Ultimate Harvey County Real Estate Investing Guide for 2024

The term BRRRR is an illustration of a long-term investment strategy — Buy, Rehab, Rent, Refinance, Repeat. When you desire to grow your investments, the BRRRR is an excellent plan to employ. A critical piece of this formula is to be able to do a “cash-out” mortgage refinance.

When you have concluded rehabbing the asset, its value has to be more than your combined purchase and fix-up expenses. Then you obtain a cash-out mortgage refinance loan that is calculated on the larger market value, and you withdraw the balance. You utilize that cash to get an additional asset and the process begins anew. You add appreciating investment assets to your portfolio and rental income to your cash flow.

Once you have built a large collection of income generating properties, you might decide to find someone else to oversee all operations while you enjoy mailbox income. Discover Harvey County property management professionals when you search through our list of experts.

Factors to Consider

Population Growth

The rise or deterioration of an area’s population is a valuable gauge of the market’s long-term attractiveness for lease property investors. If the population increase in a region is strong, then new tenants are definitely moving into the region. Moving employers are attracted to growing areas giving reliable jobs to families who move there. This means dependable renters, higher rental revenue, and more likely homebuyers when you need to unload your rental.

Property Taxes

Property taxes, similarly to insurance and upkeep spendings, may be different from market to market and must be reviewed cautiously when estimating potential returns. Excessive payments in these areas jeopardize your investment’s returns. High property taxes may indicate an unreliable market where expenditures can continue to increase and must be treated as a red flag.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property prices and median rental rates that will indicate how much rent the market can allow. If median real estate values are strong and median rents are small — a high p/r, it will take more time for an investment to pay for itself and attain good returns. A higher p/r informs you that you can charge less rent in that community, a low ratio signals you that you can collect more.

Median Gross Rents

Median gross rents show whether a location’s lease market is strong. Median rents must be growing to warrant your investment. Declining rents are an alert to long-term rental investors.

Median Population Age

Median population age in a strong long-term investment market must show the normal worker’s age. You’ll learn this to be factual in regions where workers are relocating. If you see a high median age, your source of renters is shrinking. That is a weak long-term financial prospect.

Employment Base Diversity

Accommodating a variety of employers in the location makes the market less unpredictable. When there are only one or two dominant employers, and either of them relocates or disappears, it can cause you to lose paying customers and your real estate market rates to plunge.

Unemployment Rate

High unemployment equals a lower number of tenants and an uncertain housing market. Jobless individuals can’t be clients of yours and of other businesses, which creates a domino effect throughout the city. Workers who continue to have jobs can discover their hours and salaries reduced. Remaining tenants may fall behind on their rent payments in such cases.

Income Rates

Median household and per capita income data is a valuable indicator to help you discover the cities where the tenants you are looking for are residing. Your investment analysis will include rental fees and investment real estate appreciation, which will be based on salary augmentation in the market.

Number of New Jobs Created

An expanding job market equates to a regular stream of tenants. An economy that provides jobs also boosts the number of stakeholders in the property market. This enables you to buy more lease real estate and backfill existing empty units.

School Ratings

Local schools can make a major impact on the real estate market in their city. Employers that are thinking about moving require superior schools for their employees. Reliable tenants are a consequence of a steady job market. Homeowners who relocate to the region have a beneficial influence on real estate market worth. You will not run into a vibrantly expanding housing market without good schools.

Property Appreciation Rates

The essence of a long-term investment method is to keep the asset. You need to be assured that your property assets will rise in value until you want to dispose of them. You don’t want to take any time exploring markets that have unsatisfactory property appreciation rates.

A furnished property where tenants reside for less than 4 weeks is called a short-term rental. The per-night rental rates are usually higher in short-term rentals than in long-term rental properties. Short-term rental properties might demand more continual care and tidying.

Home sellers standing by to relocate into a new residence, holidaymakers, and people traveling for work who are stopping over in the city for a few days like to rent apartments short term. House sharing platforms such as AirBnB and VRBO have enabled countless homeowners to join in the short-term rental business. A convenient approach to enter real estate investing is to rent a condo or house you currently own for short terms.

The short-term rental housing venture includes dealing with occupants more often compared to annual lease units. Because of this, investors manage problems repeatedly. You might want to defend your legal bases by engaging one of the best Harvey County real estate law firms.

Factors to Consider

Short-Term Rental Income

You should decide how much rental income needs to be produced to make your investment worthwhile. A glance at a location’s current average short-term rental prices will show you if that is a strong city for your investment.

