Ultimate Exeter Real Estate Investing Guide for 2024

BRRRR stands for “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a system for consistent growth. It is essential that you be able to receive a “cash-out” refinance for the system to be successful.

You add to the worth of the investment asset above what you spent purchasing and fixing the asset. Then you take a cash-out refinance loan that is based on the higher value, and you extract the difference. You use that cash to get another rental and the process begins again. You add improving investment assets to your portfolio and rental income to your cash flow.

When you have built a substantial portfolio of income generating properties, you can choose to find someone else to handle all operations while you enjoy mailbox income. Discover one of property management agencies in Exeter NH with the help of our comprehensive directory.

Factors to Consider

Population Growth

The growth or deterioration of a region’s population is a good gauge of its long-term appeal for rental investors. If the population increase in a region is high, then additional tenants are assuredly coming into the region. The city is attractive to companies and working adults to situate, find a job, and create households. Growing populations develop a reliable tenant pool that can afford rent growth and homebuyers who help keep your investment asset prices up.

Property Taxes

Property taxes, upkeep, and insurance expenses are examined by long-term lease investors for determining expenses to estimate if and how the project will pay off. Steep property taxes will negatively impact a property investor’s returns. High real estate tax rates may indicate an unreliable location where costs can continue to rise and should be thought of as a warning.

Price to Rent Ratio

The price to rent ratio (p/r) is a clue to how high of a rent can be demanded compared to the purchase price of the property. How much you can demand in a location will limit the amount you are willing to pay depending on the number of years it will take to recoup those costs. You need to discover a low p/r to be comfortable that you can establish your rents high enough to reach good profits.

Median Gross Rents

Median gross rents are an important indicator of the stability of a lease market. Median rents should be going up to warrant your investment. You will not be able to realize your investment predictions in a location where median gross rents are being reduced.

Median Population Age

The median residents’ age that you are on the hunt for in a vibrant investment market will be near the age of waged individuals. This could also show that people are relocating into the community. If you find a high median age, your stream of tenants is shrinking. That is a weak long-term financial prospect.

Employment Base Diversity

Accommodating numerous employers in the city makes the market not as risky. If the market’s workpeople, who are your renters, are spread out across a diversified number of companies, you can’t lose all of your renters at the same time (as well as your property’s market worth), if a significant employer in the city goes out of business.

Unemployment Rate

It is a challenge to achieve a sound rental market when there are many unemployed residents in it. Otherwise strong companies lose clients when other employers lay off workers. People who still have workplaces can find their hours and salaries cut. This may result in missed rents and tenant defaults.

Income Rates

Median household and per capita income rates tell you if a high amount of desirable renters live in that community. Current salary figures will reveal to you if salary growth will allow you to adjust rental charges to hit your investment return predictions.

Number of New Jobs Created

A growing job market produces a consistent flow of tenants. The individuals who are employed for the new jobs will require a place to live. This allows you to acquire additional lease properties and fill existing unoccupied units.

School Ratings

The reputation of school districts has a strong impact on real estate values across the area. When a business owner looks at a community for possible expansion, they know that good education is a must-have for their workers. Good tenants are the result of a strong job market. Real estate values increase with additional employees who are homebuyers. For long-term investing, search for highly ranked schools in a prospective investment market.

Property Appreciation Rates

Strong real estate appreciation rates are a prerequisite for a profitable long-term investment. Investing in real estate that you plan to hold without being certain that they will appreciate in price is a recipe for disaster. You do not want to allot any time reviewing cities showing weak property appreciation rates.

Residential real estate where tenants reside in furnished spaces for less than four weeks are called short-term rentals. Long-term rentals, like apartments, impose lower payment per night than short-term rentals. With renters coming and going, short-term rentals need to be repaired and cleaned on a consistent basis.

Home sellers waiting to move into a new residence, backpackers, and business travelers who are staying in the city for a few days prefer renting a residential unit short term. Regular property owners can rent their houses or condominiums on a short-term basis using sites like AirBnB and VRBO. This makes short-term rental strategy a feasible technique to pursue residential property investing.

The short-term rental strategy includes dealing with occupants more frequently in comparison with yearly rental properties. As a result, landlords handle problems regularly. Consider controlling your exposure with the support of any of the good real estate attorneys in Exeter NH.

Factors to Consider

Short-Term Rental Income

You need to calculate how much rental income needs to be earned to make your investment successful. A quick look at a region’s recent average short-term rental rates will tell you if that is a good market for your project.

