Ultimate Highland County Real Estate Investing Guide for 2024

BRRRR means “Buy, Rehab, Rent, Refinance, Repeat”. This is a way to grow your investment portfolio not just acquire one investment property. It is essential that you are qualified to obtain a “cash-out” mortgage refinance for the method to be successful.

When you have concluded refurbishing the investment property, its value should be higher than your combined purchase and renovation spendings. The rental is refinanced using the ARV and the balance, or equity, comes to you in cash. You purchase your next property with the cash-out funds and do it anew. You add growing investment assets to the balance sheet and rental income to your cash flow.

If an investor has a substantial number of investment homes, it makes sense to pay a property manager and create a passive income stream. Find Highland County property management professionals when you search through our list of experts.

Factors to Consider

Population Growth

The increase or decrease of the population can illustrate whether that city is appealing to rental investors. An increasing population usually indicates busy relocation which equals additional renters. Relocating employers are drawn to increasing areas offering reliable jobs to people who move there. This equates to reliable renters, higher rental income, and a greater number of possible homebuyers when you need to liquidate the asset.

Property Taxes

Real estate taxes, similarly to insurance and maintenance costs, may differ from market to market and have to be looked at carefully when estimating potential returns. Rental assets situated in excessive property tax cities will have less desirable profits. Excessive property tax rates may predict an unreliable community where expenses can continue to increase and should be thought of as a warning.

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 high of a rent the market can handle. An investor will not pay a high price for an investment asset if they can only collect a modest rent not enabling them to pay the investment off in a reasonable time. The lower rent you can charge the higher the p/r, with a low p/r illustrating a more profitable rent market.

Median Gross Rents

Median gross rents signal whether an area’s lease market is robust. You are trying to find a market with consistent median rent increases. If rents are going down, you can eliminate that area from discussion.

Median Population Age

The median citizens’ age that you are on the hunt for in a dynamic investment market will be close to the age of salaried adults. If people are resettling into the district, the median age will not have a problem remaining at the level of the labor force. A high median age shows that the current population is retiring without being replaced by younger workers moving in. A thriving real estate market can’t be bolstered by retired professionals.

Employment Base Diversity

A varied amount of enterprises in the location will increase your chances of strong returns. When the market’s workpeople, who are your renters, are spread out across a diverse assortment of companies, you can’t lose all of your renters at the same time (as well as your property’s market worth), if a major employer in the community goes bankrupt.

Unemployment Rate

You can’t benefit from a secure rental cash flow in a locality with high unemployment. Unemployed residents are no longer customers of yours and of related businesses, which produces a ripple effect throughout the city. This can cause a high amount of dismissals or reduced work hours in the location. Even tenants who have jobs may find it a burden to keep up with their rent.

Income Rates

Median household and per capita income will demonstrate if the renters that you want are living in the region. Increasing incomes also inform you that rental rates can be increased over your ownership of the rental home.

Number of New Jobs Created

The more jobs are consistently being created in a market, the more reliable your tenant source will be. The people who fill the new jobs will require housing. This enables you to acquire more lease properties and fill existing vacancies.

School Ratings

The reputation of school districts has an important influence on housing prices across the area. Well-accredited schools are a prerequisite for employers that are considering relocating. Business relocation produces more tenants. Homebuyers who relocate to the community have a positive influence on housing values. For long-term investing, hunt for highly graded schools in a potential investment location.

Property Appreciation Rates

The foundation of a long-term investment strategy is to hold the asset. You have to be assured that your assets will rise in market price until you decide to dispose of them. You do not need to spend any time navigating regions with poor property appreciation rates.

Residential units where renters reside in furnished accommodations for less than thirty days are called short-term rentals. The nightly rental prices are always higher in short-term rentals than in long-term units. Because of the increased rotation of renters, short-term rentals require more regular repairs and cleaning.

Usual short-term tenants are holidaymakers, home sellers who are in-between homes, and people traveling on business who need a more homey place than hotel accommodation. Any property owner can turn their home into a short-term rental with the tools offered by virtual home-sharing sites like VRBO and AirBnB. Short-term rentals are regarded as a good approach to kick off investing in real estate.

The short-term rental housing venture requires dealing with tenants more frequently in comparison with annual lease properties. As a result, investors handle problems repeatedly. You may need to defend your legal exposure by working with one of the best Highland County investor friendly real estate lawyers.

