Ultimate Ford County Real Estate Investing Guide for 2024

The abbreviation BRRRR is a description of a long-term lease strategy — Buy, Rehab, Rent, Refinance, Repeat. If you want to expand your investments, the BRRRR is a good plan to use. It is required that you be able to obtain a “cash-out” refinance loan for the method to be successful.

When you are done with improving the asset, its value has to be more than your total acquisition and fix-up expenses. After that, you take the value you generated out of the asset in a “cash-out” refinance. You buy your next rental with the cash-out sum and begin all over again. You acquire more and more properties and continually grow your lease revenues.

When your investment property portfolio is substantial enough, you might delegate its management and generate passive cash flow. Locate one of the best investment property management companies in Ford County KS with the help of our comprehensive list.

Factors to Consider

Population Growth

The rise or decline of the population can signal if that area is interesting to rental investors. When you discover robust population expansion, you can be confident that the area is pulling likely tenants to the location. Moving companies are drawn to growing locations offering reliable jobs to families who move there. This means dependable tenants, more lease revenue, and a greater number of possible homebuyers when you want to sell your property.

Property Taxes

Real estate taxes, upkeep, and insurance expenses are investigated by long-term rental investors for computing expenses to assess if and how the investment will be viable. High real estate tax rates will decrease a property investor’s income. If property taxes are excessive in a specific location, you will want to look in a different location.

Price to Rent Ratio

The price to rent ratio (p/r) is a contrast of median property values and median lease rates that will indicate how high of a rent the market can tolerate. The rate you can charge in a region will impact the amount you are able to pay based on the number of years it will take to repay those costs. A high p/r shows you that you can demand less rent in that area, a low ratio shows that you can collect more.

Median Gross Rents

Median gross rents are an accurate yardstick of the acceptance of a rental market under discussion. Median rents must be expanding to validate your investment. If rents are going down, you can scratch that city from discussion.

Median Population Age

Median population age in a good long-term investment environment must show the typical worker’s age. You will find this to be accurate in locations where people are relocating. A high median age signals that the existing population is retiring with no replacement by younger people relocating in. This is not advantageous for the forthcoming financial market of that region.

Employment Base Diversity

A varied employment base is something a smart long-term rental property investor will hunt for. If the region’s working individuals, who are your tenants, are hired by a diverse number of companies, you cannot lose all of them at the same time (as well as your property’s market worth), if a major enterprise in town goes bankrupt.

Unemployment Rate

You will not be able to have a secure rental income stream in a city with high unemployment. The unemployed won’t be able to buy goods or services. The still employed workers could find their own wages marked down. Current renters might delay their rent in these circumstances.

Income Rates

Median household and per capita income stats show you if a sufficient number of desirable tenants live in that area. Your investment budget will use rental fees and investment real estate appreciation, which will depend on salary growth in the region.

Number of New Jobs Created

The active economy that you are on the lookout for will be creating a high number of jobs on a regular basis. An economy that adds jobs also adds more players in the property market. Your strategy of leasing and acquiring additional assets requires an economy that can provide more jobs.

School Ratings

Local schools can have a huge impact on the housing market in their locality. Business owners that are interested in relocating want superior schools for their employees. Business relocation attracts more tenants. New arrivals who need a residence keep housing values high. For long-term investing, search for highly rated schools in a potential investment location.

Property Appreciation Rates

The basis of a long-term investment plan is to keep the investment property. You need to have confidence that your assets will appreciate in market price until you decide to sell them. You do not need to take any time examining markets with poor property appreciation rates.

A furnished residential unit where tenants stay for shorter than 30 days is referred to as a short-term rental. The per-night rental prices are usually higher in short-term rentals than in long-term rental properties. With tenants not staying long, short-term rentals have to be maintained and cleaned on a consistent basis.

Usual short-term tenants are holidaymakers, home sellers who are waiting to close on their replacement home, and corporate travelers who need a more homey place than hotel accommodation. House sharing portals like AirBnB and VRBO have helped many real estate owners to engage in the short-term rental business. A simple method to get into real estate investing is to rent real estate you already keep for short terms.

The short-term rental business includes dealing with renters more regularly compared to yearly rental units. That dictates that property owners face disagreements more regularly. You may want to defend your legal liability by hiring one of the best Ford County investor friendly real estate attorneys.

Factors to Consider

Short-Term Rental Income

You should imagine the amount of rental income you’re looking for according to your investment plan. A city’s short-term rental income rates will promptly tell you if you can look forward to achieve your projected rental income levels.