Median Property Prices

You also need to decide the amount you can bear to invest. The median values of property will tell you if you can afford to participate in that community. You can also use median prices in targeted sub-markets within the market to choose cities for investing.

Price Per Square Foot

Price per square foot can be misleading when you are examining different properties. A house with open entryways and vaulted ceilings cannot be contrasted with a traditional-style property with greater floor space. It may be a fast method to compare multiple sub-markets or buildings.

Short-Term Rental Occupancy Rate

The number of short-term rental properties that are currently rented in a market is crucial knowledge for a rental unit buyer. A community that requires additional rentals will have a high occupancy level. If the rental occupancy indicators are low, there isn’t enough need in the market and you should search somewhere else.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a method to determine the profitability of an investment. Divide the Net Operating Income (NOI) by the total amount of cash invested. The answer will be a percentage. The higher it is, the faster your investment will be returned and you will begin generating profits. When you borrow part of the investment and use less of your own funds, you will receive a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

One measurement shows the market value of an investment property as a return-yielding asset — average short-term rental capitalization (cap) rate. An income-generating asset that has a high cap rate as well as charges average market rental prices has a good market value. Low cap rates signify more expensive properties. The cap rate is computed by dividing the Net Operating Income (NOI) by the listing price or market value. The answer is the yearly return in a percentage.

Local Attractions

Short-term tenants are often travellers who visit a community to attend a recurring significant activity or visit tourist destinations. This includes collegiate sporting tournaments, youth sports activities, colleges and universities, huge concert halls and arenas, carnivals, and amusement parks. At specific periods, areas with outdoor activities in the mountains, coastal locations, or near rivers and lakes will attract a throng of people who require short-term rentals.

When a property investor acquires a property cheaper than its market worth, rehabs it so that it becomes more attractive and pricier, and then resells the house for a return, they are referred to as a fix and flip investor. Your assessment of renovation spendings should be on target, and you need to be able to purchase the home below market price.

You also need to evaluate the resale market where the property is located. Look for a community that has a low average Days On Market (DOM) metric. As a “house flipper”, you’ll have to sell the repaired house right away so you can stay away from upkeep spendings that will lower your profits.

To help motivated property sellers discover you, list your firm in our lists of property cash buyers in Exeter NH and property investment firms in Exeter NH.

Additionally, search for bird dogs for real estate investors in Exeter NH. These specialists concentrate on rapidly discovering lucrative investment ventures before they come on the marketplace.

Factors to Consider

Median Home Price

The location’s median housing price will help you find a suitable neighborhood for flipping houses. Modest median home values are an indicator that there may be an inventory of real estate that can be purchased below market value. You must have lower-priced homes for a profitable deal.

When your review shows a quick decrease in housing values, it might be a heads up that you will uncover real property that meets the short sale criteria. You will hear about possible investments when you partner up with Exeter short sale processing companies. Learn how this is done by reading our guide ⁠— How Do You Buy Short Sale Homes?.

Property Appreciation Rate

Dynamics means the trend that median home values are going. You’re looking for a reliable increase of the city’s home prices. Accelerated market worth increases could indicate a market value bubble that isn’t sustainable. You could wind up purchasing high and liquidating low in an unreliable market.

Average Renovation Costs

You will have to evaluate building expenses in any prospective investment market. Other expenses, like permits, could shoot up expenditure, and time which may also develop into additional disbursement. If you have to have a stamped set of plans, you will need to include architect’s rates in your budget.

Population Growth

Population information will inform you whether there is steady need for houses that you can provide. When the number of citizens isn’t increasing, there isn’t going to be a good pool of purchasers for your houses.

Median Population Age

The median population age is a simple sign of the accessibility of potential homebuyers. When the median age is equal to the one of the usual worker, it is a good sign. A high number of such people indicates a significant source of home purchasers. Individuals who are preparing to depart the workforce or have already retired have very specific housing needs.

Unemployment Rate

While checking a region for real estate investment, keep your eyes open for low unemployment rates. An unemployment rate that is lower than the US median is preferred. When it’s also lower than the state average, that is much more desirable. If they want to acquire your improved houses, your potential clients have to have a job, and their clients as well.

