investors, however they have to be careful. The locale should be strong enough so that note investors can complete foreclosure and liquidate properties if called for.

Foreclosure Laws

Experienced mortgage note investors are thoroughly well-versed in their state’s regulations for foreclosure. Are you working with a mortgage or a Deed of Trust? When using a mortgage, a court will have to approve a foreclosure. Investors do not have to have the court’s permission with a Deed of Trust.

Mortgage Interest Rates

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

The mortgage rates quoted by traditional lending companies are not the same everywhere. Private loan rates can be moderately higher than conventional loan rates due to the greater risk accepted by private mortgage lenders.

Mortgage note investors ought to always know the up-to-date market interest rates, private and traditional, in potential note investment markets.

Demographics

A community’s demographics information help note buyers to streamline their work and effectively distribute their assets. The area’s population growth, unemployment rate, job market increase, income standards, and even its median age provide important facts for note buyers.
A young expanding area with a strong job market can provide a reliable income flow for long-term note investors looking for performing mortgage notes.

The identical area might also be advantageous for non-performing mortgage note investors and their end-game strategy. If foreclosure is required, the foreclosed home is more easily liquidated in a good market.

Property Values

Note holders like to find as much equity in the collateral property as possible. If the value isn’t much more than the loan amount, and the lender decides to foreclose, the house might not generate enough to payoff the loan. Rising property values help raise the equity in the home as the homeowner pays down the amount owed.

Property Taxes

Escrows for house taxes are most often given to the lender along with the loan payment. By the time the taxes are payable, there needs to be sufficient money in escrow to handle them. The mortgage lender will need to compensate if the mortgage payments cease or the lender risks tax liens on the property. Tax liens leapfrog over any other liens.

Because tax escrows are combined with the mortgage loan payment, growing taxes mean higher mortgage loan payments. Homeowners who are having a hard time making their mortgage payments might drop farther behind and sooner or later default.

Real Estate Market Strength

A location with increasing property values promises good potential for any mortgage note investor. It is critical to know that if you have to foreclose on a property, you won’t have difficulty getting a good price for it.

Growing markets often create opportunities for note buyers to originate the first mortgage loan themselves. For veteran investors, this is a profitable portion of their business strategy.

A REIT, or Real Estate Investment Trust, is a firm that invests in income-producing real estate. This was originally conceived as a method to empower the regular person to invest in real estate. The typical person is able to come up with the money to invest in a REIT.

REIT investing is a kind of passive investing. The exposure that the investors are taking is distributed among a group of investment real properties. Shares can be sold whenever it is agreeable for the investor. However, REIT investors do not have the ability to select particular real estate properties or markets. The land and buildings that the REIT chooses to buy are the properties you invest in.

Mutual funds owning shares of real estate companies are called real estate investment funds. The fund does not hold properties — it holds shares in real estate companies. Investment funds may be a cost-effective way to combine real estate in your appropriation of assets without unnecessary liability. Where REITs have to disburse dividends to its participants, funds don’t. Like other stocks, investment funds’ values increase and go down with their share value.

Investors are able to choose a fund that focuses on specific segments of the real estate business but not specific locations for each property investment. You have to depend on the fund’s managers to determine which locations and assets are chosen for investment.