Factors to Consider

Short-Term Rental Income

You have to decide how much rental income has to be created to make your investment worthwhile. A region’s short-term rental income levels will quickly reveal to you when you can predict to reach your estimated income figures.

Median Property Prices

Thoroughly assess the amount that you can afford to spare for new real estate. To see whether a market has possibilities for investment, investigate the median property prices. You can also use median market worth in specific sub-markets within the market to select cities for investing.

Price Per Square Foot

Price per sq ft gives a basic idea of property prices when considering comparable real estate. When the styles of available homes are very contrasting, the price per sq ft might not provide an accurate comparison. You can use the price per sq ft metric to obtain a good general view of property values.

Short-Term Rental Occupancy Rate

The demand for more rental units in a location may be checked by analyzing the short-term rental occupancy rate. If nearly all of the rentals are full, that city requires new rental space. Low occupancy rates denote that there are already too many short-term units in that location.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return can tell you if the investment is a wise use of your own funds. You can compute the cash-on-cash return by taking your Net Operating Income (NOI) and dividing it by the cash you are putting in. The answer comes as a percentage. When an investment is lucrative enough to return the capital spent soon, you’ll get a high percentage. Sponsored investment purchases will show higher cash-on-cash returns as you will be utilizing less of your own capital.

Average Short-Term Rental Capitalization (Cap) Rates

This criterion compares property worth to its yearly income. A rental unit that has a high cap rate as well as charging average market rental prices has a high market value. When investment real estate properties in an area have low cap rates, they typically will cost more. The cap rate is calculated by dividing the Net Operating Income (NOI) by the price or market worth. The answer is the yearly return in a percentage.

Local Attractions

Short-term renters are often people who visit a community to enjoy a yearly special activity or visit tourist destinations. When a city has sites that periodically hold interesting events, like sports coliseums, universities or colleges, entertainment halls, and adventure parks, it can attract visitors from out of town on a constant basis. Outdoor attractions such as mountainous areas, waterways, beaches, and state and national parks will also draw potential renters.

The fix and flip investment plan means buying a property that requires repairs or renovation, putting additional value by enhancing the property, and then liquidating it for a better market worth. Your estimate of repair costs must be correct, and you should be capable of acquiring the unit for lower than market worth.

You also want to understand the resale market where the house is located. You always want to research how long it takes for homes to sell, which is illustrated by the Days on Market (DOM) data. Selling real estate immediately will keep your expenses low and ensure your revenue.

Help compelled property owners in locating your firm by featuring it in our directory of Highland County cash real estate buyers and the best Highland County real estate investment firms.

In addition, hunt for bird dogs for real estate investors in Highland County OH. Experts on our list focus on securing distressed property investment opportunities while they’re still off the market.

Factors to Consider

Median Home Price

When you search for a suitable region for home flipping, look at the median housing price in the city. Low median home prices are a sign that there must be a steady supply of houses that can be acquired for lower than market value. This is a principal feature of a fix and flip market.

If you see a sharp decrease in real estate market values, this may signal that there are potentially properties in the area that will work for a short sale. You’ll find out about potential investments when you partner up with Highland County short sale negotiation companies. Find out how this is done by studying our article ⁠— How to Buy a House in a Short Sale.

Property Appreciation Rate

Are real estate values in the area moving up, or moving down? You are eyeing for a constant growth of the area’s home market values. Volatile price fluctuations are not good, even if it’s a significant and quick increase. You may end up buying high and selling low in an hectic market.

Average Renovation Costs

A thorough analysis of the region’s building costs will make a huge influence on your area selection. The manner in which the municipality goes about approving your plans will have an effect on your investment too. To create an on-target financial strategy, you will want to find out whether your construction plans will have to use an architect or engineer.

Population Growth

Population information will show you if there is steady necessity for homes that you can produce. When there are buyers for your renovated houses, the data will illustrate a strong population growth.

Median Population Age

The median population age is a straightforward indication of the accessibility of preferable home purchasers. The median age in the region must equal the one of the regular worker. Employed citizens are the people who are probable home purchasers. Aging individuals are getting ready to downsize, or relocate into age-restricted or assisted living communities.

Unemployment Rate

You need to see a low unemployment rate in your considered market. The unemployment rate in a potential investment market should be lower than the US average. When it is also less than the state average, that’s much better. In order to buy your improved property, your prospective buyers have to have a job, and their clients as well.

