Ultimate Licking County Real Estate Investing Guide for 2024

BRRRR stands for “Buy, Rehab, Rent, Refinance, Repeat”. This is a strategy to grow your investment portfolio rather than buy a single income generating property. This plan rests on your capability to take money out when you refinance.

When you have finished renovating the home, its value must be higher than your total acquisition and rehab spendings. Then you withdraw the equity you produced out of the property in a “cash-out” mortgage refinance. You acquire your next property with the cash-out sum and begin all over again. You acquire more and more properties and repeatedly increase your lease revenues.

When an investor holds a significant collection of real properties, it seems smart to employ a property manager and create a passive income source. Locate good property management companies by looking through our list.

Factors to Consider

Population Growth

The increase or downturn of a market’s population is a good gauge of the community’s long-term desirability for rental property investors. If the population growth in a region is robust, then additional tenants are definitely coming into the market. Employers see it as a desirable community to situate their business, and for employees to situate their families. A growing population builds a steady base of renters who will stay current with rent raises, and a robust property seller’s market if you need to sell any investment assets.

Property Taxes

Property taxes, ongoing upkeep expenses, and insurance directly influence your bottom line. High property tax rates will decrease a property investor’s income. Locations with steep property taxes are not a reliable situation for short- and long-term investment and should be avoided.

Price to Rent Ratio

Price to rent ratio (p/r) is a market indicator that tells you how much you can anticipate to charge for rent. The amount of rent that you can charge in an area will limit the price you are willing to pay based on the number of years it will take to pay back those funds. You are trying to find a lower p/r to be confident that you can price your rental rates high enough to reach acceptable profits.

Median Gross Rents

Median gross rents are an accurate yardstick of the acceptance of a rental market under discussion. Median rents should be increasing to validate your investment. You will not be able to realize your investment goals in a market where median gross rents are declining.

Median Population Age

Median population age will be nearly the age of a typical worker if a region has a good source of tenants. You’ll find this to be accurate in markets where people are moving. When working-age people are not venturing into the market to replace retirees, the median age will go higher. This isn’t promising for the forthcoming economy of that community.

Employment Base Diversity

Having various employers in the city makes the economy not as unstable. If your renters are employed by a few dominant enterprises, even a minor disruption in their operations might cost you a great deal of tenants and raise your exposure immensely.

Unemployment Rate

You can’t benefit from a steady rental cash flow in a market with high unemployment. Jobless residents are no longer customers of yours and of other companies, which produces a ripple effect throughout the city. Individuals who continue to keep their workplaces can discover their hours and wages cut. This may result in late rent payments and defaults.

Income Rates

Median household and per capita income stats tell you if a sufficient number of desirable renters live in that community. Your investment calculations will use rental fees and property appreciation, which will be determined by wage growth in the market.

Number of New Jobs Created

An increasing job market translates into a steady source of renters. A larger amount of jobs mean new renters. Your strategy of renting and acquiring more real estate needs an economy that can produce new jobs.

School Ratings

School reputation in the city will have a large effect on the local property market. Highly-graded schools are a necessity for companies that are looking to relocate. Reliable tenants are the result of a vibrant job market. New arrivals who need a home keep property values up. You will not discover a dynamically expanding housing market without highly-rated schools.

Property Appreciation Rates

Good property appreciation rates are a must for a viable long-term investment. You need to make sure that your assets will appreciate in market value until you want to dispose of them. Inferior or declining property appreciation rates should remove a community from your list.

A short-term rental is a furnished apartment or house where a renter lives for less than 30 days. Short-term rental landlords charge more rent per night than in long-term rental business. Short-term rental homes may require more constant care and cleaning.

House sellers standing by to relocate into a new residence, people on vacation, and corporate travelers who are staying in the location for a few days enjoy renting a residential unit short term. Ordinary property owners can rent their homes on a short-term basis through platforms like AirBnB and VRBO. This makes short-term rentals a feasible method to try residential property investing.

The short-term rental business includes interaction with occupants more frequently in comparison with yearly rental units. As a result, landlords handle issues repeatedly. You might want to cover your legal bases by engaging one of the best Licking County real estate law firms.

Factors to Consider

Short-Term Rental Income

You must calculate how much revenue has to be generated to make your investment pay itself off. A city’s short-term rental income levels will promptly show you when you can predict to reach your projected income range.

