Ultimate Laurens Real Estate Investing Guide for 2024

A long-term investment strategy that includes Buying a rental, Refurbishing, Renting, Refinancing it, and Repeating the procedure by spending the cash from the refinance is called BRRRR. This is a plan to expand your investment assets rather than acquire one rental property. A vital piece of this strategy is to be able to do a “cash-out” refinance.

When you are done with refurbishing the house, its market value must be higher than your combined purchase and fix-up costs. Next, you pocket the equity you produced out of the property in a “cash-out” mortgage refinance. You employ that cash to buy another property and the operation starts anew. You add growing investment assets to your balance sheet and lease revenue to your cash flow.

After you’ve built a substantial group of income generating real estate, you might prefer to hire others to handle your rental business while you enjoy recurring net revenues. Discover top real estate managers in Laurens SC by looking through our directory.

Factors to Consider

Population Growth

The growth or decline of the population can signal whether that region is appealing to rental investors. When you discover good population increase, you can be certain that the region is attracting possible tenants to the location. The community is desirable to employers and employees to move, work, and grow families. Growing populations create a strong renter reserve that can afford rent raises and homebuyers who assist in keeping your property values up.

Property Taxes

Real estate taxes, ongoing maintenance expenditures, and insurance directly influence your profitability. Unreasonable property taxes will hurt a property investor’s returns. If property tax rates are unreasonable in a specific area, you will need to look in a different location.

Price to Rent Ratio

The price to rent ratio (p/r) is a clue to what amount of rent can be collected compared to the value of the property. The amount of rent that you can charge in a location will impact the price you are willing to pay depending on the time it will take to repay those costs. The less rent you can collect the higher the p/r, with a low p/r signalling a better rent market.

Median Gross Rents

Median gross rents are a true yardstick of the approval of a lease market under discussion. You want to discover a location with repeating median rent expansion. Declining rental rates are a bad signal to long-term investor landlords.

Median Population Age

The median residents’ age that you are searching for in a favorable investment environment will be similar to the age of salaried adults. This can also show that people are migrating into the region. If you discover a high median age, your supply of renters is becoming smaller. An active economy cannot be supported by retired individuals.

Employment Base Diversity

Having numerous employers in the city makes the economy not as risky. When your tenants are employed by only several dominant enterprises, even a slight issue in their operations could cost you a lot of renters and expand your risk tremendously.

Unemployment Rate

High unemployment means fewer tenants and an unsafe housing market. Unemployed residents are no longer customers of yours and of related companies, which produces a domino effect throughout the community. This can generate a high amount of retrenchments or shrinking work hours in the location. This may result in late rent payments and renter defaults.

Income Rates

Median household and per capita income level is a beneficial instrument to help you discover the places where the renters you need are located. Historical income statistics will show you if wage raises will allow you to adjust rental charges to reach your income projections.

Number of New Jobs Created

An expanding job market equals a steady flow of renters. The people who take the new jobs will need housing. This guarantees that you can sustain an acceptable occupancy rate and buy more rentals.

School Ratings

Community schools can have a significant effect on the real estate market in their city. When a business considers an area for possible relocation, they know that first-class education is a necessity for their workers. Good renters are a consequence of a vibrant job market. Recent arrivals who purchase a place to live keep home prices strong. Highly-rated schools are a key factor for a vibrant property investment market.

Property Appreciation Rates

The basis of a long-term investment method is to hold the property. Investing in assets that you aim to hold without being certain that they will rise in price is a recipe for failure. Low or shrinking property worth in an area under examination is inadmissible.

A short-term rental is a furnished residence where a renter stays for less than 30 days. The per-night rental rates are usually higher in short-term rentals than in long-term rental properties. Because of the increased number of occupants, short-term rentals require additional frequent repairs and sanitation.

Short-term rentals are used by individuals on a business trip who are in the region for several days, those who are relocating and need temporary housing, and holidaymakers. Any homeowner can convert their residence into a short-term rental unit with the assistance given by online home-sharing sites like VRBO and AirBnB. Short-term rentals are viewed to be an effective method to jumpstart investing in real estate.

Vacation rental unit owners require interacting one-on-one with the tenants to a greater extent than the owners of annually rented properties. That determines that property owners deal with disputes more regularly. Give some thought to managing your liability with the assistance of one of the best real estate lawyers in Laurens SC.

Factors to Consider

Short-Term Rental Income

You need to determine the level of rental income you’re targeting based on your investment analysis. Understanding the average amount of rental fees in the region for short-term rentals will allow you to choose a profitable market to invest.