Income Rates

The citizens’ wage levels can brief you if the community’s economy is scalable. When property hunters acquire a home, they usually have to obtain financing for the purchase. To be approved for a home loan, a borrower should not spend for housing more than a particular percentage of their income. The median income numbers will show you if the region is beneficial for your investment plan. Search for places where salaries are going up. When you want to augment the price of your houses, you have to be sure that your customers’ income is also going up.

Number of New Jobs Created

The number of jobs generated yearly is vital information as you contemplate on investing in a particular community. Homes are more effortlessly liquidated in a region that has a robust job market. New jobs also lure wage earners moving to the location from other places, which further reinforces the property market.

Hard Money Loan Rates

Investors who sell rehabbed houses frequently utilize hard money loans rather than regular mortgage. Hard money funds allow these purchasers to move forward on pressing investment opportunities immediately. Look up top Highland County hard money lenders for real estate investors and compare lenders’ charges.

Someone who needs to learn about hard money funding options can find what they are as well as the way to use them by reviewing our resource for newbies titled What Is a Hard Money Loan for Real Estate?.

As a real estate wholesaler, you enter a sale and purchase agreement to purchase a residential property that other real estate investors might need. When a real estate investor who wants the residential property is found, the sale and purchase agreement is sold to the buyer for a fee. The property is bought by the investor, not the real estate wholesaler. You are selling the rights to the purchase contract, not the home itself.

This strategy requires utilizing a title company that is familiar with the wholesale purchase and sale agreement assignment operation and is qualified and inclined to manage double close transactions. Locate title services for real estate investors in Highland County OH in our directory.

Our in-depth guide to wholesaling can be found here: A-to-Z Guide to Property Wholesaling. As you conduct your wholesaling business, put your company in HouseCashin’s list of Highland County top home wholesalers. This will let your future investor customers discover and call you.

Factors to Consider

Median Home Prices

Median home prices are essential to finding areas where houses are selling in your investors’ purchase price range. A place that has a sufficient source of the below-market-value residential properties that your customers require will display a below-than-average median home purchase price.

A fast decline in the market value of real estate may generate the swift availability of homes with owners owing more than market worth that are wanted by wholesalers. Wholesaling short sale properties frequently delivers a number of unique advantages. Nevertheless, there might be liabilities as well. Find out details concerning wholesaling short sale properties with our complete explanation. When you’re ready to start wholesaling, look through Highland County top short sale law firms as well as Highland County top-rated foreclosure law offices lists to discover the appropriate counselor.

Property Appreciation Rate

Median home purchase price trends are also vital. Many investors, like buy and hold and long-term rental investors, specifically want to see that residential property market values in the community are growing steadily. Dropping market values illustrate an unequivocally weak leasing and home-selling market and will chase away investors.

Population Growth

Population growth data is important for your potential contract purchasers. If they realize the community is expanding, they will decide that additional housing units are a necessity. This includes both rental and ‘for sale’ real estate. When an area is declining in population, it doesn’t require more residential units and real estate investors will not be active there.

Median Population Age

A dynamic housing market prefers people who are initially renting, then shifting into homebuyers, and then buying up in the housing market. A city that has a large employment market has a consistent source of tenants and buyers. That is why the community’s median age should be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income in a good real estate investment market need to be going up. Income hike shows a community that can deal with rent and home purchase price increases. Successful investors stay away from cities with poor population salary growth indicators.

Unemployment Rate

Investors will thoroughly estimate the city’s unemployment rate. Renters in high unemployment locations have a challenging time making timely rent payments and some of them will stop making payments completely. Long-term real estate investors who rely on uninterrupted lease payments will suffer in these cities. High unemployment creates uncertainty that will prevent interested investors from purchasing a home. This is a problem for short-term investors buying wholesalers’ contracts to renovate and resell a home.

Number of New Jobs Created

The number of more jobs appearing in the market completes an investor’s evaluation of a future investment location. Fresh jobs produced lead to more workers who look for houses to lease and purchase. Employment generation is beneficial for both short-term and long-term real estate investors whom you rely on to purchase your contracted properties.

Average Renovation Costs

An essential consideration for your client real estate investors, especially fix and flippers, are rehab costs in the market. The price, plus the costs of rehabilitation, must be less than the After Repair Value (ARV) of the real estate to create profitability. Give preference to lower average renovation costs.