Median Property Prices

You also have to know the budget you can spare to invest. Search for locations where the purchase price you have to have correlates with the present median property values. You can also utilize median values in specific sections within the market to pick locations for investing.

Price Per Square Foot

Price per sq ft could be misleading when you are examining different properties. A building with open foyers and vaulted ceilings cannot be compared with a traditional-style property with greater floor space. You can use the price per sq ft data to see a good broad picture of home values.

Short-Term Rental Occupancy Rate

The number of short-term rental properties that are currently rented in a community is crucial information for a future rental property owner. If nearly all of the rental properties are filled, that city needs additional rental space. When the rental occupancy levels are low, there isn’t enough place in the market and you must search somewhere else.

Short-Term Rental Cash-on-Cash Return

To know if you should put your funds in a specific investment asset or location, compute the cash-on-cash return. You can calculate the cash-on-cash return by determining your Net Operating Income (NOI) and dividing it by your cash investment. The result is a percentage. When a project is lucrative enough to pay back the amount invested promptly, you’ll get a high percentage. When you borrow a portion of the investment amount and put in less of your funds, you will get a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This criterion shows the comparability of rental property value to its annual return. An income-generating asset that has a high cap rate as well as charges typical market rental prices has a high market value. If investment real estate properties in a region have low cap rates, they typically will cost too much. Divide your projected Net Operating Income (NOI) by the investment property’s market worth or asking price. The percentage you will get is the investment property’s cap rate.

Local Attractions

Short-term rental apartments are desirable in regions where vacationers are attracted by events and entertainment sites. People visit specific regions to enjoy academic and sporting events at colleges and universities, see professional sports, cheer for their kids as they participate in fun events, have the time of their lives at annual festivals, and stop by amusement parks. Natural tourist sites like mountains, lakes, coastal areas, and state and national nature reserves will also invite prospective tenants.

The fix and flip strategy requires acquiring a property that demands improvements or restoration, putting additional value by enhancing the building, and then liquidating it for its full market worth. Your assessment of rehab expenses should be on target, and you should be able to acquire the property for less than market value.

It’s critical for you to know the rates homes are going for in the community. You always have to investigate the amount of time it takes for listings to sell, which is determined by the Days on Market (DOM) data. Liquidating real estate fast will keep your expenses low and ensure your revenue.

So that home sellers who need to liquidate their house can conveniently discover you, promote your availability by using our directory of companies that buy houses for cash in Harvey County KS along with top real estate investment firms in Harvey County KS.

Additionally, team up with Harvey County bird dogs for real estate investors. Professionals found here will assist you by immediately discovering potentially lucrative deals prior to them being marketed.

Factors to Consider

Median Home Price

When you look for a good area for real estate flipping, look into the median housing price in the city. You’re looking for median prices that are modest enough to reveal investment possibilities in the area. This is a critical ingredient of a successful fix and flip.

If market information signals a fast drop in real estate market values, this can highlight the accessibility of possible short sale houses. You can receive notifications about these opportunities by joining with short sale negotiation companies in Harvey County KS. You’ll learn more information about short sales in our extensive blog post ⁠— How to Buy a Pre-Foreclosure Short Sale Home?.

Property Appreciation Rate

Dynamics relates to the track that median home prices are taking. Predictable growth in median prices articulates a vibrant investment market. Unreliable price changes aren’t beneficial, even if it’s a significant and sudden surge. Acquiring at an inconvenient period in an unsteady environment can be problematic.

Average Renovation Costs

Look carefully at the possible renovation spendings so you will be aware whether you can achieve your goals. The time it will take for getting permits and the local government’s requirements for a permit request will also impact your decision. To create a detailed financial strategy, you will need to know whether your construction plans will be required to involve an architect or engineer.

Population Growth

Population data will show you whether there is an increasing necessity for housing that you can produce. When there are buyers for your renovated homes, the numbers will illustrate a strong population increase.

Median Population Age

The median citizens’ age is a direct sign of the accessibility of preferred home purchasers. The median age in the area needs to equal the one of the regular worker. Individuals in the local workforce are the most dependable house buyers. Individuals who are about to leave the workforce or are retired have very particular residency needs.

Unemployment Rate

When evaluating an area for investment, look for low unemployment rates. It should certainly be lower than the US average. A really strong investment location will have an unemployment rate less than the state’s average. Without a robust employment base, an area can’t supply you with abundant homebuyers.