Median Property Prices

You also have to determine how much you can bear to invest. Scout for locations where the budget you prefer corresponds with the current median property worth. You can calibrate your area search by analyzing the median price in particular sections of the community.

Price Per Square Foot

Price per sq ft can be impacted even by the look and floor plan of residential properties. If you are looking at the same kinds of property, like condos or stand-alone single-family homes, the price per square foot is more consistent. If you take this into consideration, the price per sq ft can give you a general idea of property prices.

Short-Term Rental Occupancy Rate

The number of short-term rental properties that are currently filled in a location is vital knowledge for a future rental property owner. A high occupancy rate means that a new supply of short-term rentals is wanted. Low occupancy rates signify that there are more than too many short-term rental properties in that community.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a means to calculate the value of an investment venture. Take your expected Net Operating Income (NOI) and divide it by your investment cash budget. The percentage you get is your cash-on-cash return. The higher it is, the sooner your investment funds will be repaid and you will begin receiving profits. Financed investment purchases can reap higher cash-on-cash returns as you’re using less of your own cash.

Average Short-Term Rental Capitalization (Cap) Rates

One measurement shows the market value of real estate as a revenue-producing asset — average short-term rental capitalization (cap) rate. High cap rates show that properties are accessible in that location for decent prices. If properties in a market have low cap rates, they generally will cost more money. You can calculate the cap rate for potential investment real estate by dividing the Net Operating Income (NOI) by the Fair Market Value or purchase price of the residential property. The percentage you get is the investment property’s cap rate.

Local Attractions

Short-term rental units are desirable in places where visitors are attracted by events and entertainment sites. If an area has places that periodically produce exciting events, like sports coliseums, universities or colleges, entertainment halls, and amusement parks, it can invite visitors from out of town on a recurring basis. At particular periods, locations with outside activities in the mountains, oceanside locations, or alongside rivers and lakes will attract a throng of tourists who want short-term rental units.

The fix and flip approach entails buying a home that needs fixing up or restoration, creating more value by upgrading the property, and then liquidating it for a higher market value. The keys to a successful investment are to pay a lower price for the home than its actual worth and to precisely compute the amount needed to make it marketable.

You also have to know the resale market where the home is situated. Locate a region that has a low average Days On Market (DOM) metric. As a “house flipper”, you will have to sell the repaired property without delay in order to stay away from maintenance expenses that will diminish your returns.

Assist motivated real property owners in discovering your company by featuring your services in our catalogue of Licking County all cash home buyers and top Licking County real estate investment firms.

Additionally, hunt for top real estate bird dogs in Licking County OH. Specialists in our catalogue concentrate on securing desirable investments while they’re still under the radar.

Factors to Consider

Median Home Price

When you search for a desirable region for real estate flipping, research the median house price in the community. You’re hunting for median prices that are modest enough to reveal investment possibilities in the city. This is a basic component of a fix and flip market.

When your review entails a quick weakening in property values, it might be a sign that you will find real property that meets the short sale criteria. You will learn about potential investments when you team up with Licking County short sale negotiators. Discover more concerning this sort of investment explained in our guide What to Know When Buying a Short Sale House.

Property Appreciation Rate

The shifts in real property prices in a region are vital. You are eyeing for a consistent growth of local real estate market rates. Volatile price changes aren’t desirable, even if it’s a significant and quick increase. When you are purchasing and liquidating swiftly, an uncertain market can harm your investment.

Average Renovation Costs

A thorough study of the community’s building costs will make a significant influence on your market selection. The time it will require for acquiring permits and the municipality’s regulations for a permit application will also affect your decision. You have to be aware whether you will be required to employ other experts, such as architects or engineers, so you can get prepared for those expenses.

Population Growth

Population increase statistics allow you to take a look at housing demand in the area. When the number of citizens isn’t going up, there isn’t going to be a good supply of purchasers for your houses.

Median Population Age

The median population age is an indicator that you may not have considered. If the median age is the same as that of the regular worker, it’s a good indication. Workforce are the individuals who are probable home purchasers. Aging individuals are planning to downsize, or move into senior-citizen or retiree communities.

Unemployment Rate

If you stumble upon a location demonstrating a low unemployment rate, it is a strong indicator of good investment prospects. An unemployment rate that is less than the nation’s average is what you are looking for. If it’s also less than the state average, that’s even more desirable. Without a dynamic employment environment, a city won’t be able to supply you with qualified homebuyers.

