Ultimate Goodyear Real Estate Investing Guide for 2024

BRRRR is an abbreviation of “Buy, Rehab, Rent, Refinance, Repeat”. When you want to increase your investments, the BRRRR is a proven strategy to follow. An important part of this plan is to be able to obtain a “cash-out” refinance.

When you have finished rehabbing the house, the value must be more than your complete acquisition and fix-up spendings. The house is refinanced based on the ARV and the difference, or equity, is given to you in cash. You utilize that capital to acquire an additional rental and the procedure begins again. You add improving assets to the balance sheet and rental revenue to your cash flow.

If an investor owns a large collection of real properties, it makes sense to hire a property manager and establish a passive income source. Find good Goodyear property management companies by using our directory.

Factors to Consider

Population Growth

The expansion or shrinking of the population can illustrate whether that market is appealing to landlords. If the population growth in a community is strong, then additional renters are assuredly coming into the market. Businesses view this as an attractive place to relocate their business, and for employees to relocate their families. Rising populations grow a strong renter reserve that can afford rent bumps and home purchasers who assist in keeping your asset values high.

Property Taxes

Property taxes, regular upkeep expenses, and insurance directly impact your profitability. Investment property situated in steep property tax cities will have weaker returns. If property tax rates are unreasonable in a particular market, you probably prefer to look in another place.

Price to Rent Ratio

Price to rent ratio (p/r) is a market signal that informs you the amount you can predict to demand as rent. If median home values are steep and median rents are small — a high p/r — it will take longer for an investment to repay your costs and achieve good returns. The less rent you can demand the higher the price-to-rent ratio, with a low p/r showing a more profitable rent market.

Median Gross Rents

Median gross rents are a significant illustration of the vitality of a lease market. Median rents should be growing to justify your investment. You will not be able to reach your investment goals in a city where median gross rental rates are shrinking.

Median Population Age

The median population age that you are on the hunt for in a good investment market will be near the age of employed individuals. This can also illustrate that people are relocating into the area. A high median age signals that the existing population is leaving the workplace without being replaced by younger workers moving in. A thriving real estate market cannot be supported by aged, non-working residents.

Employment Base Diversity

A diversified number of enterprises in the area will improve your prospects for better income. When people are concentrated in a couple of dominant employers, even a minor interruption in their business could cost you a lot of renters and raise your exposure significantly.

Unemployment Rate

High unemployment means smaller amount of renters and an unsteady housing market. Out-of-work citizens are no longer customers of yours and of related companies, which produces a domino effect throughout the community. The still employed people may discover their own incomes reduced. Existing renters could delay their rent in these conditions.

Income Rates

Median household and per capita income information is a helpful indicator to help you find the areas where the tenants you prefer are residing. Your investment planning will include rental charge and asset appreciation, which will be dependent on salary growth in the market.

Number of New Jobs Created

An increasing job market results in a constant supply of renters. An economy that creates jobs also increases the amount of stakeholders in the real estate market. This assures you that you can maintain a high occupancy rate and buy additional properties.

School Ratings

Community schools can make a significant impact on the real estate market in their neighborhood. Well-respected schools are a prerequisite for companies that are considering relocating. Business relocation creates more renters. Homeowners who move to the area have a positive effect on home prices. Reputable schools are an important requirement for a reliable real estate investment market.

Property Appreciation Rates

Strong property appreciation rates are a must for a lucrative long-term investment. You have to make sure that your real estate assets will increase in price until you decide to sell them. You don’t need to take any time reviewing cities with unsatisfactory property appreciation rates.

A short-term rental is a furnished apartment or house where a tenant resides for less than four weeks. Long-term rentals, such as apartments, require lower payment a night than short-term rentals. With tenants coming and going, short-term rentals need to be repaired and cleaned on a consistent basis.

Short-term rentals are used by clients travelling for work who are in the region for several nights, people who are relocating and want transient housing, and sightseers. House sharing platforms like AirBnB and VRBO have encouraged numerous residential property owners to join in the short-term rental industry. Short-term rentals are deemed as an effective technique to jumpstart investing in real estate.

The short-term rental housing strategy involves dealing with renters more frequently in comparison with yearly rental properties. This leads to the owner having to regularly handle grievances. You may want to defend your legal exposure by engaging one of the best Goodyear investor friendly real estate lawyers.

