Ultimate Kent Lakes Real Estate Investing Guide for 2024

The term BRRRR is a description of a long-term rental plan — Buy, Rehab, Rent, Refinance, Repeat. BRRRR is a system for repeated expansion. This strategy depends on your ability to withdraw money out when you refinance.

When you are done with rehabbing the rental, its value has to be more than your total acquisition and rehab spendings. Then you receive a cash-out refinance loan that is based on the higher property worth, and you take out the difference. You acquire your next rental with the cash-out capital and start anew. You add income-producing assets to the portfolio and rental income to your cash flow.

If an investor owns a significant number of investment properties, it seems smart to hire a property manager and designate a passive income source. Locate Kent Lakes investment property management companies when you go through our directory of professionals.

Factors to Consider

Population Growth

The increase or downturn of a region’s population is an accurate benchmark of the region’s long-term attractiveness for lease property investors. If the population growth in a region is strong, then more tenants are likely coming into the community. The market is attractive to companies and employees to situate, find a job, and raise households. An expanding population constructs a stable base of tenants who can handle rent raises, and an active property seller’s market if you decide to sell your investment assets.

Property Taxes

Real estate taxes, regular upkeep spendings, and insurance specifically decrease your bottom line. Steep property tax rates will negatively impact a property investor’s income. Locations with unreasonable property taxes are not a dependable situation for short- and long-term investment and need to be avoided.

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 tolerate. If median home values are strong and median rents are low — a high p/r — it will take longer for an investment to repay your costs and reach good returns. A higher p/r informs you that you can demand modest rent in that market, a lower p/r shows that you can demand more.

Median Gross Rents

Median gross rents are an important sign of the strength of a rental market. Median rents should be growing to justify your investment. If rental rates are being reduced, you can drop that market from consideration.

Median Population Age

Median population age will be nearly the age of a typical worker if a city has a strong supply of tenants. You will find this to be factual in locations where people are migrating. If you see a high median age, your supply of tenants is declining. A thriving real estate market cannot be sustained by retirees.

Employment Base Diversity

A diversified number of businesses in the city will expand your prospects for better income. If working individuals are employed by a couple of dominant companies, even a slight disruption in their operations could cost you a lot of tenants and increase your risk substantially.

Unemployment Rate

You will not have a steady rental income stream in a city with high unemployment. Out-of-work residents can’t be customers of yours and of related companies, which creates a ripple effect throughout the region. The remaining workers could find their own wages reduced. This may increase the instances of late rent payments and lease defaults.

Income Rates

Median household and per capita income will illustrate if the renters that you prefer are living in the area. Existing salary records will communicate to you if wage increases will allow you to mark up rental charges to reach your income estimates.

Number of New Jobs Created

The more jobs are consistently being created in a community, the more dependable your tenant pool will be. The workers who take the new jobs will require a residence. This enables you to acquire more rental real estate and replenish existing empty units.

School Ratings

School quality in the area will have a huge influence on the local property market. When a business assesses a region for potential expansion, they know that quality education is a must-have for their employees. Moving businesses relocate and draw potential tenants. Homeowners who move to the region have a good influence on home values. For long-term investing, look for highly accredited schools in a potential investment location.

Property Appreciation Rates

Property appreciation rates are an important portion of your long-term investment plan. You need to see that the odds of your asset appreciating in price in that community are good. Inferior or declining property appreciation rates should remove a location from the selection.

Residential units where renters live in furnished spaces for less than thirty days are referred to as short-term rentals. Long-term rentals, such as apartments, require lower rent per night than short-term ones. Because of the increased rotation of tenants, short-term rentals necessitate additional recurring upkeep and sanitation.

Short-term rentals are popular with individuals traveling on business who are in the region for several days, those who are migrating and need transient housing, and tourists. Any homeowner can transform their home into a short-term rental unit with the services made available by online home-sharing platforms like VRBO and AirBnB. Short-term rentals are thought of as a good way to embark upon investing in real estate.

Short-term rental units require engaging with renters more frequently than long-term rentals. This results in the owner having to regularly manage grievances. You may need to defend your legal liability by working with one of the best Kent Lakes real estate law firms.

Factors to Consider

Short-Term Rental Income

First, find out the amount of rental income you need to meet your desired profits. Knowing the standard rate of rent being charged in the region for short-term rentals will enable you to pick a desirable location to invest.

