Ultimate Juneau Real Estate Investing Guide for 2024

BRRRR stands for “Buy, Rehab, Rent, Refinance, Repeat”. When you desire to expand your investments, the BRRRR is a good plan to use. It is critical that you be able to do a “cash-out” mortgage refinance for the plan to work.

You improve the value of the property above the amount you spent purchasing and renovating the property. After that, you remove the equity you created from the property in a “cash-out” mortgage refinance. You acquire your next house with the cash-out funds and begin all over again. You acquire additional assets and repeatedly expand your lease revenues.

If your investment property collection is large enough, you may delegate its oversight and enjoy passive cash flow. Find top Juneau real estate managers by using our list.

Factors to Consider

Population Growth

The expansion or decline of a community’s population is a valuable barometer of its long-term attractiveness for lease property investors. An expanding population typically demonstrates active relocation which translates to additional tenants. Moving companies are attracted to increasing communities offering reliable jobs to people who move there. Growing populations maintain a reliable tenant reserve that can afford rent bumps and home purchasers who assist in keeping your property values high.

Property Taxes

Property taxes, similarly to insurance and maintenance costs, can vary from place to place and must be considered cautiously when assessing potential returns. Investment homes situated in excessive property tax locations will bring smaller returns. If property taxes are too high in a particular city, you will want to search somewhere else.

Price to Rent Ratio

The price to rent ratio (p/r) is a contrast of median property values and median rental rates that will show you how much rent the market can allow. How much you can collect in a market will limit the amount you are able to pay depending on the number of years it will take to recoup those costs. The lower rent you can demand the higher the price-to-rent ratio, with a low p/r showing a more robust rent market.

Median Gross Rents

Median gross rents let you see whether a location’s lease market is solid. Median rents should be growing to validate your investment. You will not be able to realize your investment predictions in a location where median gross rental rates are shrinking.

Median Population Age

The median population age that you are on the lookout for in a dynamic investment environment will be near the age of waged adults. This may also signal that people are moving into the city. A high median age illustrates that the existing population is aging out without being replaced by younger people migrating there. This isn’t good for the future financial market of that market.

Employment Base Diversity

A varied employment base is what an intelligent long-term investor landlord will look for. When the market’s employees, who are your renters, are employed by a varied number of employers, you cannot lose all of them at the same time (as well as your property’s value), if a significant enterprise in town goes out of business.

Unemployment Rate

It’s hard to achieve a sound rental market if there are many unemployed residents in it. Non-working individuals can’t buy products or services. The remaining people could discover their own incomes marked down. Even people who are employed will find it hard to stay current with their rent.

Income Rates

Median household and per capita income levels tell you if enough preferred renters reside in that market. Current income records will communicate to you if wage raises will allow you to hike rents to meet your investment return projections.

Number of New Jobs Created

The active economy that you are hunting for will be producing enough jobs on a regular basis. An economy that provides jobs also increases the amount of stakeholders in the real estate market. This ensures that you will be able to sustain an acceptable occupancy level and buy additional properties.

School Ratings

The reputation of school districts has a significant influence on property market worth across the city. Business owners that are interested in moving want top notch schools for their employees. Relocating businesses relocate and draw potential renters. Recent arrivals who purchase a place to live keep real estate market worth strong. You will not find a dynamically expanding residential real estate market without good schools.

Property Appreciation Rates

Real estate appreciation rates are an important element of your long-term investment plan. Investing in assets that you expect to maintain without being confident that they will appreciate in price is a blueprint for failure. Low or shrinking property appreciation rates will eliminate a community from the selection.

Residential real estate where renters stay in furnished units for less than thirty days are called short-term rentals. The nightly rental prices are usually higher in short-term rentals than in long-term ones. Because of the high rotation of occupants, short-term rentals require additional regular care and sanitation.

Home sellers waiting to relocate into a new house, backpackers, and individuals traveling on business who are stopping over in the location for about week prefer renting apartments short term. Regular real estate owners can rent their houses or condominiums on a short-term basis with websites such as AirBnB and VRBO. This makes short-term rental strategy an easy way to endeavor real estate investing.

Short-term rentals require interacting with renters more frequently than long-term ones. As a result, landlords deal with problems repeatedly. Think about managing your liability with the assistance of any of the best law firms for real estate in Juneau AK.