Median Property Prices

You also must determine the amount you can manage to invest. Look for areas where the purchase price you need matches up with the present median property values. You can also employ median market worth in targeted sections within the market to select cities for investing.

Price Per Square Foot

Price per sq ft could be misleading when you are examining different units. A building with open foyers and vaulted ceilings cannot be compared with a traditional-style property with bigger floor space. Price per sq ft can be a fast way to analyze multiple sub-markets or properties.

Short-Term Rental Occupancy Rate

A closer look at the location’s short-term rental occupancy rate will show you if there is an opportunity in the site for more short-term rental properties. If nearly all of the rental properties have tenants, that area demands more rentals. If the rental occupancy indicators are low, there isn’t enough space in the market and you need to explore somewhere else.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a method to evaluate the value of an investment venture. Divide the Net Operating Income (NOI) by the amount of cash used. The return is shown as a percentage. The higher it is, the more quickly your investment funds will be returned and you’ll start gaining profits. Funded projects will have a stronger cash-on-cash return because you’re investing less of your funds.

Average Short-Term Rental Capitalization (Cap) Rates

This criterion shows the comparability of rental property worth to its annual revenue. Generally, the less money an investment asset costs (or is worth), the higher the cap rate will be. When investment real estate properties in a city have low cap rates, they typically will cost more money. You can obtain the cap rate for possible investment property by dividing the Net Operating Income (NOI) by the market worth or listing price of the residential property. This shows you a ratio that is the yearly return, or cap rate.

Local Attractions

Short-term rental properties are desirable in places where tourists are drawn by events and entertainment venues. This includes collegiate sporting events, kiddie sports contests, schools and universities, big concert halls and arenas, carnivals, and theme parks. Outdoor scenic attractions such as mountains, rivers, beaches, and state and national parks will also draw future renters.

When a real estate investor purchases a house for less than the market value, fixes it so that it becomes more valuable, and then liquidates the home for a return, they are called a fix and flip investor. The keys to a lucrative investment are to pay less for real estate than its as-is value and to carefully determine the budget you need to make it saleable.

Investigate the housing market so that you understand the exact After Repair Value (ARV). The average number of Days On Market (DOM) for homes sold in the city is vital. To successfully “flip” real estate, you need to resell the repaired home before you are required to spend money to maintain it.

Assist compelled real property owners in finding your company by featuring it in our catalogue of Laurens companies that buy homes for cash and Laurens property investment firms.

Additionally, team up with Laurens property bird dogs. These professionals concentrate on skillfully uncovering good investment prospects before they come on the open market.

Factors to Consider

Median Home Price

The location’s median home value could help you find a suitable community for flipping houses. You are looking for median prices that are modest enough to show investment possibilities in the region. You have to have inexpensive houses for a lucrative fix and flip.

When regional data indicates a rapid drop in real estate market values, this can indicate the accessibility of possible short sale homes. You can be notified concerning these opportunities by working with short sale processors in Laurens SC. You will uncover more data about short sales in our article ⁠— What Is the Process to Buy a Short Sale House?.

Property Appreciation Rate

Are property prices in the community going up, or going down? Fixed growth in median prices demonstrates a strong investment environment. Rapid price growth could reflect a value bubble that isn’t sustainable. You could end up buying high and selling low in an unsustainable market.

Average Renovation Costs

Look closely at the potential rehab costs so you will know whether you can achieve your targets. The time it takes for acquiring permits and the local government’s requirements for a permit request will also influence your plans. To create an on-target budget, you’ll want to understand if your plans will be required to use an architect or engineer.

Population Growth

Population data will inform you if there is steady necessity for residential properties that you can supply. When there are buyers for your rehabbed houses, the numbers will indicate a positive population increase.

Median Population Age

The median residents’ age is a factor that you might not have taken into consideration. The median age in the market must be the one of the average worker. A high number of such residents demonstrates a significant source of homebuyers. Individuals who are planning to leave the workforce or are retired have very specific housing needs.

Unemployment Rate

If you run across a market having a low unemployment rate, it is a solid sign of profitable investment possibilities. The unemployment rate in a potential investment area needs to be lower than the nation’s average. If the community’s unemployment rate is less than the state average, that’s an indication of a strong investing environment. If they want to acquire your improved houses, your potential buyers are required to have a job, and their customers as well.