Median Property Prices

Thoroughly evaluate the budget that you can spend on additional real estate. To find out if a region has opportunities for investment, look at the median property prices. You can tailor your real estate search by examining median prices in the community’s sub-markets.

Price Per Square Foot

Price per square foot can be misleading if you are looking at different units. When the designs of potential properties are very different, the price per square foot may not show a precise comparison. It can be a fast way to analyze different sub-markets or properties.

Short-Term Rental Occupancy Rate

The percentage of short-term rental units that are presently tenanted in a community is important information for a rental unit buyer. When almost all of the rental properties are full, that market necessitates new rental space. If the rental occupancy rates are low, there is not enough place in the market and you should look elsewhere.

Short-Term Rental Cash-on-Cash Return

To determine if you should invest your capital in a specific property or community, calculate the cash-on-cash return. You can compute the cash-on-cash return by taking your Net Operating Income (NOI) and dividing it by your cash investment. The result comes as a percentage. High cash-on-cash return shows that you will regain your cash quicker and the investment will earn more profit. Lender-funded investment ventures will reap better cash-on-cash returns because you are using less of your own resources.

Average Short-Term Rental Capitalization (Cap) Rates

Another measurement conveys the market value of a property as a return-yielding asset — average short-term rental capitalization (cap) rate. Typically, the less a property costs (or is worth), the higher the cap rate will be. When investment real estate properties in an area have low cap rates, they typically will cost more money. You can calculate the cap rate for potential investment real estate by dividing the Net Operating Income (NOI) by the market worth or listing price of the residential property. The result is the per-annum return in a percentage.

Local Attractions

Short-term rental units are preferred in regions where visitors are attracted by events and entertainment venues. This includes major sporting events, youth sports activities, schools and universities, big auditoriums and arenas, carnivals, and theme parks. Popular vacation attractions are situated in mountain and coastal areas, near rivers, and national or state nature reserves.

To fix and flip real estate, you need to buy it for lower than market worth, handle any needed repairs and enhancements, then dispose of the asset for after-repair market value. The secrets to a lucrative investment are to pay less for the investment property than its full value and to carefully calculate the amount you need to spend to make it sellable.

It’s a must for you to know the rates properties are selling for in the city. Choose an area that has a low average Days On Market (DOM) metric. To effectively “flip” real estate, you need to dispose of the renovated house before you have to put out funds maintaining it.

In order that property owners who have to get cash for their property can effortlessly locate you, showcase your availability by utilizing our catalogue of the best cash property buyers in Kent Lakes NY along with the best real estate investors in Kent Lakes NY.

Additionally, look for bird dogs for real estate investors in Kent Lakes NY. These experts concentrate on quickly discovering good investment ventures before they hit the marketplace.

Factors to Consider

Median Home Price

Median property value data is a key tool for estimating a future investment area. Lower median home prices are a hint that there must be an inventory of real estate that can be bought for less than market worth. This is a necessary ingredient of a fix and flip market.

When you notice a fast decrease in home market values, this may mean that there are potentially houses in the city that will work for a short sale. Real estate investors who partner with short sale facilitators in Kent Lakes NY receive continual notices regarding possible investment real estate. You will find additional information regarding short sales in our guide ⁠— What Does Short Sale Mean in Buying a House?.

Property Appreciation Rate

The changes in real property values in a community are very important. You are looking for a reliable increase of the city’s housing prices. Real estate prices in the city should be growing steadily, not rapidly. When you’re acquiring and selling fast, an uncertain market can harm your efforts.

Average Renovation Costs

A comprehensive analysis of the city’s building costs will make a substantial impact on your market selection. Other spendings, like clearances, can shoot up your budget, and time which may also turn into an added overhead. If you need to present a stamped suite of plans, you will need to incorporate architect’s fees in your costs.

Population Growth

Population growth statistics allow you to take a look at housing need in the market. Flat or negative population growth is a sign of a feeble environment with not a lot of buyers to validate your effort.

Median Population Age

The median residents’ age will additionally tell you if there are qualified home purchasers in the city. If the median age is equal to that of the usual worker, it’s a good indication. Workers can be the individuals who are potential homebuyers. People who are preparing to leave the workforce or are retired have very specific residency needs.

Unemployment Rate

You need to have a low unemployment level in your investment region. An unemployment rate that is less than the nation’s average is preferred. When it is also less than the state average, it’s much more attractive. Unemployed individuals cannot acquire your property.