Factors to Consider

Short-Term Rental Income

First, figure out how much rental income you need to meet your expected return. A glance at a city’s current average short-term rental prices will show you if that is a good area for you.

Median Property Prices

Meticulously assess the budget that you can afford to spare for additional real estate. Look for areas where the purchase price you need corresponds with the present median property worth. You can also use median market worth in specific sub-markets within the market to pick cities for investment.

Price Per Square Foot

Price per square foot could be confusing when you are examining different properties. If you are examining the same kinds of real estate, like condos or separate single-family homes, the price per square foot is more reliable. You can use the price per sq ft information to see a good overall view of home values.

Short-Term Rental Occupancy Rate

The need for more rental units in a region can be verified by going over the short-term rental occupancy rate. A market that demands additional rental units will have a high occupancy rate. Weak occupancy rates denote that there are more than too many short-term units in that market.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will tell you if the purchase is a wise use of your money. You can calculate the cash-on-cash return by taking your Net Operating Income (NOI) and dividing it by the cash you are putting in. The return is shown as a percentage. If a venture is high-paying enough to reclaim the capital spent quickly, you will get a high percentage. Sponsored investment ventures can reap better cash-on-cash returns because you are using less of your own money.

Average Short-Term Rental Capitalization (Cap) Rates

Another measurement illustrates the value of an investment property as a return-yielding asset — average short-term rental capitalization (cap) rate. An income-generating asset that has a high cap rate as well as charges market rental prices has a strong market value. When cap rates are low, you can prepare to spend more money for rental units in that location. The cap rate is determined by dividing the Net Operating Income (NOI) by the asking price or market value. The result is the yearly return in a percentage.

Local Attractions

Major festivals and entertainment attractions will entice vacationers who will look for short-term rental units. This includes major sporting events, kiddie sports contests, schools and universities, big concert halls and arenas, carnivals, and theme parks. Outdoor scenic attractions such as mountainous areas, rivers, coastal areas, and state and national parks can also attract future renters.

The fix and flip approach requires purchasing a home that requires repairs or renovation, putting added value by upgrading the property, and then selling it for its full market worth. To keep the business profitable, the investor needs to pay below market price for the house and determine how much it will cost to rehab the home.

It is vital for you to know how much properties are going for in the market. You always need to check the amount of time it takes for homes to close, which is determined by the Days on Market (DOM) data. As a ”rehabber”, you will need to put up for sale the renovated real estate immediately so you can avoid carrying ongoing costs that will diminish your profits.

To help distressed property sellers find you, place your business in our directories of property cash buyers in Juneau AK and real estate investment companies in Juneau AK.

Additionally, hunt for the best bird dogs for real estate investors in Juneau AK. These specialists specialize in skillfully discovering lucrative investment ventures before they hit the market.

Factors to Consider

Median Home Price

The region’s median housing price will help you determine a good neighborhood for flipping houses. Low median home values are an indication that there must be a steady supply of residential properties that can be bought below market worth. You have to have cheaper houses for a lucrative deal.

If market data signals a sudden decline in property market values, this can point to the accessibility of possible short sale properties. You’ll learn about possible investments when you join up with Juneau short sale facilitators. Learn how this is done by reviewing our article ⁠— What Does Buying a Short Sale Home Mean?.

Property Appreciation Rate

Are home market values in the area on the way up, or moving down? You are looking for a stable increase of the city’s home values. Unpredictable price shifts are not beneficial, even if it is a significant and sudden increase. Buying at an inconvenient time in an unreliable market can be catastrophic.

Average Renovation Costs

You will need to look into construction costs in any future investment region. The manner in which the local government processes your application will have an effect on your investment as well. You have to be aware if you will be required to employ other experts, such as architects or engineers, so you can be ready for those spendings.

Population Growth

Population increase is a good indication of the strength or weakness of the region’s housing market. When the number of citizens isn’t going up, there is not going to be a good supply of homebuyers for your real estate.

Median Population Age

The median citizens’ age is a variable that you might not have included in your investment study. If the median age is the same as that of the average worker, it’s a good sign. People in the area’s workforce are the most steady home buyers. Aging people are getting ready to downsize, or relocate into age-restricted or retiree communities.

Unemployment Rate

If you stumble upon an area that has a low unemployment rate, it is a solid evidence of profitable investment opportunities. It should certainly be lower than the country’s average. When it’s also lower than the state average, that’s much better. Unemployed individuals won’t be able to buy your homes.