Income Rates

Median household and per capita income are a great gauge of the stability of the home-purchasing environment in the community. Most home purchasers normally borrow money to buy real estate. Homebuyers’ ability to obtain a mortgage relies on the size of their wages. The median income data tell you if the region is preferable for your investment endeavours. You also want to see salaries that are going up consistently. Construction costs and home purchase prices increase periodically, and you need to be certain that your target homebuyers’ income will also get higher.

Number of New Jobs Created

The number of jobs created yearly is valuable insight as you contemplate on investing in a target city. A growing job market means that more potential homeowners are amenable to buying a home there. Fresh jobs also lure workers arriving to the area from elsewhere, which further reinforces the real estate market.

Hard Money Loan Rates

Short-term real estate investors normally employ hard money loans instead of typical loans. This enables them to immediately buy distressed real estate. Locate hard money loan companies in Laurens SC and analyze their mortgage rates.

Investors who aren’t experienced concerning hard money lenders can discover what they need to learn with our guide for those who are only starting — What Does Hard Money Mean?.

In real estate wholesaling, you locate a residential property that investors would count as a good investment opportunity and enter into a contract to purchase the property. When a real estate investor who wants the residential property is found, the purchase contract is sold to them for a fee. The real estate investor then finalizes the purchase. The real estate wholesaler doesn’t sell the residential property itself — they just sell the rights to buy it.

Wholesaling depends on the involvement of a title insurance firm that is comfortable with assignment of contracts and comprehends how to deal with a double closing. Hunt for title services for wholesale investors in Laurens SC that we collected for you.

To learn how wholesaling works, study our insightful guide What Is Wholesaling in Real Estate Investing?. When you choose wholesaling, include your investment project on our list of the best wholesale property investors in Laurens SC. That will allow any potential clients to locate you and reach out.

Factors to Consider

Median Home Prices

Median home prices in the region will show you if your preferred purchase price point is achievable in that location. Since real estate investors need investment properties that are available for less than market value, you will have to find lower median prices as an implied hint on the potential supply of houses that you may purchase for less than market value.

Accelerated weakening in real property values might result in a supply of properties with no equity that appeal to short sale flippers. Short sale wholesalers can receive advantages from this strategy. But, be cognizant of the legal liability. Find out about this from our detailed article Can You Wholesale a Short Sale?. Once you’ve chosen to try wholesaling short sales, be sure to employ someone on the list of the best short sale attorneys in Laurens SC and the best foreclosure lawyers in Laurens SC to advise you.

Property Appreciation Rate

Median home price trends are also vital. Real estate investors who want to sit on investment assets will need to know that residential property prices are regularly going up. Both long- and short-term real estate investors will stay away from a city where residential prices are dropping.

Population Growth

Population growth statistics are a contributing factor that your prospective investors will be knowledgeable in. An expanding population will need more residential units. They realize that this will combine both rental and owner-occupied housing. If an area is declining in population, it doesn’t necessitate additional housing and investors will not look there.

Median Population Age

Investors want to participate in a robust real estate market where there is a considerable pool of tenants, first-time homeowners, and upwardly mobile citizens moving to larger homes. A community with a large workforce has a constant pool of tenants and purchasers. An area with these attributes will show a median population age that is equivalent to the employed citizens’ age.

Income Rates

The median household and per capita income in a good real estate investment market should be on the upswing. Surges in rent and purchase prices will be aided by rising income in the area. That will be crucial to the real estate investors you are looking to reach.

Unemployment Rate

The market’s unemployment rates are a key consideration for any targeted contract buyer. High unemployment rate triggers more tenants to delay rental payments or miss payments altogether. Long-term real estate investors who depend on steady lease income will lose money in these markets. High unemployment builds unease that will keep interested investors from buying a property. This is a problem for short-term investors buying wholesalers’ contracts to renovate and flip a property.

Number of New Jobs Created

Understanding how often new employment opportunities are generated in the region can help you find out if the real estate is located in a robust housing market. Additional jobs produced lead to a high number of employees who look for properties to lease and purchase. Whether your purchaser supply is made up of long-term or short-term investors, they will be attracted to a city with consistent job opening generation.

Average Renovation Costs

Renovation costs will be crucial to many investors, as they normally acquire inexpensive rundown properties to update. Short-term investors, like fix and flippers, will not make money when the price and the renovation costs equal to a larger sum than the After Repair Value (ARV) of the property. Lower average repair costs make a place more attractive for your top clients — rehabbers and other real estate investors.