Median Property Prices

When purchasing property for short-term rentals, you need to determine the amount you can pay. To check if a city has potential for investment, check the median property prices. You can adjust your real estate hunt by examining median values in the city’s sub-markets.

Price Per Square Foot

Price per sq ft could be confusing when you are examining different properties. When the designs of prospective homes are very contrasting, the price per square foot might not provide a correct comparison. If you take note of this, the price per sq ft may give you a broad estimation of real estate prices.

Short-Term Rental Occupancy Rate

The need for new rentals in a market can be determined by studying the short-term rental occupancy rate. A high occupancy rate shows that an additional amount of short-term rentals is necessary. If the rental occupancy rates are low, there isn’t enough need in the market and you need to search somewhere else.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will show you if the purchase is a good use of your own funds. You can compute the cash-on-cash return by determining your Net Operating Income (NOI) and dividing it by your cash being invested. The answer comes as a percentage. High cash-on-cash return shows that you will regain your investment quicker and the investment will have a higher return. Financed projects will have a higher cash-on-cash return because you will be using less of your cash.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) levels are generally used by real estate investors to assess the market value of rentals. High cap rates show that rental units are accessible in that market for reasonable prices. If cap rates are low, you can assume to spend a higher amount for investment properties in that location. You can get the cap rate for possible investment real estate by dividing the Net Operating Income (NOI) by the market worth or purchase price of the residential property. This presents you a percentage that is the yearly return, or cap rate.

Local Attractions

Short-term rental apartments are desirable in areas where vacationers are drawn by activities and entertainment spots. If a community has sites that periodically hold sought-after events, like sports arenas, universities or colleges, entertainment venues, and amusement parks, it can invite people from out of town on a recurring basis. Natural tourist sites such as mountainous areas, lakes, beaches, and state and national parks will also draw prospective tenants.

To fix and flip a home, you have to pay below market value, handle any needed repairs and enhancements, then dispose of the asset for after-repair market value. Your assessment of fix-up spendings should be precise, and you need to be able to purchase the property for lower than market worth.

It is critical for you to understand what properties are selling for in the region. You always have to research the amount of time it takes for listings to sell, which is shown by the Days on Market (DOM) metric. Selling the home without delay will keep your expenses low and maximize your profitability.

Assist compelled real property owners in locating your company by featuring it in our catalogue of Ford County real estate cash buyers and the best Ford County real estate investment firms.

Additionally, hunt for bird dogs for real estate investors in Ford County KS. These experts concentrate on quickly locating good investment ventures before they come on the open market.

Factors to Consider

Median Home Price

Median real estate value data is a valuable benchmark for assessing a prospective investment market. When values are high, there may not be a good reserve of fixer-upper properties in the market. This is a basic ingredient of a fix and flip market.

If you detect a rapid decrease in home values, this could mean that there are conceivably properties in the market that will work for a short sale. Real estate investors who team with short sale processors in Ford County KS get regular notifications about potential investment real estate. Learn more regarding this type of investment by reading our guide How to Buy Short Sale Property.

Property Appreciation Rate

The movements in property market worth in an area are crucial. You’re looking for a reliable growth of local real estate market rates. Property market values in the market should be growing steadily, not suddenly. You could end up purchasing high and selling low in an hectic market.

Average Renovation Costs

A comprehensive analysis of the area’s building expenses will make a huge impact on your area choice. The time it takes for acquiring permits and the local government’s regulations for a permit application will also influence your decision. If you need to have a stamped suite of plans, you will need to include architect’s charges in your costs.

Population Growth

Population increase statistics let you take a peek at housing need in the community. Flat or negative population growth is a sign of a sluggish market with not enough buyers to validate your investment.

Median Population Age

The median citizens’ age will additionally show you if there are qualified homebuyers in the location. It shouldn’t be lower or more than that of the average worker. A high number of such people indicates a stable pool of homebuyers. Aging individuals are preparing to downsize, or relocate into senior-citizen or retiree communities.

Unemployment Rate

When evaluating an area for investment, look for low unemployment rates. It must always be less than the national average. A very good investment community will have an unemployment rate lower than the state’s average. Without a vibrant employment environment, a market cannot provide you with abundant homebuyers.