Note investing means obtaining debt (mortgage note) from a lender at a discount. This way, the purchaser becomes the lender to the first lender’s debtor.

Performing loans are loans where the debtor is always on time with their loan payments. Performing loans earn you monthly passive income. Some mortgage note investors like non-performing loans because when the mortgage note investor can’t successfully rework the loan, they can always acquire the collateral property at foreclosure for a low price.

Eventually, you could have a large number of mortgage notes and necessitate more time to service them without help. In this case, you could hire one of home loan servicers in Highland County OH that would essentially convert your investment into passive income.

Should you decide to employ this strategy, add your venture to our directory of mortgage note buying companies in Highland County OH. Once you do this, you will be discovered by the lenders who announce profitable investment notes for procurement by investors such as yourself.

Factors to consider

Foreclosure Rates

Performing loan buyers are on lookout for communities showing low foreclosure rates. High rates may signal opportunities for non-performing note investors, but they have to be cautious. The locale should be robust enough so that investors can complete foreclosure and resell collateral properties if required.

Foreclosure Laws

It is critical for mortgage note investors to study the foreclosure laws in their state. Some states require mortgage paperwork and some require Deeds of Trust. A mortgage requires that you go to court for permission to start foreclosure. Investors do not have to have the court’s approval with a Deed of Trust.

Mortgage Interest Rates

The mortgage interest rate is indicated in the mortgage loan notes that are purchased by note buyers. Your mortgage note investment profits will be influenced by the mortgage interest rate. Mortgage interest rates are important to both performing and non-performing note investors.

Conventional interest rates can be different by as much as a 0.25% across the US. The stronger risk taken on by private lenders is shown in higher mortgage loan interest rates for their mortgage loans in comparison with traditional loans.

Note investors ought to always know the prevailing local interest rates, private and traditional, in potential note investment markets.

Demographics

A successful note investment strategy uses an examination of the area by using demographic data. It’s important to know if enough people in the neighborhood will continue to have reliable employment and incomes in the future.
Performing note buyers need customers who will pay without delay, generating a consistent income flow of mortgage payments.

The same area could also be profitable for non-performing mortgage note investors and their end-game strategy. If non-performing note investors have to foreclose, they’ll have to have a strong real estate market in order to sell the collateral property.

Property Values

The more equity that a homebuyer has in their property, the better it is for you as the mortgage note owner. If the value isn’t significantly higher than the loan balance, and the lender decides to foreclose, the house might not sell for enough to repay the lender. Rising property values help increase the equity in the house as the borrower lessens the amount owed.

Property Taxes

Many homeowners pay real estate taxes via lenders in monthly installments while sending their mortgage loan payments. By the time the property taxes are due, there should be sufficient funds being held to take care of them. The mortgage lender will have to make up the difference if the house payments halt or the investor risks tax liens on the property. Tax liens go ahead of any other liens.

If a region has a history of growing property tax rates, the combined home payments in that community are consistently expanding. Homeowners who have a hard time affording their mortgage payments may fall farther behind and ultimately default.

Real Estate Market Strength

A region with appreciating property values offers strong potential for any note buyer. It’s good to know that if you are required to foreclose on a property, you won’t have trouble obtaining an acceptable price for the property.

Note investors additionally have an opportunity to make mortgage loans directly to homebuyers in consistent real estate communities. It is another stage of a mortgage note investor’s career.

Many real estate investment organizations are conceived as trusts termed Real Estate Investment Trusts or REITs. This was first conceived as a method to permit the everyday investor to invest in real estate. Many people at present are capable of investing in a REIT.

Participants in REITs are totally passive investors. Investment exposure is diversified across a portfolio of investment properties. Shares may be unloaded whenever it is beneficial for the investor. But REIT investors don’t have the ability to select individual properties or markets. Their investment is confined to the real estate properties chosen by their REIT.

Mutual funds that hold shares of real estate businesses are called real estate investment funds. The fund does not own real estate — it owns shares in real estate firms. These funds make it easier for more investors to invest in real estate. Whereas REITs have to disburse dividends to its shareholders, funds do not. The value of a fund to an investor is the projected growth of the value of the shares.

You are able to pick a fund that concentrates on specific categories of the real estate business but not particular locations for individual real estate investment. You have to count on the fund’s directors to choose which markets and properties are selected for investment.