Ultimate High Point Real Estate Investing Guide for 2024

A long-term rental system that includes Buying an asset, Refurbishing, Renting, Refinancing it, and Repeating the procedure by using the capital from the mortgage refinance is called BRRRR. This is a plan to grow your investment portfolio rather than acquire a single income generating property. It is required that you are qualified to obtain a “cash-out” refinance for the plan to work.

When you have concluded rehabbing the asset, the market value has to be higher than your complete purchase and rehab expenses. After that, you withdraw the equity you generated from the investment property in a “cash-out” mortgage refinance. This capital is put into a different asset, and so on. You add income-producing investment assets to the balance sheet and lease income to your cash flow.

Once you have built a large collection of income producing properties, you may decide to hire others to handle your operations while you enjoy recurring income. Locate one of property management companies in High Point NC with the help of our comprehensive directory.

Factors to Consider

Population Growth

Population rise or shrinking signals you if you can count on good returns from long-term property investments. A booming population normally illustrates vibrant relocation which equals additional tenants. Moving employers are drawn to growing locations giving job security to people who move there. This equals dependable tenants, more rental income, and a greater number of possible homebuyers when you want to unload your asset.

Property Taxes

Real estate taxes, maintenance, and insurance expenses are considered by long-term rental investors for computing costs to estimate if and how the investment will be successful. Investment property situated in excessive property tax cities will bring weaker returns. Communities with excessive property taxes aren’t considered a dependable situation for short- or long-term investment and need to be avoided.

Price to Rent Ratio

The price to rent ratio (p/r) is a clue to how high of a rent can be charged compared to the acquisition price of the property. An investor can not pay a high amount for an investment asset if they can only collect a modest rent not enabling them to pay the investment off in a suitable time. You are trying to see a lower p/r to be assured that you can establish your rental rates high enough for acceptable returns.

Median Gross Rents

Median gross rents are a clear illustration of the strength of a rental market. You should discover a site with stable median rent growth. Declining rents are a warning to long-term investor landlords.

Median Population Age

The median residents’ age that you are on the hunt for in a good investment environment will be approximate to the age of waged people. If people are moving into the district, the median age will not have a problem remaining at the level of the employment base. If you discover a high median age, your source of renters is going down. That is an unacceptable long-term financial picture.

Employment Base Diversity

Having different employers in the locality makes the market less unstable. If the area’s employees, who are your tenants, are employed by a varied assortment of businesses, you will not lose all of them at once (and your property’s value), if a significant enterprise in town goes out of business.

Unemployment Rate

It is impossible to have a stable rental market when there are many unemployed residents in it. Historically strong businesses lose clients when other employers retrench people. This can result in a large number of layoffs or shorter work hours in the community. This could increase the instances of delayed rent payments and lease defaults.

Income Rates

Median household and per capita income will hint if the renters that you require are living in the area. Increasing incomes also show you that rental fees can be increased over the life of the investment property.

Number of New Jobs Created

The more jobs are continuously being produced in a community, the more dependable your tenant source will be. Additional jobs mean additional tenants. This guarantees that you can maintain an acceptable occupancy level and purchase more rentals.

School Ratings

Community schools will make a huge impact on the real estate market in their locality. Companies that are thinking about relocating prefer high quality schools for their workers. Good renters are the result of a strong job market. New arrivals who buy a home keep property market worth high. For long-term investing, hunt for highly graded schools in a potential investment market.

Property Appreciation Rates

High property appreciation rates are a prerequisite for a successful long-term investment. Investing in real estate that you expect to hold without being positive that they will increase in price is a recipe for disaster. Subpar or dropping property worth in a community under review is unacceptable.

A furnished residential unit where tenants live for shorter than 30 days is called a short-term rental. Long-term rentals, such as apartments, impose lower rental rates per night than short-term ones. Because of the high rotation of occupants, short-term rentals necessitate more frequent upkeep and sanitation.

Home sellers standing by to relocate into a new home, holidaymakers, and business travelers who are staying in the city for about week prefer to rent a residential unit short term. Any homeowner can turn their home into a short-term rental with the know-how provided by online home-sharing websites like VRBO and AirBnB. Short-term rentals are regarded as an effective way to get started on investing in real estate.

Short-term rental units demand engaging with occupants more often than long-term rental units. This leads to the landlord being required to frequently manage complaints. You may want to cover your legal exposure by engaging one of the best High Point law firms for real estate.