Income Rates

Median household and per capita income are a reliable gauge of the robustness of the home-purchasing environment in the region. When home buyers purchase a property, they typically have to obtain financing for the purchase. Homebuyers’ ability to be approved for a mortgage rests on the level of their salaries. You can see from the city’s median income if many people in the location can manage to purchase your properties. You also need to have salaries that are going up consistently. When you want to increase the purchase price of your residential properties, you need to be positive that your home purchasers’ wages are also increasing.

Number of New Jobs Created

The number of jobs created per annum is vital information as you consider investing in a particular location. An increasing job market means that a larger number of prospective home buyers are amenable to purchasing a house there. New jobs also attract workers relocating to the location from other places, which also revitalizes the real estate market.

Hard Money Loan Rates

Real estate investors who work with renovated properties regularly employ hard money financing rather than conventional loans. Doing this lets them negotiate lucrative deals without hindrance. Look up the best Exeter hard money lenders and analyze financiers’ charges.

Those who are not experienced in regard to hard money lending can uncover what they ought to learn with our detailed explanation for those who are only starting — What Is a Private Money Lender?.

As a real estate wholesaler, you sign a contract to purchase a home that some other real estate investors will want. When an investor who approves of the property is found, the sale and purchase agreement is assigned to the buyer for a fee. The real estate investor then completes the acquisition. You are selling the rights to the purchase contract, not the property itself.

This business involves employing a title firm that is experienced in the wholesale contract assignment procedure and is qualified and inclined to handle double close purchases. Locate title companies that work with investors in Exeter NH on our list.

To know how wholesaling works, study our insightful article What Is Wholesaling in Real Estate Investing?. When using this investment strategy, include your firm in our list of the best house wholesalers in Exeter NH. That will enable any likely clients to locate you and reach out.

Factors to Consider

Median Home Prices

Median home prices in the area under consideration will roughly tell you if your real estate investors’ required investment opportunities are located there. Lower median prices are a valid indicator that there are enough houses that could be purchased for lower than market price, which investors need to have.

Accelerated deterioration in real estate market values could lead to a lot of homes with no equity that appeal to short sale property buyers. This investment plan often delivers several particular perks. However, there might be challenges as well. Learn more regarding wholesaling short sale properties with our comprehensive explanation. Once you have resolved to attempt wholesaling short sales, make certain to hire someone on the directory of the best short sale real estate attorneys in Exeter NH and the best foreclosure lawyers in Exeter NH to assist you.

Property Appreciation Rate

Median home market value fluctuations clearly illustrate the housing value picture. Investors who intend to maintain investment assets will want to know that residential property purchase prices are constantly appreciating. Declining market values indicate an equally poor leasing and home-selling market and will chase away investors.

Population Growth

Population growth statistics are a contributing factor that your prospective real estate investors will be aware of. When they see that the population is growing, they will conclude that additional housing is needed. They are aware that this will include both leasing and purchased housing. When a population is not growing, it doesn’t need more residential units and investors will look in other locations.

Median Population Age

Real estate investors want to participate in a dynamic real estate market where there is a substantial pool of tenants, newbie homebuyers, and upwardly mobile citizens buying larger houses. This requires a strong, constant labor pool of individuals who are optimistic to move up in the real estate market. That is why the market’s median age should be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income show stable growth over time in cities that are good for real estate investment. Surges in lease and listing prices have to be aided by rising wages in the area. That will be important to the real estate investors you want to draw.

Unemployment Rate

Investors whom you reach out to to buy your sale contracts will regard unemployment statistics to be a significant piece of knowledge. High unemployment rate prompts more renters to pay rent late or default completely. Long-term investors will not take a house in a market like this. High unemployment causes unease that will prevent people from buying a property. This makes it hard to reach fix and flip investors to buy your purchase agreements.

Number of New Jobs Created

Understanding how often new employment opportunities are generated in the city can help you determine if the property is located in a dynamic housing market. Fresh jobs created attract more workers who look for places to lease and purchase. Long-term real estate investors, like landlords, and short-term investors like flippers, are drawn to regions with good job appearance rates.

Average Renovation Costs

An imperative factor for your client real estate investors, specifically house flippers, are renovation expenses in the area. Short-term investors, like fix and flippers, don’t reach profitability when the acquisition cost and the repair costs total to a higher amount than the After Repair Value (ARV) of the home. The less expensive it is to renovate a property, the friendlier the area is for your potential contract clients.

Purchasing mortgage notes (loans) pays off when the note can be obtained for less than the face value. The debtor makes remaining loan payments to the mortgage note investor who has become their current lender.