Income Rates

Median household and per capita income are a reliable sign of the robustness of the housing environment in the community. When families buy a home, they usually need to take a mortgage for the purchase. To get a mortgage loan, a home buyer can’t be using for a house payment greater than a certain percentage of their income. Median income can help you determine if the regular home purchaser can buy the houses you plan to market. Specifically, income growth is important if you want to expand your business. If you need to increase the price of your houses, you have to be positive that your customers’ salaries are also improving.

Number of New Jobs Created

The number of jobs created on a consistent basis shows if wage and population increase are sustainable. A larger number of residents purchase homes if their area’s financial market is creating jobs. With a higher number of jobs appearing, more prospective homebuyers also relocate to the area from other cities.

Hard Money Loan Rates

Those who acquire, fix, and liquidate investment properties like to engage hard money and not typical real estate funding. Hard money funds enable these buyers to take advantage of existing investment ventures right away. Discover the best hard money lenders in Ford County KS so you can review their charges.

In case you are unfamiliar with this funding type, understand more by reading our guide — What Is Hard Money?.

Wholesaling is a real estate investment approach that requires locating homes that are appealing to investors and signing a sale and purchase agreement. A real estate investor then “buys” the sale and purchase agreement from you. The real estate investor then finalizes the transaction. The wholesaler does not sell the residential property itself — they simply sell the rights to buy it.

This strategy involves utilizing a title company that’s experienced in the wholesale purchase and sale agreement assignment operation and is capable and willing to coordinate double close transactions. Search for title companies that work with wholesalers in Ford County KS in HouseCashin’s list.

Our definitive guide to wholesaling can be found here: A-to-Z Guide to Property Wholesaling. When following this investment tactic, add your company in our list of the best real estate wholesalers in Ford County KS. That will allow any potential customers to locate you and initiate a contact.

Factors to Consider

Median Home Prices

Median home prices in the market under review will roughly tell you if your investors’ required real estate are located there. Since real estate investors want properties that are available for lower than market value, you will want to take note of lower median prices as an implied tip on the potential supply of homes that you could buy for less than market worth.

A rapid depreciation in the price of property could generate the abrupt availability of properties with negative equity that are wanted by wholesalers. Short sale wholesalers frequently receive perks using this method. Nevertheless, be cognizant of the legal risks. Find out about this from our in-depth blog post Can You Wholesale a Short Sale?. Once you are keen to start wholesaling, hunt through Ford County top short sale lawyers as well as Ford County top-rated foreclosure attorneys directories to locate the best counselor.

Property Appreciation Rate

Property appreciation rate enhances the median price statistics. Real estate investors who intend to hold real estate investment properties will have to discover that housing market values are consistently appreciating. Dropping values indicate an unequivocally poor rental and housing market and will scare away investors.

Population Growth

Population growth information is a predictor that real estate investors will consider thoroughly. When they realize the community is multiplying, they will decide that new housing units are required. There are more individuals who lease and more than enough customers who purchase homes. When a city is losing people, it doesn’t require additional residential units and real estate investors will not invest there.

Median Population Age

Real estate investors need to be a part of a dynamic housing market where there is a good pool of renters, first-time homebuyers, and upwardly mobile residents buying larger properties. This needs a vibrant, reliable workforce of residents who are confident to step up in the residential market. When the median population age matches the age of wage-earning residents, it shows a reliable housing market.

Income Rates

The median household and per capita income demonstrate stable increases continuously in communities that are favorable for investment. Income increment demonstrates a market that can keep up with lease rate and housing price surge. Successful investors stay out of places with weak population wage growth indicators.

Unemployment Rate

Real estate investors whom you reach out to to purchase your sale contracts will consider unemployment stats to be a crucial piece of insight. High unemployment rate prompts a lot of tenants to pay rent late or miss payments entirely. Long-term real estate investors who rely on reliable lease income will lose revenue in these cities. Tenants can’t move up to homeownership and current owners cannot put up for sale their property and shift up to a bigger house. Short-term investors will not risk getting pinned down with a home they can’t sell easily.

Number of New Jobs Created

Learning how soon new job openings are created in the community can help you determine if the home is positioned in a good housing market. More jobs created result in a high number of employees who look for spaces to rent and purchase. Whether your client pool consists of long-term or short-term investors, they will be drawn to a market with consistent job opening production.

Average Renovation Costs

Rehab expenses will be essential to many investors, as they normally buy low-cost neglected houses to update. When a short-term investor renovates a house, they need to be able to liquidate it for a higher price than the combined cost of the acquisition and the improvements. Below average renovation costs make a location more desirable for your main buyers — rehabbers and landlords.

