Ultimate Fayette County Real Estate Investing Guide for 2024

BRRRR means “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a system for consistent growth. An important component of this program is to be able to take a “cash-out” refinance.

When you have finished improving the property, its value has to be higher than your complete acquisition and fix-up costs. The property is refinanced based on the ARV and the difference, or equity, is given to you in cash. You employ that money to get another asset and the operation starts again. This strategy enables you to repeatedly expand your portfolio and your investment revenue.

Once you’ve built a large collection of income generating real estate, you might choose to find someone else to manage your operations while you get mailbox income. Locate top Fayette County property management companies by looking through our directory.

Factors to Consider

Population Growth

The expansion or fall of a region’s population is an accurate barometer of the market’s long-term desirability for rental property investors. An expanding population usually demonstrates ongoing relocation which means new tenants. The city is desirable to companies and employees to move, find a job, and raise families. This equals dependable tenants, higher lease revenue, and more likely homebuyers when you need to unload your asset.

Property Taxes

Property taxes, ongoing upkeep expenses, and insurance specifically influence your revenue. High property tax rates will hurt a real estate investor’s profits. High real estate tax rates may show a fluctuating location where expenditures can continue to rise and must be thought of as a red flag.

Price to Rent Ratio

Price to rent ratio (p/r) is a market indicator that shows you the amount you can expect to collect for rent. If median property values are strong and median rents are weak — a high p/r, it will take longer for an investment to repay your costs and attain good returns. A high price-to-rent ratio informs you that you can collect modest rent in that region, a low p/r shows that you can collect more.

Median Gross Rents

Median gross rents show whether a site’s rental market is dependable. Search for a steady expansion in median rents year over year. You will not be able to achieve your investment targets in a region where median gross rental rates are going down.

Median Population Age

Median population age in a reliable long-term investment environment should equal the normal worker’s age. This could also show that people are moving into the community. A high median age signals that the current population is leaving the workplace with no replacement by younger workers moving there. A vibrant real estate market can’t be sustained by retirees.

Employment Base Diversity

A varied employment base is something an intelligent long-term investor landlord will look for. If the area’s workpeople, who are your tenants, are hired by a varied group of companies, you can’t lose all of your renters at once (as well as your property’s value), if a dominant employer in town goes bankrupt.

Unemployment Rate

It’s difficult to maintain a reliable rental market if there are many unemployed residents in it. Out-of-work residents can’t be customers of yours and of related companies, which produces a ripple effect throughout the market. The remaining people could discover their own incomes reduced. This may result in late rents and renter defaults.

Income Rates

Median household and per capita income levels let you know if an adequate amount of suitable tenants dwell in that location. Increasing incomes also show you that rental fees can be adjusted over your ownership of the asset.

Number of New Jobs Created

A growing job market equates to a regular supply of renters. An economy that creates jobs also adds more participants in the housing market. Your objective of leasing and buying more rentals requires an economy that can generate enough jobs.

School Ratings

School reputation in the district will have a large effect on the local residential market. When a business owner considers a region for potential expansion, they keep in mind that quality education is a necessity for their workforce. Dependable renters are the result of a vibrant job market. Homeowners who come to the area have a beneficial impact on real estate prices. For long-term investing, search for highly ranked schools in a potential investment location.

Property Appreciation Rates

Real estate appreciation rates are an important part of your long-term investment strategy. You have to have confidence that your property assets will increase in market value until you want to sell them. Substandard or dropping property worth in a location under assessment is unacceptable.

Residential properties where renters live in furnished accommodations for less than thirty days are known as short-term rentals. Long-term rental units, like apartments, require lower rental rates a night than short-term rentals. With tenants coming and going, short-term rentals have to be repaired and sanitized on a consistent basis.

Short-term rentals serve corporate travelers who are in town for several nights, those who are relocating and want temporary housing, and vacationers. House sharing sites like AirBnB and VRBO have helped many homeowners to take part in the short-term rental business. This makes short-term rental strategy a good approach to endeavor residential property investing.

The short-term property rental business includes dealing with occupants more regularly in comparison with annual rental units. Because of this, investors handle issues repeatedly. Consider managing your liability with the support of any of the best real estate attorneys in Fayette County WV.

Factors to Consider

Short-Term Rental Income

First, figure out how much rental income you must earn to reach your estimated return. Knowing the standard rate of rental fees in the area for short-term rentals will help you pick a good place to invest.