Income Rates

Median household and per capita income numbers tell you if you can obtain adequate buyers in that city for your homes. The majority of individuals who buy a house have to have a home mortgage loan. Home purchasers’ capacity to be provided financing rests on the level of their salaries. You can determine from the city’s median income whether enough individuals in the community can afford to buy your properties. Search for regions where salaries are rising. Building expenses and home prices go up from time to time, and you need to be sure that your prospective homebuyers’ income will also get higher.

Number of New Jobs Created

Understanding how many jobs are generated yearly in the city can add to your assurance in a city’s investing environment. More citizens purchase homes if the city’s financial market is adding new jobs. With additional jobs appearing, new prospective buyers also migrate to the region from other locations.

Hard Money Loan Rates

Fix-and-flip investors regularly use hard money loans in place of typical financing. This strategy lets investors negotiate profitable ventures without delay. Review Kent Lakes private money lenders and study lenders’ fees.

Those who aren’t knowledgeable regarding hard money loans can uncover what they should know with our detailed explanation for newbies — What Is a Private Money Lender?.

Wholesaling is a real estate investment approach that involves scouting out houses that are desirable to real estate investors and signing a purchase contract. When a real estate investor who approves of the property is found, the sale and purchase agreement is assigned to them for a fee. The real estate investor then finalizes the acquisition. You’re selling the rights to buy the property, not the property itself.

The wholesaling mode of investing includes the engagement of a title insurance company that grasps wholesale deals and is savvy about and engaged in double close deals. Locate investor friendly title companies in Kent Lakes NY in our directory.

Read more about how wholesaling works from our extensive guide — Real Estate Wholesaling Explained for Beginners. When employing this investment tactic, include your business in our directory of the best property wholesalers in Kent Lakes NY. This will help your potential investor clients discover and contact you.

Factors to Consider

Median Home Prices

Median home values in the community being assessed will roughly show you whether your real estate investors’ preferred properties are located there. Since investors want investment properties that are on sale for less than market price, you will need to find lower median purchase prices as an implicit tip on the potential source of properties that you could purchase for lower than market value.

A fast decrease in the market value of real estate may generate the abrupt availability of homes with negative equity that are desired by wholesalers. This investment method frequently delivers multiple uncommon benefits. But it also raises a legal liability. Find out about this from our detailed article Can You Wholesale a Short Sale House?. Once you’ve determined to try wholesaling short sales, be certain to hire someone on the directory of the best short sale attorneys in Kent Lakes NY and the best property foreclosure attorneys in Kent Lakes NY to assist you.

Property Appreciation Rate

Median home value movements explain in clear detail the housing value picture. Real estate investors who plan to keep investment assets will need to discover that home prices are consistently increasing. Both long- and short-term investors will avoid an area where home market values are decreasing.

Population Growth

Population growth statistics are an indicator that investors will consider thoroughly. When they realize the population is growing, they will presume that additional housing units are a necessity. This involves both leased and ‘for sale’ real estate. When a community is declining in population, it does not need additional housing and real estate investors will not look there.

Median Population Age

A good residential real estate market for real estate investors is agile in all areas, notably tenants, who turn into home purchasers, who transition into more expensive properties. A place that has a big workforce has a strong pool of tenants and purchasers. A market with these attributes will have a median population age that is the same as the wage-earning resident’s age.

Income Rates

The median household and per capita income in a reliable real estate investment market need to be increasing. Income increment demonstrates a place that can handle rent and housing listing price raises. Investors have to have this if they are to meet their expected profitability.

Unemployment Rate

Investors will pay close attention to the area’s unemployment rate. High unemployment rate prompts more tenants to delay rental payments or default altogether. Long-term real estate investors who count on timely rental income will do poorly in these locations. High unemployment builds uncertainty that will prevent people from buying a house. Short-term investors won’t risk being cornered with a property they cannot resell quickly.

Number of New Jobs Created

Knowing how soon additional jobs are generated in the community can help you see if the home is positioned in a vibrant housing market. Fresh jobs generated attract an abundance of employees who require spaces to lease and purchase. This is helpful for both short-term and long-term real estate investors whom you count on to buy your wholesale real estate.

Average Renovation Costs

Rehabilitation costs have a important influence on a flipper’s profit. Short-term investors, like house flippers, will not earn anything if the purchase price and the repair expenses equal to more money than the After Repair Value (ARV) of the property. The less expensive it is to fix up a house, the more profitable the location is for your future purchase agreement buyers.