Factors to Consider

Short-Term Rental Income

You must decide how much income has to be earned to make your investment worthwhile. Understanding the average amount of rental fees in the region for short-term rentals will enable you to choose a good city to invest.

Median Property Prices

When purchasing investment housing for short-term rentals, you have to determine the budget you can afford. To see if a location has potential for investment, look at the median property prices. You can customize your location survey by analyzing the median market worth in specific sections of the community.

Price Per Square Foot

Price per square foot gives a basic idea of property values when considering comparable real estate. When the styles of potential properties are very different, the price per square foot might not make a precise comparison. It can be a fast method to analyze several sub-markets or homes.

Short-Term Rental Occupancy Rate

The demand for new rentals in a location may be checked by going over the short-term rental occupancy rate. When most of the rental properties have tenants, that market demands new rentals. Weak occupancy rates denote that there are already too many short-term units in that market.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a method to calculate the value of an investment plan. Divide the Net Operating Income (NOI) by the total amount of cash put in. The answer you get is a percentage. High cash-on-cash return indicates that you will regain your capital more quickly and the purchase will have a higher return. Loan-assisted projects will have a stronger cash-on-cash return because you will be spending less of your cash.

Average Short-Term Rental Capitalization (Cap) Rates

One measurement conveys the value of an investment property as a cash flow asset — average short-term rental capitalization (cap) rate. Basically, the less money an investment asset costs (or is worth), the higher the cap rate will be. Low cap rates reflect more expensive investment properties. Divide your expected Net Operating Income (NOI) by the investment property’s market worth or purchase price. The percentage you receive is the property’s cap rate.

Local Attractions

Short-term tenants are commonly individuals who come to an area to attend a yearly special event or visit tourist destinations. This includes top sporting tournaments, youth sports activities, colleges and universities, large concert halls and arenas, festivals, and amusement parks. Famous vacation spots are located in mountainous and coastal points, alongside lakes, and national or state nature reserves.

The fix and flip approach means acquiring a property that needs fixing up or rehabbing, generating added value by enhancing the building, and then liquidating it for a better market value. Your calculation of repair expenses has to be on target, and you should be able to acquire the home for lower than market price.

You also need to evaluate the housing market where the property is located. Select an area that has a low average Days On Market (DOM) metric. As a ”rehabber”, you’ll need to put up for sale the improved property right away so you can avoid maintenance expenses that will lower your profits.

To help distressed property sellers locate you, enter your firm in our lists of home cash buyers in Goodyear AZ and property investment firms in Goodyear AZ.

Additionally, hunt for real estate bird dogs in Goodyear AZ. Specialists located here will assist you by rapidly discovering possibly lucrative deals prior to the projects being listed.

Factors to Consider

Median Home Price

The location’s median home value should help you spot a good neighborhood for flipping houses. Modest median home values are an indication that there is a good number of residential properties that can be bought below market value. You have to have inexpensive houses for a lucrative fix and flip.

If you detect a quick drop in property values, this could indicate that there are possibly houses in the area that will work for a short sale. You can be notified about these possibilities by working with short sale processing companies in Goodyear AZ. Discover how this happens by reading our article ⁠— How Do You Buy a House in a Short Sale?.

Property Appreciation Rate

Are property prices in the city going up, or on the way down? You are eyeing for a constant growth of the area’s home prices. Property purchase prices in the area need to be going up consistently, not abruptly. You could wind up buying high and selling low in an unstable market.

Average Renovation Costs

You’ll want to look into building expenses in any potential investment area. The time it requires for acquiring permits and the municipality’s requirements for a permit application will also affect your decision. You have to be aware whether you will have to employ other experts, such as architects or engineers, so you can get ready for those expenses.

Population Growth

Population growth is a solid indication of the strength or weakness of the city’s housing market. Flat or negative population growth is a sign of a weak market with not enough buyers to validate your risk.

Median Population Age

The median residents’ age will additionally show you if there are adequate homebuyers in the region. When the median age is the same as the one of the typical worker, it’s a good indication. Employed citizens can be the people who are possible homebuyers. Aging people are getting ready to downsize, or move into age-restricted or retiree communities.

Unemployment Rate

If you find an area showing a low unemployment rate, it’s a strong evidence of profitable investment possibilities. It should certainly be less than the national average. If it’s also less than the state average, that is much more attractive. Without a dynamic employment base, a city won’t be able to provide you with qualified home purchasers.