Median Property Prices

You also need to know the amount you can bear to invest. To see whether a region has potential for investment, look at the median property prices. You can narrow your market search by looking at the median values in specific sub-markets.

Price Per Square Foot

Price per square foot gives a general idea of property prices when looking at similar real estate. If you are looking at the same types of real estate, like condominiums or individual single-family homes, the price per square foot is more reliable. Price per sq ft may be a quick way to analyze multiple communities or properties.

Short-Term Rental Occupancy Rate

A look at the city’s short-term rental occupancy rate will show you whether there is a need in the district for additional short-term rental properties. A community that necessitates new rental units will have a high occupancy level. Weak occupancy rates reflect that there are already too many short-term units in that community.

Short-Term Rental Cash-on-Cash Return

To determine whether it’s a good idea to invest your money in a particular investment asset or location, calculate the cash-on-cash return. Divide the Net Operating Income (NOI) by the total amount of cash invested. The result comes as a percentage. High cash-on-cash return shows that you will recoup your cash quicker and the investment will have a higher return. When you get financing for part of the investment amount and put in less of your own cash, you will receive a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This benchmark compares rental property worth to its per-annum return. An income-generating asset that has a high cap rate and charges market rental prices has a good market value. Low cap rates signify higher-priced investment properties. Divide your expected Net Operating Income (NOI) by the investment property’s market value or listing price. The percentage you receive is the property’s cap rate.

Local Attractions

Short-term renters are usually people who visit an area to attend a recurrent special event or visit tourist destinations. This includes major sporting events, kiddie sports competitions, colleges and universities, huge auditoriums and arenas, festivals, and amusement parks. At specific occasions, areas with outdoor activities in the mountains, at beach locations, or along rivers and lakes will bring in large numbers of visitors who want short-term rental units.

To fix and flip a house, you need to get it for below market value, complete any necessary repairs and upgrades, then sell it for higher market worth. Your assessment of fix-up spendings has to be accurate, and you should be able to purchase the house for less than market price.

Analyze the values so that you are aware of the accurate After Repair Value (ARV). You always need to investigate how long it takes for real estate to close, which is determined by the Days on Market (DOM) metric. Disposing of the property quickly will keep your expenses low and maximize your returns.

Assist compelled real estate owners in finding your firm by listing your services in our catalogue of Fayette County all cash home buyers and Fayette County property investors.

Also, hunt for top bird dogs for real estate investors in Fayette County WV. Specialists in our directory concentrate on securing distressed property investment opportunities while they’re still unlisted.

Factors to Consider

Median Home Price

When you hunt for a suitable market for house flipping, investigate the median housing price in the city. When prices are high, there may not be a good source of run down homes in the area. You must have inexpensive homes for a successful deal.

If regional data shows a rapid drop in property market values, this can point to the accessibility of possible short sale homes. Investors who partner with short sale specialists in Fayette County WV get continual notifications concerning potential investment properties. Learn more concerning this kind of investment by reading our guide How to Buy a Short Sale Property.

Property Appreciation Rate

Dynamics relates to the direction that median home values are treading. You have to have a market where home market values are steadily and continuously on an upward trend. Speedy property value surges could reflect a market value bubble that is not sustainable. Acquiring at an inappropriate time in an unreliable market can be disastrous.

Average Renovation Costs

You’ll want to estimate construction expenses in any potential investment area. Other spendings, like certifications, could inflate expenditure, and time which may also turn into additional disbursement. If you are required to show a stamped set of plans, you will have to incorporate architect’s rates in your expenses.

Population Growth

Population increase is a solid indicator of the reliability or weakness of the location’s housing market. If there are purchasers for your renovated houses, the data will show a strong population growth.

Median Population Age

The median residents’ age can also tell you if there are enough home purchasers in the community. When the median age is equal to that of the usual worker, it’s a good sign. Workers are the individuals who are possible home purchasers. People who are preparing to depart the workforce or are retired have very specific residency requirements.

Unemployment Rate

You want to have a low unemployment level in your potential market. An unemployment rate that is less than the national average is what you are looking for. When the local unemployment rate is lower than the state average, that is a sign of a strong financial market. To be able to buy your renovated homes, your potential buyers need to be employed, and their customers too.