Mortgage note investing means purchasing a loan (mortgage note) from a mortgage holder for less than the balance owed. When this occurs, the investor takes the place of the borrower’s lender.

When a mortgage loan is being repaid on time, it is thought of as a performing note. These notes are a stable provider of passive income. Non-performing notes can be restructured or you can pick up the collateral for less than face value through a foreclosure process.

At some time, you could create a mortgage note portfolio and start needing time to manage it on your own. At that point, you might need to employ our catalogue of Ford County top mortgage servicers and redesignate your notes as passive investments.

When you want to follow this investment method, you ought to include your project in our directory of the best mortgage note buying companies in Ford County KS. This will make you more noticeable to lenders providing desirable opportunities to note investors like you.

Factors to consider

Foreclosure Rates

Performing loan purchasers seek communities having low foreclosure rates. Non-performing loan investors can carefully take advantage of places with high foreclosure rates too. However, foreclosure rates that are high can signal a weak real estate market where liquidating a foreclosed home might be difficult.

Foreclosure Laws

Mortgage note investors are expected to know their state’s regulations regarding foreclosure before buying notes. Many states require mortgage documents and some use Deeds of Trust. Lenders may need to receive the court’s okay to foreclose on a mortgage note’s collateral. You only have to file a public notice and proceed with foreclosure process if you’re working with a Deed of Trust.

Mortgage Interest Rates

Note investors take over the interest rate of the mortgage loan notes that they obtain. This is a significant component in the investment returns that you achieve. Interest rates are crucial to both performing and non-performing mortgage note investors.

Traditional lenders charge different mortgage loan interest rates in different regions of the US. Private loan rates can be slightly higher than conventional interest rates because of the greater risk taken on by private lenders.

Note investors ought to consistently be aware of the present market mortgage interest rates, private and conventional, in possible mortgage note investment markets.

Demographics

If mortgage note buyers are deciding on where to purchase mortgage notes, they will research the demographic dynamics from considered markets. Investors can learn a lot by studying the extent of the population, how many people have jobs, how much they earn, and how old the people are.
A youthful expanding market with a diverse employment base can generate a stable income flow for long-term investors searching for performing notes.

Non-performing mortgage note buyers are looking at similar components for various reasons. A resilient local economy is prescribed if they are to locate homebuyers for collateral properties they’ve foreclosed on.

Property Values

As a mortgage note buyer, you will look for borrowers with a cushion of equity. When the value is not significantly higher than the mortgage loan amount, and the lender wants to foreclose, the home might not sell for enough to payoff the loan. Rising property values help raise the equity in the collateral as the homeowner pays down the amount owed.

Property Taxes

Most homeowners pay property taxes through mortgage lenders in monthly portions when they make their loan payments. The mortgage lender passes on the property taxes to the Government to make certain the taxes are paid without delay. The mortgage lender will have to compensate if the payments cease or the investor risks tax liens on the property. If taxes are past due, the government’s lien supersedes all other liens to the head of the line and is satisfied first.

If a municipality has a history of rising property tax rates, the total home payments in that area are steadily increasing. This makes it difficult for financially strapped borrowers to meet their obligations, and the loan might become past due.

Real Estate Market Strength

Both performing and non-performing mortgage note investors can thrive in a strong real estate environment. Because foreclosure is an essential element of note investment planning, growing real estate values are key to finding a profitable investment market.

Strong markets often create opportunities for note buyers to generate the initial mortgage loan themselves. For successful investors, this is a profitable part of their investment plan.

A REIT, or Real Estate Investment Trust, is a company that makes investments in income-generating assets. This was originally conceived as a method to allow the typical investor to invest in real property. Most investors currently are capable of investing in a REIT.

Shareholders in REITs are completely passive investors. The exposure that the investors are taking is spread among a selection of investment properties. Shares can be sold whenever it’s beneficial for you. Something you cannot do with REIT shares is to choose the investment assets. Their investment is limited to the properties chosen by their REIT.

Real estate investment funds are essentially mutual funds that focus on real estate companies, such as REITs. Any actual property is owned by the real estate firms rather than the fund. Investment funds are an affordable method to incorporate real estate properties in your appropriation of assets without unnecessary exposure. Real estate investment funds aren’t obligated to distribute dividends unlike a REIT. The value of a fund to an investor is the anticipated growth of the worth of its shares.

You are able to pick a fund that concentrates on specific categories of the real estate industry but not specific areas for individual real estate investment. Your selection as an investor is to pick a fund that you believe in to manage your real estate investments.