Income Rates

The citizens’ income levels can tell you if the region’s economy is strong. Most individuals who acquire a home have to have a home mortgage loan. To obtain approval for a mortgage loan, a home buyer shouldn’t be using for housing a larger amount than a particular percentage of their salary. The median income levels show you if the area is beneficial for your investment project. Look for cities where salaries are increasing. Construction spendings and home prices increase over time, and you need to be sure that your potential clients’ wages will also climb up.

Number of New Jobs Created

The number of jobs generated per year is useful data as you reflect on investing in a target market. Residential units are more easily sold in a market that has a dynamic job environment. With a higher number of jobs generated, more potential home purchasers also come to the region from other places.

Hard Money Loan Rates

Investors who purchase, repair, and sell investment real estate like to engage hard money instead of typical real estate funding. Doing this enables investors complete desirable projects without holdups. Find hard money lending companies in Goodyear AZ and compare their mortgage rates.

An investor who needs to learn about hard money loans can discover what they are and how to use them by reviewing our resource for newbies titled What Does Hard Money Mean in Real Estate?.

In real estate wholesaling, you find a home that investors may consider a good deal and enter into a contract to buy it. When an investor who wants the residential property is found, the purchase contract is assigned to the buyer for a fee. The real estate investor then settles the transaction. The real estate wholesaler does not sell the residential property itself — they only sell the purchase agreement.

Wholesaling depends on the participation of a title insurance company that is comfortable with assigning purchase contracts and understands how to deal with a double closing. Discover title companies that work with investors in Goodyear AZ on our list.

Discover more about this strategy from our comprehensive guide — Real Estate Wholesaling 101. As you manage your wholesaling venture, place your company in HouseCashin’s directory of Goodyear top wholesale real estate investors. That will allow any potential clients to find you and reach out.

Factors to Consider

Median Home Prices

Median home values in the area will tell you if your preferred price range is viable in that city. Below average median prices are a valid indicator that there are plenty of homes that can be acquired under market value, which investors prefer to have.

A fast drop in the price of real estate might generate the accelerated availability of homes with owners owing more than market worth that are hunted by wholesalers. This investment plan often provides numerous uncommon benefits. Nonetheless, it also presents a legal risk. Learn more about wholesaling short sale properties with our comprehensive article. When you have determined to try wholesaling these properties, be certain to employ someone on the list of the best short sale legal advice experts in Goodyear AZ and the best foreclosure law offices in Goodyear AZ to advise you.

Property Appreciation Rate

Median home price trends are also important. Investors who plan to keep investment properties will want to see that housing purchase prices are consistently increasing. Both long- and short-term real estate investors will avoid a city where residential purchase prices are depreciating.

Population Growth

Population growth data is an indicator that real estate investors will consider thoroughly. If the community is expanding, more residential units are needed. This includes both rental and ‘for sale’ real estate. If a region is declining in population, it does not necessitate new residential units and investors will not be active there.

Median Population Age

A desirable housing market for real estate investors is active in all areas, notably tenants, who become homeowners, who move up into bigger homes. This requires a vibrant, constant labor pool of people who are confident enough to shift up in the real estate market. A market with these characteristics will have a median population age that is equivalent to the working adult’s age.

Income Rates

The median household and per capita income in a good real estate investment market need to be going up. Surges in lease and listing prices will be sustained by improving income in the area. Investors stay away from cities with poor population salary growth figures.

Unemployment Rate

Investors whom you approach to close your contracts will regard unemployment statistics to be an essential piece of knowledge. High unemployment rate forces more tenants to pay rent late or default entirely. This negatively affects long-term real estate investors who need to rent their property. Tenants cannot move up to ownership and existing homeowners cannot liquidate their property and move up to a bigger home. This is a challenge for short-term investors buying wholesalers’ contracts to rehab and flip a home.

Number of New Jobs Created

The amount of fresh jobs being produced in the area completes an investor’s analysis of a prospective investment site. New citizens relocate into an area that has additional jobs and they need housing. This is helpful for both short-term and long-term real estate investors whom you count on to take on your contracted properties.

Average Renovation Costs

Rehab costs have a big effect on an investor’s profit. When a short-term investor flips a building, they have to be prepared to dispose of it for a higher price than the combined sum they spent for the purchase and the improvements. Lower average remodeling expenses make a market more desirable for your main customers — flippers and landlords.