Income Rates

The population’s income levels show you if the region’s economy is strong. Most individuals who buy a home have to have a home mortgage loan. Homebuyers’ capacity to be provided a mortgage relies on the level of their salaries. You can see from the market’s median income whether enough people in the area can afford to buy your houses. You also prefer to see salaries that are growing continually. To keep up with inflation and rising construction and material costs, you should be able to periodically mark up your purchase rates.

Number of New Jobs Created

The number of jobs created on a regular basis indicates if income and population growth are sustainable. A larger number of citizens purchase houses when their city’s financial market is creating jobs. With a higher number of jobs generated, more prospective homebuyers also migrate to the city from other towns.

Hard Money Loan Rates

People who buy, rehab, and flip investment homes opt to engage hard money and not conventional real estate financing. This strategy enables investors make profitable ventures without holdups. Find top-rated hard money lenders in Fayette County WV so you can match their fees.

Someone who needs to understand more about hard money financing products can discover what they are as well as how to use them by studying our article titled What Is Hard Money Lending for Real Estate?.

As a real estate wholesaler, you sign a contract to purchase a property that other real estate investors might want. When a real estate investor who wants the residential property is found, the sale and purchase agreement is assigned to them for a fee. The real estate investor then finalizes the transaction. The wholesaler doesn’t sell the property itself — they just sell the purchase contract.

Wholesaling relies on the involvement of a title insurance firm that is okay with assigning real estate sale agreements and knows how to work with a double closing. Search for wholesale friendly title companies in Fayette County WV that we collected for you.

Discover more about this strategy from our complete guide — Wholesale Real Estate Investing 101 for Beginners. When using this investing tactic, list your company in our directory of the best home wholesalers in Fayette County WV. That way your likely customers will know about your availability and reach out to you.

Factors to Consider

Median Home Prices

Median home values are essential to spotting markets where houses are selling in your investors’ price range. Below average median values are a solid sign that there are enough properties that can be bought for lower than market price, which real estate investors prefer to have.

Accelerated deterioration in real property values might lead to a lot of properties with no equity that appeal to short sale investors. This investment plan often carries multiple different advantages. Nonetheless, there may be challenges as well. Obtain more details on how to wholesale a short sale property in our extensive guide. Once you have decided to try wholesaling short sales, make certain to employ someone on the directory of the best short sale attorneys in Fayette County WV and the best mortgage foreclosure attorneys in Fayette County WV to help you.

Property Appreciation Rate

Median home purchase price fluctuations clearly illustrate the housing value picture. Investors who want to liquidate their properties in the future, such as long-term rental investors, require a region where real estate values are increasing. Dropping values show an equally poor rental and housing market and will chase away real estate investors.

Population Growth

Population growth statistics are a contributing factor that your potential investors will be aware of. When they know the community is growing, they will decide that more housing units are needed. Investors realize that this will combine both rental and purchased housing units. If a community is declining in population, it doesn’t need additional residential units and real estate investors will not look there.

Median Population Age

A strong housing market prefers residents who are initially leasing, then shifting into homeownership, and then buying up in the housing market. A community with a large employment market has a constant source of tenants and purchasers. A community with these attributes will have a median population age that matches the employed person’s age.

Income Rates

The median household and per capita income demonstrate stable growth historically in communities that are ripe for real estate investment. Surges in lease and purchase prices will be sustained by improving wages in the area. That will be vital to the investors you are trying to work with.

Unemployment Rate

Real estate investors whom you contact to purchase your sale contracts will consider unemployment stats to be a crucial piece of knowledge. Tenants in high unemployment areas have a challenging time staying current with rent and some of them will skip payments completely. This impacts long-term investors who intend to lease their real estate. Renters cannot transition up to property ownership and existing homeowners cannot sell their property and go up to a more expensive residence. This makes it hard to locate fix and flip investors to purchase your purchase agreements.

Number of New Jobs Created

The number of jobs generated annually is a critical element of the residential real estate picture. Job formation signifies added workers who need housing. Employment generation is good for both short-term and long-term real estate investors whom you count on to take on your contracts.

Average Renovation Costs

An imperative variable for your client investors, specifically fix and flippers, are rehabilitation expenses in the community. Short-term investors, like fix and flippers, don’t make a profit when the acquisition cost and the improvement expenses amount to a larger sum than the After Repair Value (ARV) of the house. Lower average remodeling spendings make a community more desirable for your priority clients — flippers and landlords.

Buying mortgage notes (loans) works when the note can be acquired for less than the face value. This way, you become the lender to the initial lender’s debtor.