Income Rates

The residents’ wage levels can tell you if the local financial market is strong. The majority of individuals who acquire a home need a home mortgage loan. Home purchasers’ eligibility to be provided a loan depends on the level of their income. The median income levels will tell you if the region is beneficial for your investment project. You also want to have wages that are growing continually. Building spendings and housing purchase prices go up from time to time, and you want to be sure that your potential purchasers’ wages will also get higher.

Number of New Jobs Created

The number of jobs generated per year is valuable insight as you think about investing in a target community. More citizens acquire homes if the community’s financial market is adding new jobs. Fresh jobs also draw workers moving to the city from another district, which also revitalizes the local market.

Hard Money Loan Rates

Short-term investors often use hard money loans instead of traditional loans. This allows them to rapidly purchase distressed properties. Look up the best Juneau hard money lenders and study lenders’ costs.

An investor who wants to know about hard money loans can find what they are as well as the way to use them by reading our guide titled What Is a Hard Money Loan for Real Estate?.

As a real estate wholesaler, you sign a purchase contract to purchase a residential property that some other real estate investors will need. When a real estate investor who approves of the residential property is found, the purchase contract is assigned to them for a fee. The property is sold to the real estate investor, not the real estate wholesaler. The real estate wholesaler does not sell the property — they sell the contract to buy it.

The wholesaling form of investing includes the employment of a title company that understands wholesale purchases and is savvy about and active in double close deals. Discover Juneau investor friendly title companies by reviewing our list.

To know how real estate wholesaling works, read our comprehensive guide How Does Real Estate Wholesaling Work?. When you choose wholesaling, add your investment company in our directory of the best investment property wholesalers in Juneau AK. This will help any possible clients to locate you and initiate a contact.

Factors to Consider

Median Home Prices

Median home prices are key to finding cities where houses are being sold in your real estate investors’ purchase price range. Below average median prices are a solid indicator that there are enough residential properties that could be bought below market price, which real estate investors have to have.

Rapid weakening in real estate values may result in a lot of houses with no equity that appeal to short sale property buyers. Short sale wholesalers frequently receive advantages using this opportunity. However, it also presents a legal risk. Find out details concerning wholesaling short sale properties with our exhaustive explanation. Once you have decided to attempt wholesaling short sale homes, be sure to engage someone on the directory of the best short sale real estate attorneys in Juneau AK and the best mortgage foreclosure attorneys in Juneau AK to advise you.

Property Appreciation Rate

Property appreciation rate completes the median price data. Investors who plan to keep real estate investment assets will have to know that residential property prices are regularly increasing. Declining prices illustrate an equally weak rental and home-selling market and will scare away real estate investors.

Population Growth

Population growth numbers are crucial for your potential contract assignment buyers. When the population is growing, additional residential units are needed. There are many people who lease and additional customers who buy real estate. If a population isn’t growing, it does not need additional housing and real estate investors will search somewhere else.

Median Population Age

Investors have to participate in a robust property market where there is a considerable pool of renters, first-time homeowners, and upwardly mobile citizens purchasing better properties. For this to be possible, there has to be a stable workforce of potential tenants and homeowners. If the median population age mirrors the age of working citizens, it signals a vibrant property market.

Income Rates

The median household and per capita income show steady improvement historically in places that are ripe for real estate investment. Income growth shows a place that can manage rent and home listing price raises. That will be vital to the investors you need to reach.

Unemployment Rate

Investors will carefully evaluate the market’s unemployment rate. Renters in high unemployment places have a challenging time staying current with rent and many will miss payments completely. Long-term investors will not purchase real estate in an area like this. High unemployment causes unease that will keep interested investors from purchasing a house. This is a problem for short-term investors purchasing wholesalers’ agreements to fix and resell a house.

Number of New Jobs Created

Understanding how soon new job openings are generated in the city can help you find out if the home is situated in a reliable housing market. New residents settle in a region that has additional job openings and they need a place to reside. Long-term real estate investors, like landlords, and short-term investors that include rehabbers, are attracted to places with consistent job appearance rates.

Average Renovation Costs

An important variable for your client real estate investors, especially house flippers, are rehabilitation expenses in the city. Short-term investors, like home flippers, can’t earn anything when the price and the repair expenses equal to more than the After Repair Value (ARV) of the home. The cheaper it is to update a house, the better the place is for your future contract buyers.