Mortgage note investing involves purchasing a loan (mortgage note) from a mortgage holder at a discount. When this occurs, the investor becomes the debtor’s lender.

When a loan is being paid as agreed, it’s considered a performing note. Performing notes are a repeating generator of cash flow. Non-performing notes can be rewritten or you could buy the property at a discount via foreclosure.

Ultimately, you might have a lot of mortgage notes and have a hard time finding additional time to service them on your own. In this case, you can hire one of mortgage servicing companies in Goodyear AZ that will essentially turn your investment into passive cash flow.

When you find that this strategy is perfect for you, place your business in our list of Goodyear top real estate note buying companies. Appearing on our list sets you in front of lenders who make lucrative investment possibilities available to note investors such as yourself.

Factors to Consider

Foreclosure Rates

Performing note buyers seek regions that have low foreclosure rates. Non-performing note investors can cautiously make use of places with high foreclosure rates too. But foreclosure rates that are high can signal a weak real estate market where getting rid of a foreclosed home could be tough.

Foreclosure Laws

It is imperative for note investors to learn the foreclosure regulations in their state. They’ll know if the state requires mortgages or Deeds of Trust. Lenders might have to obtain the court’s okay to foreclose on real estate. Investors do not have to have the judge’s approval with a Deed of Trust.

Mortgage Interest Rates

Purchased mortgage loan notes contain a negotiated interest rate. Your mortgage note investment profits will be affected by the mortgage interest rate. Regardless of the type of mortgage note investor you are, the loan note’s interest rate will be important for your predictions.

Traditional interest rates may vary by as much as a quarter of a percent across the US. Private loan rates can be moderately more than traditional rates because of the greater risk taken on by private lenders.

Mortgage note investors ought to consistently be aware of the prevailing market interest rates, private and conventional, in potential mortgage note investment markets.

Demographics

A successful note investment strategy includes a review of the community by utilizing demographic data. The neighborhood’s population growth, unemployment rate, job market growth, income levels, and even its median age hold usable facts for mortgage note investors.
Performing note investors want customers who will pay without delay, developing a repeating revenue stream of mortgage payments.

Non-performing note purchasers are reviewing related elements for various reasons. A resilient local economy is needed if they are to find buyers for collateral properties on which they have foreclosed.

Property Values

The more equity that a borrower has in their home, the better it is for the mortgage loan holder. This increases the possibility that a possible foreclosure liquidation will repay the amount owed. As mortgage loan payments lessen the amount owed, and the market value of the property goes up, the homeowner’s equity goes up too.

Property Taxes

Payments for real estate taxes are usually sent to the lender along with the mortgage loan payment. That way, the mortgage lender makes sure that the taxes are taken care of when due. If the homebuyer stops performing, unless the loan owner pays the property taxes, they will not be paid on time. If a tax lien is put in place, it takes precedence over the lender’s note.

If an area has a history of increasing property tax rates, the total home payments in that city are regularly increasing. Delinquent customers may not be able to maintain growing mortgage loan payments and might interrupt making payments altogether.

Real Estate Market Strength

A vibrant real estate market with good value growth is helpful for all categories of note buyers. It is good to understand that if you need to foreclose on a property, you won’t have difficulty receiving a good price for the property.

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

A REIT, or Real Estate Investment Trust, means a company that invests in income-generating properties. REITs were invented to empower ordinary investors to buy into real estate. Shares in REITs are affordable to the majority of people.

REIT investing is called passive investing. The risk that the investors are taking is diversified within a group of investment real properties. Shares in a REIT may be sold whenever it is agreeable for the investor. One thing you can’t do with REIT shares is to choose the investment properties. The land and buildings that the REIT decides to purchase are the assets your money is used for.

Real estate investment funds are essentially mutual funds that specialize in real estate firms, including REITs. The fund does not hold properties — it owns shares in real estate businesses. Investment funds are a cost-effective way to incorporate real estate properties in your allotment of assets without unnecessary liability. Funds are not obligated to distribute dividends unlike a REIT. The benefit to you is generated by appreciation in the value of the stock.

You may pick a fund that concentrates on a predetermined category of real estate you are knowledgeable about, but you don’t get to pick the location of every real estate investment. Your selection as an investor is to pick a fund that you trust to supervise your real estate investments.