Income Rates

Median household and per capita income are a solid sign of the stability of the home-purchasing market in the region. Most families need to borrow money to buy a house. The borrower’s salary will determine how much they can borrow and if they can buy a home. The median income statistics show you if the region is preferable for your investment efforts. Particularly, income increase is vital if you are looking to scale your investment business. To keep pace with inflation and increasing construction and material costs, you need to be able to regularly adjust your prices.

Number of New Jobs Created

Understanding how many jobs are generated every year in the area can add to your assurance in a city’s real estate market. A higher number of people buy houses if their area’s economy is generating jobs. Competent trained employees taking into consideration purchasing a house and deciding to settle opt for migrating to places where they will not be out of work.

Hard Money Loan Rates

Investors who flip renovated houses frequently utilize hard money funding instead of regular funding. Hard money loans allow these investors to pull the trigger on existing investment possibilities right away. Discover hard money loan companies in Licking County OH and contrast their rates.

Investors who aren’t experienced in regard to hard money lending can find out what they should understand with our detailed explanation for newbie investors — What Is a Hard Money Lender in Real Estate?.

In real estate wholesaling, you locate a home that investors would think is a profitable deal and sign a sale and purchase agreement to purchase the property. When a real estate investor who wants the property is found, the contract is sold to them for a fee. The real buyer then completes the acquisition. The wholesaler doesn’t sell the property itself — they simply sell the purchase agreement.

The wholesaling mode of investing includes the use of a title company that understands wholesale deals and is knowledgeable about and engaged in double close deals. Look for title services for wholesale investors in Licking County OH in HouseCashin’s list.

Read more about this strategy from our extensive guide — Wholesale Real Estate Investing 101 for Beginners. When you opt for wholesaling, include your investment company on our list of the best wholesale real estate investors in Licking County OH. This will let your future investor customers discover and call you.

Factors to Consider

Median Home Prices

Median home values in the market under review will quickly tell you whether your investors’ target properties are located there. Lower median prices are a good indicator that there are plenty of properties that might be purchased below market price, which investors prefer to have.

A quick decrease in the market value of property may generate the swift appearance of properties with more debt than value that are hunted by wholesalers. This investment method regularly delivers several different advantages. Nevertheless, it also creates a legal risk. Find out about this from our detailed article Can You Wholesale a Short Sale House?. If you want to give it a try, make certain you have one of short sale law firms in Licking County OH and real estate foreclosure attorneys in Licking County OH to work with.

Property Appreciation Rate

Median home purchase price fluctuations explain in clear detail the housing value picture. Many real estate investors, including buy and hold and long-term rental landlords, particularly need to know that residential property values in the region are going up steadily. Both long- and short-term real estate investors will ignore a region where home market values are decreasing.

Population Growth

Population growth data is a predictor that investors will consider in greater detail. When the community is growing, additional residential units are needed. Investors are aware that this will involve both rental and owner-occupied housing. A place with a shrinking population will not attract the real estate investors you need to purchase your purchase contracts.

Median Population Age

Investors want to work in a dynamic real estate market where there is a sufficient supply of tenants, newbie homebuyers, and upwardly mobile residents buying bigger properties. This necessitates a robust, stable employee pool of people who feel confident to buy up in the real estate market. When the median population age corresponds with the age of employed citizens, it demonstrates a robust housing market.

Income Rates

The median household and per capita income should be growing in a vibrant housing market that investors want to participate in. Income improvement proves a location that can manage lease rate and home purchase price surge. That will be important to the property investors you are looking to reach.

Unemployment Rate

The area’s unemployment stats will be a vital point to consider for any future contract buyer. Renters in high unemployment cities have a tough time paying rent on schedule and many will miss payments completely. Long-term real estate investors will not take a house in a place like this. Renters can’t move up to homeownership and existing homeowners cannot sell their property and move up to a larger home. Short-term investors will not risk being cornered with real estate they cannot liquidate without delay.

Number of New Jobs Created

The amount of jobs generated on a yearly basis is an important element of the housing framework. More jobs generated result in plenty of employees who look for properties to lease and buy. Long-term investors, like landlords, and short-term investors that include flippers, are gravitating to areas with good job creation rates.

Average Renovation Costs

Improvement spendings will be critical to most investors, as they typically acquire low-cost rundown homes to update. The price, plus the costs of renovation, must reach a sum that is less than the After Repair Value (ARV) of the property to allow for profitability. The less expensive it is to renovate a house, the more profitable the location is for your prospective contract buyers.