When a loan is being repaid on time, it is considered a performing note. Performing notes bring consistent revenue for investors. Non-performing notes can be rewritten or you may buy the property at a discount through foreclosure.

Eventually, you might grow a number of mortgage note investments and lack the ability to oversee the portfolio without assistance. When this happens, you could choose from the best mortgage loan servicers in Fayette County WV which will make you a passive investor.

If you choose to attempt this investment method, you ought to put your project in our directory of the best real estate note buying companies in Fayette County WV. Being on our list sets you in front of lenders who make lucrative investment possibilities available to note buyers such as yourself.

Factors to consider

Foreclosure Rates

Investors looking for stable-performing loans to purchase will prefer to see low foreclosure rates in the area. Non-performing note investors can carefully take advantage of cities with high foreclosure rates as well. The locale needs to be strong enough so that note investors can foreclose and liquidate collateral properties if necessary.

Foreclosure Laws

It’s imperative for mortgage note investors to learn the foreclosure regulations in their state. Some states use mortgage documents and others require Deeds of Trust. A mortgage requires that the lender goes to court for permission to start foreclosure. You simply need to file a notice and initiate foreclosure process if you are utilizing a Deed of Trust.

Mortgage Interest Rates

The interest rate is set in the mortgage notes that are purchased by note investors. Your mortgage note investment profits will be affected by the mortgage interest rate. Interest rates influence the strategy of both types of mortgage note investors.

Traditional interest rates may differ by up to a quarter of a percent across the US. The higher risk accepted by private lenders is reflected in higher loan interest rates for their mortgage loans in comparison with conventional loans.

A note buyer ought to know the private and conventional mortgage loan rates in their markets at any given time.

Demographics

A region’s demographics data help mortgage note investors to focus their work and appropriately use their assets. It’s critical to know whether a sufficient number of residents in the city will continue to have good employment and wages in the future.
Performing note buyers require homebuyers who will pay as agreed, creating a stable revenue stream of loan payments.

The identical market could also be appropriate for non-performing mortgage note investors and their end-game strategy. In the event that foreclosure is called for, the foreclosed house is more conveniently unloaded in a growing real estate market.

Property Values

As a mortgage note buyer, you must look for borrowers with a cushion of equity. When the property value isn’t much more than the mortgage loan amount, and the mortgage lender needs to foreclose, the home might not realize enough to payoff the loan. The combined effect of loan payments that lower the loan balance and yearly property market worth growth expands home equity.

Property Taxes

Typically, mortgage lenders receive the property taxes from the homeowner every month. When the property taxes are payable, there should be enough money being held to take care of them. If loan payments aren’t current, the mortgage lender will have to choose between paying the taxes themselves, or the taxes become past due. If a tax lien is put in place, it takes precedence over the your loan.

If a region has a history of increasing property tax rates, the combined house payments in that municipality are regularly expanding. This makes it hard for financially weak homeowners to stay current, and the mortgage loan could become past due.

Real Estate Market Strength

Both performing and non-performing mortgage note investors can do business in a good real estate market. It is important to know that if you have to foreclose on a collateral, you won’t have difficulty obtaining an acceptable price for the collateral property.

Note investors additionally have an opportunity to make mortgage loans directly to borrowers in reliable real estate areas. This is a profitable stream of income for experienced investors.

A REIT, or Real Estate Investment Trust, is a business that invests in income-generating real estate. REITs were invented to empower ordinary people to buy into real estate. Most people these days are able to invest in a REIT.

Shareholders in such organizations are totally passive investors. Investment liability is diversified throughout a package of real estate. Shareholders have the option to liquidate their shares at any time. However, REIT investors don’t have the ability to select specific real estate properties or markets. Their investment is confined to the properties owned by the REIT.

A Real Estate Investment Fund is a mutual fund that possesses stocks of real estate businesses. The investment properties are not possessed by the fund — they are possessed by the companies in which the fund invests. This is another method for passive investors to diversify their portfolio with real estate without the high entry-level investment or exposure. Whereas REITs must disburse dividends to its shareholders, funds don’t. As with any stock, investment funds’ values increase and go down with their share market value.

You can find a fund that focuses on a specific kind of real estate company, like residential, but you cannot choose the fund’s investment real estate properties or markets. As passive investors, fund shareholders are glad to let the directors of the fund determine all investment choices.