Income Rates

The residents’ wage figures inform you if the area’s financial market is strong. When families buy a home, they normally have to obtain financing for the purchase. To qualify for a mortgage loan, a person can’t be using for a house payment a larger amount than a certain percentage of their income. You can see based on the location’s median income if a good supply of people in the area can afford to purchase your houses. Search for regions where salaries are improving. To stay even with inflation and soaring construction and material expenses, you should be able to regularly adjust your purchase rates.

Number of New Jobs Created

Knowing how many jobs are generated each year in the community adds to your confidence in a region’s investing environment. Homes are more easily sold in an area with a vibrant job environment. With a higher number of jobs generated, new prospective buyers also relocate to the city from other places.

Hard Money Loan Rates

Fix-and-flip property investors normally use hard money loans rather than typical financing. This strategy lets investors make desirable deals without holdups. Look up the best Harvey County hard money lenders and analyze financiers’ costs.

Those who are not well-versed in regard to hard money lenders can uncover what they should know with our guide for those who are only starting — What Is Private Money?.

As a real estate wholesaler, you enter a contract to purchase a property that other real estate investors might need. When an investor who approves of the property is found, the purchase contract is assigned to them for a fee. The real buyer then completes the purchase. The real estate wholesaler doesn’t liquidate the property — they sell the contract to buy it.

The wholesaling form of investing includes the use of a title firm that understands wholesale purchases and is knowledgeable about and engaged in double close deals. Discover title companies that specialize in real estate property investments in Harvey County KS that we selected for you.

Learn more about this strategy from our extensive guide — Real Estate Wholesaling 101. As you conduct your wholesaling venture, put your firm in HouseCashin’s directory of Harvey County top wholesale property investors. This will help any likely partners to find you and reach out.

Factors to Consider

Median Home Prices

Median home prices in the area will tell you if your preferred price level is possible in that market. Lower median prices are a solid indication that there are enough properties that can be purchased below market worth, which investors need to have.

A fast decline in the value of real estate might generate the swift availability of houses with negative equity that are hunted by wholesalers. Short sale wholesalers often reap benefits from this strategy. Nonetheless, there could be challenges as well. Learn about this from our in-depth blog post Can You Wholesale a Short Sale House?. Once you have resolved to try wholesaling short sale homes, be sure to employ someone on the directory of the best short sale law firms in Harvey County KS and the best foreclosure law firms in Harvey County KS to advise you.

Property Appreciation Rate

Property appreciation rate completes the median price data. Investors who need to resell their investment properties later on, such as long-term rental landlords, need a location where property purchase prices are growing. A weakening median home price will indicate a poor rental and housing market and will disappoint all sorts of real estate investors.

Population Growth

Population growth stats are something that real estate investors will consider carefully. If the population is expanding, new housing is required. There are many people who lease and additional customers who purchase real estate. When a population is not multiplying, it doesn’t need more residential units and real estate investors will search in other areas.

Median Population Age

Investors need to be a part of a thriving housing market where there is a considerable source of renters, newbie homeowners, and upwardly mobile citizens switching to more expensive residences. For this to be possible, there needs to be a stable workforce of prospective renters and homeowners. An area with these attributes will display a median population age that corresponds with the wage-earning citizens’ age.

Income Rates

The median household and per capita income demonstrate stable improvement continuously in areas that are favorable for real estate investment. Increases in lease and asking prices will be supported by improving income in the area. Investors need this in order to meet their anticipated profits.

Unemployment Rate

Real estate investors whom you approach to purchase your sale contracts will deem unemployment levels to be a significant bit of information. High unemployment rate forces more tenants to pay rent late or default completely. This impacts long-term investors who want to lease their investment property. Tenants can’t step up to ownership and current homeowners cannot liquidate their property and go up to a more expensive home. Short-term investors won’t take a chance on being pinned down with a unit they cannot liquidate without delay.

Number of New Jobs Created

The number of jobs produced on a yearly basis is an essential element of the residential real estate framework. Job formation signifies a higher number of workers who require a place to live. Long-term real estate investors, like landlords, and short-term investors such as flippers, are gravitating to places with consistent job appearance rates.

Average Renovation Costs

Renovation spendings have a strong effect on an investor’s profit. Short-term investors, like fix and flippers, can’t earn anything when the acquisition cost and the rehab expenses amount to more money than the After Repair Value (ARV) of the house. Lower average rehab costs make a place more desirable for your priority buyers — flippers and long-term investors.