Investing in mortgage notes (loans) is successful when the note can be bought for a lower amount than the face value. The debtor makes remaining payments to the mortgage note investor who is now their new mortgage lender.

Loans that are being paid on time are called performing notes. Performing notes give stable revenue for you. Investors also buy non-performing mortgage notes that they either rework to assist the debtor or foreclose on to obtain the property below actual value.

Ultimately, you could accrue a number of mortgage note investments and be unable to service them by yourself. In this case, you could hire one of third party mortgage servicers in Laurens SC that will essentially convert your investment into passive income.

Should you choose to pursue this plan, add your project to our directory of mortgage note buyers in Laurens SC. Showing up on our list sets you in front of lenders who make profitable investment opportunities available to note investors such as you.

Factors to Consider

Foreclosure Rates

Investors looking for stable-performing mortgage loans to purchase will prefer to find low foreclosure rates in the region. Non-performing loan investors can carefully take advantage of cities with high foreclosure rates as well. The locale needs to be robust enough so that mortgage note investors can complete foreclosure and resell collateral properties if needed.

Foreclosure Laws

Note investors are expected to understand their state’s laws concerning foreclosure prior to pursuing this strategy. They’ll know if their law dictates mortgage documents or Deeds of Trust. A mortgage dictates that you go to court for permission to foreclose. You only need to file a public notice and start foreclosure steps if you’re working with a Deed of Trust.

Mortgage Interest Rates

Note investors inherit the interest rate of the loan notes that they buy. That interest rate will unquestionably impact your profitability. Interest rates are critical to both performing and non-performing note investors.

Traditional interest rates may be different by as much as a quarter of a percent around the US. Private loan rates can be a little higher than traditional mortgage rates because of the larger risk accepted by private mortgage lenders.

Profitable note investors regularly search the rates in their area set by private and traditional mortgage companies.

Demographics

A region’s demographics details assist note investors to streamline their work and properly use their assets. It is crucial to determine whether a sufficient number of people in the region will continue to have good paying jobs and wages in the future.
A young growing market with a vibrant employment base can contribute a consistent revenue stream for long-term note buyers searching for performing notes.

The identical community may also be appropriate for non-performing note investors and their end-game strategy. A vibrant local economy is prescribed if they are to reach homebuyers for properties they’ve foreclosed on.

Property Values

Note holders like to find as much home equity in the collateral property as possible. When the property value is not much more than the loan balance, and the lender wants to foreclose, the collateral might not realize enough to payoff the loan. As loan payments lessen the balance owed, and the market value of the property goes up, the borrower’s equity increases.

Property Taxes

Payments for house taxes are usually given to the mortgage lender simultaneously with the mortgage loan payment. The lender passes on the taxes to the Government to ensure the taxes are paid on time. If mortgage loan payments aren’t current, the lender will have to choose between paying the property taxes themselves, or they become delinquent. If a tax lien is filed, it takes precedence over the mortgage lender’s loan.

Because tax escrows are collected with the mortgage loan payment, increasing property taxes indicate larger mortgage loan payments. This makes it complicated for financially strapped borrowers to meet their obligations, and the loan might become past due.

Real Estate Market Strength

A location with growing property values offers excellent opportunities for any mortgage note buyer. As foreclosure is an important element of mortgage note investment strategy, appreciating real estate values are crucial to locating a strong investment market.

Vibrant markets often show opportunities for private investors to originate the initial loan themselves. This is a profitable source of revenue for accomplished investors.

Some real estate investment companies are organized as trusts called Real Estate Investment Trusts or REITs. REITs were created to permit average people to invest in properties. Many people today are capable of investing in a REIT.

Participants in such organizations are totally passive investors. Investment liability is spread throughout a group of properties. Investors are able to sell their REIT shares whenever they need. One thing you can’t do with REIT shares is to select the investment real estate properties. You are confined to the REIT’s collection of real estate properties for investment.

Real estate investment funds are in essence mutual funds that specialize in real estate companies, such as REITs. Any actual real estate is owned by the real estate businesses, not the fund. This is another method for passive investors to spread their portfolio with real estate without the high entry-level expense or liability. Whereas REITs are meant to distribute dividends to its participants, funds don’t. The value of a fund to an investor is the projected growth of the worth of the fund’s shares.

You can find a fund that focuses on a specific category of real estate firm, like residential, but you cannot choose the fund’s investment properties or locations. You must depend on the fund’s managers to determine which locations and assets are chosen for investment.