Factors to Consider

Short-Term Rental Income

You must imagine the level of rental revenue you’re looking for according to your investment strategy. A glance at a community’s present standard short-term rental rates will tell you if that is an ideal market for you.

Median Property Prices

Meticulously assess the amount that you are able to pay for additional investment assets. To see whether a location has opportunities for investment, study the median property prices. You can customize your community survey by studying the median price in specific neighborhoods.

Price Per Square Foot

Price per sq ft may be confusing if you are examining different units. A house with open foyers and vaulted ceilings cannot be compared with a traditional-style property with greater floor space. If you take note of this, the price per square foot can give you a basic estimation of local prices.

Short-Term Rental Occupancy Rate

The percentage of short-term rentals that are currently filled in an area is crucial knowledge for a landlord. A market that necessitates additional rental housing will have a high occupancy rate. When the rental occupancy indicators are low, there isn’t enough need in the market and you must explore in another location.

Short-Term Rental Cash-on-Cash Return

To find out whether you should put your capital in a particular rental unit or area, compute the cash-on-cash return. Take your projected Net Operating Income (NOI) and divide it by your investment cash budget. The resulting percentage is your cash-on-cash return. The higher the percentage, the quicker your invested cash will be repaid and you will begin receiving profits. Loan-assisted ventures will have a stronger cash-on-cash return because you’re investing less of your cash.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) rates are generally utilized by real property investors to evaluate the value of rentals. An investment property that has a high cap rate as well as charges typical market rental rates has a high market value. If properties in a city have low cap rates, they generally will cost too much. You can get the cap rate for possible investment property by dividing the Net Operating Income (NOI) by the market worth or asking price of the investment property. The result is the yearly return in a percentage.

Local Attractions

Big festivals and entertainment attractions will entice tourists who need short-term rental properties. When an area has sites that annually produce sought-after events, such as sports coliseums, universities or colleges, entertainment centers, and theme parks, it can attract people from other areas on a constant basis. At certain occasions, places with outside activities in mountainous areas, seaside locations, or along rivers and lakes will attract lots of tourists who want short-term residence.

The fix and flip approach means buying a house that needs fixing up or restoration, creating additional value by enhancing the building, and then liquidating it for a higher market value. The keys to a profitable fix and flip are to pay a lower price for the house than its current market value and to accurately analyze the cost to make it marketable.

You also want to understand the resale market where the house is situated. The average number of Days On Market (DOM) for homes sold in the region is critical. Selling real estate quickly will keep your expenses low and guarantee your profitability.

Assist motivated real property owners in discovering your firm by listing your services in our catalogue of High Point companies that buy homes for cash and top High Point real estate investing companies.

Also, work with High Point real estate bird dogs. These experts specialize in quickly locating good investment ventures before they come on the market.

Factors to Consider

Median Home Price

Median property price data is an important benchmark for assessing a future investment environment. Modest median home values are a sign that there should be a steady supply of real estate that can be acquired below market value. This is a necessary component of a fix and flip market.

When regional information indicates a sharp decline in real property market values, this can highlight the accessibility of potential short sale properties. Investors who team with short sale negotiators in High Point NC receive continual notifications regarding possible investment properties. Discover how this happens by studying our guide ⁠— How Do I Buy a Short Sale House?.

Property Appreciation Rate

The changes in real estate values in an area are very important. You are eyeing for a stable increase of the city’s home market values. Unpredictable market worth changes are not good, even if it is a remarkable and quick growth. Buying at an inopportune period in an unsteady environment can be devastating.

Average Renovation Costs

You’ll have to estimate building expenses in any potential investment market. Other costs, such as permits, could inflate your budget, and time which may also develop into an added overhead. To make a detailed budget, you will have to know if your construction plans will have to involve an architect or engineer.

Population Growth

Population growth statistics allow you to take a peek at housing need in the city. When the population is not expanding, there isn’t going to be a good supply of purchasers for your properties.

Median Population Age

The median citizens’ age is a contributing factor that you may not have considered. If the median age is equal to that of the average worker, it is a good sign. Individuals in the local workforce are the most dependable home buyers. People who are planning to exit the workforce or have already retired have very particular housing requirements.

Unemployment Rate

You need to see a low unemployment rate in your prospective region. It must certainly be less than the nation’s average. If the community’s unemployment rate is lower than the state average, that is an indicator of a good investing environment. If you don’t have a dynamic employment base, a community cannot supply you with abundant homebuyers.