This strategy means obtaining debt (mortgage note) from a lender for less than the balance owed. By doing this, the purchaser becomes the mortgage lender to the original lender’s debtor.

Loans that are being paid off as agreed are considered performing loans. Performing loans are a steady provider of cash flow. Non-performing mortgage notes can be re-negotiated or you could acquire the collateral at a discount by conducting foreclosure.

At some time, you may grow a mortgage note collection and find yourself lacking time to service it on your own. In this event, you can opt to enlist one of note servicing companies in Harvey County KS that will essentially turn your investment into passive income.

Should you choose to adopt this strategy, affix your venture to our list of mortgage note buyers in Harvey County KS. This will make you more visible to lenders providing profitable opportunities to note investors like yourself.

Factors to consider

Foreclosure Rates

Performing note investors try to find areas showing low foreclosure rates. If the foreclosure rates are high, the neighborhood could still be profitable for non-performing note investors. However, foreclosure rates that are high sometimes indicate an anemic real estate market where selling a foreclosed home could be a no easy task.

Foreclosure Laws

It’s imperative for mortgage note investors to know the foreclosure regulations in their state. They’ll know if their law requires mortgage documents or Deeds of Trust. When using a mortgage, a court will have to allow a foreclosure. You simply have to file a public notice and initiate foreclosure process if you’re utilizing a Deed of Trust.

Mortgage Interest Rates

Purchased mortgage notes come with a negotiated interest rate. Your mortgage note investment return will be affected by the mortgage interest rate. Interest rates influence the plans of both kinds of mortgage note investors.

Conventional interest rates may be different by as much as a quarter of a percent around the country. Private loan rates can be a little more than traditional rates due to the larger risk accepted by private mortgage lenders.

Note investors should consistently be aware of the prevailing local interest rates, private and traditional, in possible mortgage note investment markets.

Demographics

A successful note investment plan includes a research of the community by utilizing demographic data. The region’s population increase, unemployment rate, job market increase, pay standards, and even its median age contain important data for note investors.
Investors who invest in performing notes select places where a lot of younger people maintain higher-income jobs.

Note investors who seek non-performing mortgage notes can also take advantage of growing markets. A vibrant local economy is required if they are to locate buyers for properties on which they have foreclosed.

Property Values

As a mortgage note buyer, you will try to find deals having a comfortable amount of equity. This enhances the chance that a possible foreclosure auction will repay the amount owed. The combined effect of loan payments that reduce the mortgage loan balance and yearly property market worth appreciation increases home equity.

Property Taxes

Typically, mortgage lenders receive the property taxes from the homeowner each month. By the time the taxes are due, there should be enough funds in escrow to take care of them. If loan payments are not current, the mortgage lender will have to either pay the property taxes themselves, or the property taxes become delinquent. When property taxes are delinquent, the municipality’s lien supersedes all other liens to the head of the line and is satisfied first.

If a market has a history of increasing property tax rates, the total home payments in that city are constantly increasing. This makes it tough for financially weak borrowers to make their payments, and the mortgage loan might become delinquent.

Real Estate Market Strength

A vibrant real estate market showing good value growth is helpful for all categories of note buyers. The investors can be confident that, if necessary, a repossessed property can be liquidated at a price that is profitable.

Strong markets often show opportunities for note buyers to make the first mortgage loan themselves. This is a good source of revenue for experienced investors.

A REIT, or Real Estate Investment Trust, means a firm that makes investments in income-producing properties. REITs are developed to empower ordinary people to invest in real estate. REIT shares are not too costly for most people.

REIT investing is known as passive investing. REITs handle investors’ exposure with a diversified group of assets. Investors are able to unload their REIT shares anytime they need. However, REIT investors don’t have the ability to pick particular assets or markets. The properties that the REIT selects to acquire are the assets your funds are used to buy.

Real estate investment funds are in essence mutual funds focusing on real estate firms, such as REITs. Any actual property is possessed by the real estate businesses, not the fund. These funds make it doable for additional people to invest in real estate properties. Fund members might not collect ordinary distributions like REIT shareholders do. As with any stock, investment funds’ values increase and decrease with their share price.

You can select a real estate fund that focuses on a distinct type of real estate company, such as residential, but you can’t suggest the fund’s investment assets or markets. You have to count on the fund’s managers to select which markets and real estate properties are selected for investment.