Mortgage note investors purchase a loan from mortgage lenders if the investor can get it for a lower price than face value. When this occurs, the note investor takes the place of the borrower’s lender.

Performing loans are loans where the homeowner is always current on their loan payments. They give you stable passive income. Some note investors like non-performing notes because when the mortgage note investor cannot successfully rework the loan, they can always obtain the property at foreclosure for a low price.

At some time, you could create a mortgage note collection and start lacking time to handle your loans by yourself. At that time, you might want to employ our catalogue of Kent Lakes top loan portfolio servicing companies and reclassify your notes as passive investments.

If you determine that this plan is perfect for you, include your name in our directory of Kent Lakes top promissory note buyers. Joining will help you become more visible to lenders offering profitable opportunities to note buyers like you.

Factors to Consider

Foreclosure Rates

Mortgage note investors hunting for current loans to buy will hope to uncover low foreclosure rates in the market. High rates may signal opportunities for non-performing mortgage note investors, but they have to be cautious. The locale ought to be robust enough so that investors can foreclose and liquidate properties if needed.

Foreclosure Laws

It is critical for note investors to learn the foreclosure laws in their state. Are you working with a Deed of Trust or a mortgage? Lenders might need to obtain the court’s permission to foreclose on a mortgage note’s collateral. You only have to file a notice and proceed with foreclosure steps if you’re working with a Deed of Trust.

Mortgage Interest Rates

Purchased mortgage notes come with an agreed interest rate. That rate will unquestionably affect your profitability. Mortgage interest rates are critical to both performing and non-performing note investors.

Traditional interest rates can vary by as much as a quarter of a percent throughout the US. Mortgage loans offered by private lenders are priced differently and may be higher than traditional mortgages.

Experienced note investors regularly search the mortgage interest rates in their community offered by private and traditional mortgage firms.

Demographics

A city’s demographics data help mortgage note buyers to streamline their work and properly distribute their assets. It is critical to know whether an adequate number of people in the market will continue to have good jobs and incomes in the future.
Performing note buyers want clients who will pay on time, creating a repeating revenue flow of loan payments.

The identical market might also be good for non-performing mortgage note investors and their end-game plan. If these note buyers need to foreclose, they’ll need a vibrant real estate market to sell the REO property.

Property Values

The greater the equity that a homeowner has in their home, the better it is for their mortgage lender. If the property value is not higher than the mortgage loan balance, and the lender has to start foreclosure, the collateral might not sell for enough to payoff the loan. Rising property values help raise the equity in the collateral as the homeowner lessens the balance.

Property Taxes

Usually homeowners pay real estate taxes to mortgage lenders in monthly installments along with their loan payments. That way, the lender makes sure that the real estate taxes are submitted when due. The mortgage lender will need to take over if the mortgage payments halt or the investor risks tax liens on the property. If a tax lien is put in place, the lien takes first position over the your note.

If a municipality has a history of growing tax rates, the combined house payments in that community are constantly increasing. Homeowners who are having a hard time affording their loan payments could fall farther behind and ultimately default.

Real Estate Market Strength

Both performing and non-performing note buyers can work in a growing real estate environment. It’s crucial to know that if you need to foreclose on a property, you will not have difficulty receiving an appropriate price for the property.

A strong real estate market can also be a lucrative place for making mortgage notes. It is an added stage of a note buyer’s career.

A REIT, or Real Estate Investment Trust, means a business that makes investments in income-generating assets. REITs are invented to enable ordinary investors to buy into properties. Many investors today are capable of investing in a REIT.

Shareholders’ participation in a REIT classifies as passive investing. REITs oversee investors’ risk with a varied group of assets. Participants have the right to liquidate their shares at any time. Something you cannot do with REIT shares is to determine the investment real estate properties. Their investment is confined to the properties chosen by their REIT.

Real estate investment funds are in essence mutual funds specializing in real estate companies, including REITs. Any actual property is possessed by the real estate firms rather than the fund. Investment funds are a cost-effective way to include real estate properties in your allotment of assets without avoidable liability. Funds aren’t required to distribute dividends like a REIT. The worth of a fund to someone is the expected increase of the worth of the fund’s shares.

You can choose a fund that concentrates on a selected kind of real estate you are knowledgeable about, but you don’t get to choose the location of each real estate investment. You have to depend on the fund’s directors to decide which locations and real estate properties are selected for investment.