Income Rates

Median household and per capita income are a reliable indicator of the stability of the real estate conditions in the city. Most people normally obtain financing to purchase real estate. Home purchasers’ capacity to borrow a loan relies on the level of their salaries. Median income will help you determine whether the typical home purchaser can afford the homes you plan to sell. Search for communities where wages are improving. To keep pace with inflation and increasing construction and supply costs, you need to be able to periodically mark up your prices.

Number of New Jobs Created

The number of employment positions created on a consistent basis indicates whether wage and population growth are feasible. Residential units are more conveniently sold in a community that has a dynamic job market. New jobs also attract people coming to the location from other places, which additionally strengthens the local market.

Hard Money Loan Rates

Investors who sell renovated real estate frequently employ hard money financing rather than conventional financing. Doing this lets them make profitable deals without hindrance. Research top High Point hard money lenders for real estate investors and compare lenders’ charges.

Investors who aren’t knowledgeable regarding hard money lenders can find out what they should learn with our detailed explanation for those who are only starting — How Do Hard Money Loans Work?.

As a real estate wholesaler, you sign a sale and purchase agreement to purchase a property that other investors might be interested in. When a real estate investor who approves of the residential property is found, the sale and purchase agreement is sold to the buyer for a fee. The property under contract is sold to the real estate investor, not the wholesaler. The wholesaler does not liquidate the property — they sell the contract to purchase it.

This method involves using a title company that’s knowledgeable about the wholesale contract assignment operation and is able and willing to coordinate double close deals. Locate investor friendly title companies in High Point NC on our website.

Our comprehensive guide to wholesaling can be viewed here: Property Wholesaling Explained. While you conduct your wholesaling venture, put your company in HouseCashin’s directory of High Point top house wholesalers. This will let your potential investor customers find and contact you.

Factors to Consider

Median Home Prices

Median home prices in the community will show you if your preferred price point is achievable in that city. Lower median values are a valid sign that there are plenty of homes that might be purchased for less than market price, which investors prefer to have.

A rapid decrease in housing worth could be followed by a hefty selection of ’upside-down’ residential units that short sale investors hunt for. This investment plan frequently carries numerous unique benefits. But, be aware of the legal liability. Find out more regarding wholesaling short sales with our comprehensive guide. Once you decide to give it a try, make sure you employ one of short sale legal advice experts in High Point NC and foreclosure law firms in High Point NC to consult with.

Property Appreciation Rate

Median home value dynamics are also important. Investors who plan to keep investment properties will want to discover that residential property market values are steadily appreciating. Both long- and short-term investors will avoid a city where residential values are dropping.

Population Growth

Population growth data is something that investors will look at thoroughly. When the community is multiplying, new residential units are needed. This includes both rental and resale properties. If a region is shrinking in population, it does not need new housing and investors will not invest there.

Median Population Age

A profitable housing market for investors is strong in all areas, particularly tenants, who evolve into homebuyers, who move up into bigger homes. To allow this to be possible, there has to be a reliable employment market of potential tenants and homebuyers. A community with these characteristics will have a median population age that mirrors the employed adult’s age.

Income Rates

The median household and per capita income should be on the upswing in a strong residential market that real estate investors want to participate in. Income growth proves a place that can handle lease rate and real estate price raises. That will be critical to the real estate investors you want to work with.

Unemployment Rate

Real estate investors whom you reach out to to take on your sale contracts will consider unemployment figures to be a significant bit of information. Overdue lease payments and default rates are higher in regions with high unemployment. This is detrimental to long-term investors who plan to lease their real estate. Tenants can’t level up to homeownership and current homeowners can’t liquidate their property and shift up to a larger house. Short-term investors won’t risk getting pinned down with a unit they cannot sell fast.

Number of New Jobs Created

The number of additional jobs appearing in the market completes a real estate investor’s assessment of a potential investment spot. Workers move into a region that has new job openings and they look for housing. Long-term real estate investors, like landlords, and short-term investors like rehabbers, are drawn to markets with good job production rates.

Average Renovation Costs

An indispensable factor for your client real estate investors, particularly fix and flippers, are rehab costs in the region. The cost of acquisition, plus the expenses for repairs, must be less than the After Repair Value (ARV) of the property to ensure profitability. The less you can spend to fix up a home, the better the place is for your potential purchase agreement clients.