Mortgage note investing involves buying debt (mortgage note) from a mortgage holder for less than the balance owed. By doing so, the purchaser becomes the lender to the first lender’s borrower.

Loans that are being repaid on time are considered performing loans. Performing notes are a steady source of passive income. Non-performing notes can be restructured or you can pick up the collateral for less than face value by initiating a foreclosure process.

One day, you could have multiple mortgage notes and have a hard time finding additional time to manage them on your own. In this event, you can enlist one of mortgage servicers in Juneau AK that will essentially convert your investment into passive cash flow.

Should you decide to try this investment plan, you should put your business in our directory of the best real estate note buying companies in Juneau AK. Joining will make your business more visible to lenders providing desirable possibilities to note buyers like you.

Factors to Consider

Foreclosure Rates

Investors hunting for stable-performing mortgage loans to buy will hope to see low foreclosure rates in the area. Non-performing note investors can carefully make use of places that have high foreclosure rates too. But foreclosure rates that are high may signal a slow real estate market where liquidating a foreclosed house could be a no easy task.

Foreclosure Laws

Experienced mortgage note investors are fully well-versed in their state’s regulations for foreclosure. Some states use mortgage paperwork and some utilize Deeds of Trust. A mortgage dictates that you go to court for permission to start foreclosure. You only have to file a public notice and start foreclosure process if you’re working with a Deed of Trust.

Mortgage Interest Rates

Purchased mortgage notes come with an agreed interest rate. That interest rate will undoubtedly impact your returns. No matter the type of investor you are, the mortgage loan note’s interest rate will be significant to your calculations.

The mortgage loan rates set by traditional mortgage firms are not identical everywhere. Loans offered by private lenders are priced differently and may be more expensive than conventional mortgages.

Experienced mortgage note buyers continuously check the mortgage interest rates in their region offered by private and traditional lenders.

Demographics

A neighborhood’s demographics details allow mortgage note investors to target their work and effectively distribute their resources. Investors can learn a great deal by reviewing the extent of the population, how many citizens have jobs, how much they earn, and how old the people are.
A young growing community with a strong employment base can generate a reliable income stream for long-term note buyers looking for performing mortgage notes.

The same region may also be profitable for non-performing mortgage note investors and their exit strategy. A resilient regional economy is needed if investors are to reach buyers for properties on which they have foreclosed.

Property Values

Lenders want to find as much equity in the collateral as possible. When the lender has to foreclose on a loan without much equity, the sale might not even repay the balance owed. Growing property values help raise the equity in the home as the borrower reduces the balance.

Property Taxes

Most homeowners pay property taxes via lenders in monthly installments when they make their mortgage loan payments. This way, the mortgage lender makes certain that the property taxes are taken care of when due. If the homebuyer stops paying, unless the loan owner takes care of the taxes, they won’t be paid on time. If a tax lien is filed, it takes first position over the mortgage lender’s loan.

If a region has a history of rising tax rates, the combined house payments in that community are constantly growing. This makes it tough for financially weak homeowners to stay current, so the loan might become past due.

Real Estate Market Strength

A growing real estate market with consistent value growth is beneficial for all types of mortgage note buyers. The investors can be assured that, when required, a repossessed collateral can be liquidated at a price that is profitable.

Note investors additionally have an opportunity to create mortgage notes directly to homebuyers in strong real estate markets. It is another stage of a note investor’s career.

A trust that owns income-generating real estate and that sells shares to investors is a REIT — Real Estate Investment Trust. This was initially invented as a method to enable the ordinary investor to invest in real estate. REIT shares are affordable for most investors.

REIT investing is one of the types of passive investing. The risk that the investors are accepting is diversified within a collection of investment real properties. Investors can unload their REIT shares whenever they wish. Something you can’t do with REIT shares is to determine the investment assets. Their investment is confined to the properties owned by the REIT.

Mutual funds that contain shares of real estate businesses are termed real estate investment funds. The fund does not own properties — it owns shares in real estate businesses. This is another method for passive investors to diversify their portfolio with real estate without the high entry-level investment or risks. Fund members may not get ordinary disbursements the way that REIT members do. The worth of a fund to an investor is the anticipated increase of the price of the shares.

You can select a fund that concentrates on a targeted category of real estate you’re knowledgeable about, but you don’t get to determine the geographical area of each real estate investment. Your choice as an investor is to pick a fund that you rely on to oversee your real estate investments.