Buying mortgage notes (loans) pays off when the loan can be acquired for less than the remaining balance. When this happens, the investor becomes the debtor’s mortgage lender.

Loans that are being repaid on time are called performing loans. These notes are a consistent provider of passive income. Note investors also invest in non-performing mortgages that the investors either modify to assist the borrower or foreclose on to obtain the property below market worth.

Ultimately, you could have many mortgage notes and necessitate more time to handle them on your own. If this develops, you might pick from the best residential mortgage servicers in Licking County OH which will make you a passive investor.

When you decide to attempt this investment plan, you ought to place your venture in our directory of the best mortgage note buyers in Licking County OH. Appearing on our list places you in front of lenders who make lucrative investment possibilities available to note investors such as you.

Factors to consider

Foreclosure Rates

Investors hunting for current mortgage loans to buy will hope to uncover low foreclosure rates in the area. High rates could indicate opportunities for non-performing mortgage note investors, but they have to be cautious. If high foreclosure rates are causing a slow real estate market, it may be tough to liquidate the collateral property after you foreclose on it.

Foreclosure Laws

It is necessary for mortgage note investors to study the foreclosure regulations in their state. They’ll know if the state uses mortgages or Deeds of Trust. A mortgage requires that the lender goes to court for permission to foreclose. Lenders don’t need the judge’s permission with a Deed of Trust.

Mortgage Interest Rates

The mortgage interest rate is indicated in the mortgage loan notes that are bought by note buyers. That rate will significantly impact your investment returns. Interest rates influence the strategy of both types of note investors.

Conventional lenders price dissimilar mortgage interest rates in different parts of the country. The stronger risk assumed by private lenders is shown in bigger mortgage loan interest rates for their loans compared to conventional loans.

Mortgage note investors should always know the prevailing market mortgage interest rates, private and traditional, in potential mortgage note investment markets.

Demographics

A successful mortgage note investment plan includes an examination of the region by using demographic data. The neighborhood’s population increase, unemployment rate, employment market increase, wage standards, and even its median age hold important information for note buyers.
Mortgage note investors who like performing notes look for areas where a large number of younger people have good-paying jobs.

The same area may also be profitable for non-performing mortgage note investors and their exit plan. When foreclosure is necessary, the foreclosed property is more easily unloaded in a good property market.

Property Values

Mortgage lenders need to find as much equity in the collateral property as possible. If the investor has to foreclose on a loan without much equity, the foreclosure auction may not even pay back the balance invested in the note. As loan payments lessen the balance owed, and the value of the property increases, the homeowner’s equity grows.

Property Taxes

Escrows for property taxes are usually given to the lender simultaneously with the mortgage loan payment. That way, the lender makes certain that the taxes are taken care of when payable. The mortgage lender will need to make up the difference if the payments stop or the investor risks tax liens on the property. If a tax lien is put in place, it takes precedence over the mortgage lender’s loan.

If property taxes keep growing, the borrowers’ loan payments also keep rising. Borrowers who have trouble making their loan payments might drop farther behind and ultimately default.

Real Estate Market Strength

A vibrant real estate market having good value appreciation is helpful for all categories of note investors. It’s crucial to know that if you have to foreclose on a collateral, you won’t have trouble receiving an acceptable price for the collateral property.

A strong real estate market could also be a potential place for creating mortgage notes. For successful investors, this is a valuable part of their investment plan.

A REIT, or Real Estate Investment Trust, means a company that makes investments in income-producing real estate. Before REITs were created, real estate investing used to be too expensive for the majority of citizens. The typical investor is able to come up with the money to invest in a REIT.

Investing in a REIT is known as passive investing. Investment liability is spread across a portfolio of properties. Shares may be sold whenever it is convenient for the investor. However, REIT investors do not have the ability to choose specific assets or locations. Their investment is confined to the real estate properties chosen by their REIT.

Mutual funds that hold shares of real estate businesses are known as real estate investment funds. Any actual real estate is owned by the real estate companies rather than the fund. Investment funds are considered an inexpensive method to include real estate properties in your allotment of assets without avoidable risks. Fund members might not collect ordinary disbursements the way that REIT shareholders do. The profit to you is created by growth in the value of the stock.

You can select a fund that specializes in a specific type of real estate company, like residential, but you cannot propose the fund’s investment assets or locations. As passive investors, fund members are glad to let the management team of the fund handle all investment determinations.