This strategy involves buying debt (mortgage note) from a mortgage holder for less than the balance owed. When this happens, the note investor becomes the borrower’s lender.

Performing loans are loans where the homeowner is regularly current on their loan payments. Performing loans give you monthly passive income. Investors also obtain non-performing mortgage notes that they either re-negotiate to assist the borrower or foreclose on to buy the property below market worth.

At some time, you might build a mortgage note portfolio and find yourself lacking time to oversee it by yourself. If this occurs, you might choose from the best third party loan servicing companies in High Point NC which will designate you as a passive investor.

When you want to follow this investment strategy, you ought to put your venture in our list of the best mortgage note buyers in High Point NC. Once you’ve done this, you’ll be discovered by the lenders who promote lucrative investment notes for procurement by investors such as yourself.

Factors to Consider

Foreclosure Rates

Note investors hunting for current mortgage loans to buy will want to see low foreclosure rates in the market. If the foreclosures are frequent, the market may nonetheless be good for non-performing note buyers. But foreclosure rates that are high sometimes indicate an anemic real estate market where getting rid of a foreclosed house may be tough.

Foreclosure Laws

Mortgage note investors should know their state’s regulations regarding foreclosure prior to investing in mortgage notes. Many states use mortgage documents and others require Deeds of Trust. While using a mortgage, a court has to allow a foreclosure. You don’t have to have the judge’s agreement with a Deed of Trust.

Mortgage Interest Rates

Purchased mortgage notes come with a negotiated interest rate. Your mortgage note investment return will be influenced by the mortgage interest rate. Mortgage interest rates are critical to both performing and non-performing note buyers.

Conventional interest rates may be different by up to a quarter of a percent across the country. Loans supplied by private lenders are priced differently and can be more expensive than traditional mortgage loans.

Successful note investors routinely search the mortgage interest rates in their community set by private and traditional mortgage companies.

Demographics

If mortgage note investors are choosing where to purchase mortgage notes, they will look closely at the demographic data from reviewed markets. Mortgage note investors can learn a great deal by studying the extent of the populace, how many people have jobs, what they earn, and how old the people are.
Performing note investors want customers who will pay without delay, creating a stable income stream of mortgage payments.

Non-performing mortgage note purchasers are reviewing comparable factors for other reasons. When foreclosure is called for, the foreclosed property is more conveniently liquidated in a good real estate market.

Property Values

The more equity that a homebuyer has in their home, the more advantageous it is for you as the mortgage lender. If the investor has to foreclose on a loan without much equity, the foreclosure auction might not even cover the balance owed. The combination of loan payments that lower the loan balance and annual property value growth increases home equity.

Property Taxes

Usually borrowers pay property taxes via lenders in monthly portions while sending their mortgage loan payments. This way, the mortgage lender makes certain that the property taxes are submitted when payable. If the borrower stops performing, unless the mortgage lender pays the property taxes, they will not be paid on time. If a tax lien is filed, it takes a primary position over the mortgage lender’s loan.

If a market has a record of growing property tax rates, the total home payments in that municipality are consistently increasing. This makes it hard for financially weak borrowers to meet their obligations, and the mortgage loan could become past due.

Real Estate Market Strength

An active real estate market having strong value increase is beneficial for all categories of note buyers. They can be assured that, if required, a foreclosed collateral can be liquidated for an amount that makes a profit.

A strong market could also be a profitable area for making mortgage notes. It’s an added phase of a note buyer’s career.

Some real estate investment businesses are conceived as a trust called Real Estate Investment Trusts or REITs. Before REITs were created, real estate investing was considered too costly for the majority of people. Shares in REITs are not too costly to most investors.

REIT investing is classified as passive investing. REITs handle investors’ liability with a varied group of assets. Investors can unload their REIT shares anytime they need. However, REIT investors do not have the capability to choose specific properties or locations. You are confined to the REIT’s collection of real estate properties for investment.

Mutual funds that contain shares of real estate companies are referred to as real estate investment funds. Any actual real estate property is owned by the real estate businesses, not the fund. This is an additional method for passive investors to spread their investments with real estate avoiding the high entry-level expense or risks. Funds are not obligated to pay dividends like a REIT. The value of a fund to someone is the projected increase of the price of the fund’s shares.

Investors can choose a fund that focuses on particular segments of the real estate industry but not particular locations for each property investment. Your choice as an investor is to pick a fund that you trust to manage your real estate investments.