Loans that are being repaid on time are called performing loans. They give you long-term passive income. Some mortgage investors prefer non-performing loans because when the mortgage note investor cannot successfully re-negotiate the loan, they can always acquire the collateral at foreclosure for a low price.

Ultimately, you may grow a selection of mortgage note investments and not have the time to oversee the portfolio by yourself. At that point, you may need to utilize our catalogue of Exeter top loan servicing companies] and reclassify your notes as passive investments.

If you find that this plan is ideal for you, place your name in our list of Exeter top real estate note buyers. Joining will make you more visible to lenders offering profitable possibilities to note buyers like you.

Factors to Consider

Foreclosure Rates

Investors searching for valuable loans to buy will prefer to find low foreclosure rates in the region. If the foreclosures are frequent, the neighborhood could nevertheless be good for non-performing note investors. If high foreclosure rates have caused a slow real estate environment, it could be tough to get rid of the collateral property if you seize it through foreclosure.

Foreclosure Laws

It is important for note investors to understand the foreclosure laws in their state. Are you working with a Deed of Trust or a mortgage? A mortgage dictates that the lender goes to court for approval to start foreclosure. You only need to file a public notice and initiate foreclosure process if you’re working with a Deed of Trust.

Mortgage Interest Rates

The interest rate is determined in the mortgage notes that are acquired by note investors. Your investment return will be affected by the mortgage interest rate. Interest rates are crucial to both performing and non-performing mortgage note investors.

Conventional lenders price dissimilar interest rates in different parts of the country. Loans supplied by private lenders are priced differently and may be higher than traditional mortgage loans.

A mortgage loan note buyer needs to be aware of the private as well as traditional mortgage loan rates in their markets at any given time.

Demographics

If note buyers are choosing where to invest, they review the demographic dynamics from considered markets. The neighborhood’s population growth, unemployment rate, job market growth, wage standards, and even its median age hold usable information for you.
Performing note investors need borrowers who will pay without delay, creating a repeating revenue source of loan payments.

Note buyers who buy non-performing mortgage notes can also take advantage of dynamic markets. If non-performing mortgage note investors need to foreclose, they will need a stable real estate market in order to unload the repossessed property.

Property Values

The more equity that a homebuyer has in their property, the better it is for you as the mortgage loan holder. If the investor has to foreclose on a mortgage loan with little equity, the foreclosure auction might not even repay the balance invested in the note. Rising property values help raise the equity in the collateral as the homeowner reduces the balance.

Property Taxes

Payments for property taxes are most often sent to the lender along with the loan payment. By the time the property taxes are due, there needs to be enough payments in escrow to pay them. If loan payments are not being made, the lender will have to either pay the property taxes themselves, or the property taxes become past due. If property taxes are delinquent, the municipality’s lien leapfrogs any other liens to the head of the line and is satisfied first.

Because tax escrows are included with the mortgage loan payment, growing taxes mean larger house payments. Homeowners who are having a hard time handling their loan payments could drop farther behind and ultimately default.

Real Estate Market Strength

A vibrant real estate market showing consistent value appreciation is good for all types of note investors. They can be assured that, if necessary, a repossessed collateral can be unloaded for an amount that is profitable.

Vibrant markets often open opportunities for private investors to originate the first mortgage loan themselves. For veteran investors, this is a beneficial portion of their investment strategy.

A REIT, or Real Estate Investment Trust, is a business that makes investments in income-producing real estate. REITs are created to enable ordinary investors to buy into real estate. Shares in REITs are not too costly for most people.

REIT investing is termed passive investing. The risk that the investors are accepting is diversified among a selection of investment assets. Shares in a REIT may be liquidated when it is convenient for the investor. Participants in a REIT aren’t able to advise or choose properties for investment. The properties that the REIT picks to acquire are the ones your capital is used to purchase.

Real estate investment funds are in essence mutual funds concentrating on real estate firms, such as REITs. The investment real estate properties are not possessed by the fund — they are possessed by the businesses in which the fund invests. This is another method for passive investors to diversify their investments with real estate without the high initial cost or risks. Investment funds are not obligated to pay dividends unlike a REIT. The value of a fund to an investor is the anticipated growth of the value of its shares.

You are able to select a fund that focuses on specific segments of the real estate industry but not specific locations for individual real estate investment. Your selection as an investor is to choose a fund that you rely on to oversee your real estate investments.