Ultimate Lincoln County Real Estate Investing Guide for 2024

The acronym BRRRR is a description of a long-term investment plan — Buy, Rehab, Rent, Refinance, Repeat. BRRRR is a plan for continuous expansion. This strategy hinges on your ability to remove money out when you refinance.

When you are done with rehabbing the rental, the value must be higher than your total purchase and fix-up costs. Then you borrow a cash-out mortgage refinance loan that is calculated on the larger property worth, and you pocket the balance. You purchase your next investment property with the cash-out capital and start anew. You add appreciating investment assets to your portfolio and rental revenue to your cash flow.

Once you’ve built a large collection of income generating properties, you can decide to allow someone else to oversee your rental business while you get recurring income. Locate the best property management companies in Lincoln County NE by browsing our list.

Factors to Consider

Population Growth

Population increase or contraction tells you if you can depend on strong returns from long-term property investments. If you find good population growth, you can be certain that the community is pulling potential renters to it. Moving employers are attracted to growing locations giving reliable jobs to families who relocate there. A growing population constructs a stable base of tenants who will handle rent increases, and a robust seller’s market if you need to unload any investment assets.

Property Taxes

Property taxes, ongoing maintenance expenditures, and insurance directly decrease your profitability. Unreasonable payments in these areas threaten your investment’s returns. Unreasonable property tax rates may show a fluctuating area where costs can continue to expand and must be considered a red flag.

Price to Rent Ratio

Price to rent ratio (p/r) is a market indicator that shows you the amount you can plan to collect for rent. If median property prices are steep and median rents are low — a high p/r, it will take longer for an investment to recoup your costs and attain good returns. You are trying to see a low p/r to be confident that you can set your rental rates high enough to reach good profits.

Median Gross Rents

Median gross rents signal whether a site’s rental market is strong. Median rents should be growing to validate your investment. Reducing rental rates are a red flag to long-term rental investors.

Median Population Age

The median residents’ age that you are on the hunt for in a favorable investment market will be approximate to the age of waged people. If people are relocating into the district, the median age will have no problem staying in the range of the employment base. If you find a high median age, your source of tenants is reducing. A vibrant economy can’t be maintained by retired individuals.

Employment Base Diversity

Having a variety of employers in the city makes the economy not as volatile. When the area’s workers, who are your tenants, are employed by a varied combination of companies, you cannot lose all of them at the same time (as well as your property’s value), if a major employer in town goes bankrupt.

Unemployment Rate

It’s a challenge to have a sound rental market when there is high unemployment. Historically successful businesses lose customers when other businesses lay off employees. People who still keep their jobs may discover their hours and salaries reduced. This could cause late rents and renter defaults.

Income Rates

Median household and per capita income will demonstrate if the tenants that you want are residing in the location. Historical wage statistics will reveal to you if income growth will permit you to hike rental rates to reach your profit calculations.

Number of New Jobs Created

The vibrant economy that you are hunting for will be creating a high number of jobs on a consistent basis. The employees who are employed for the new jobs will have to have housing. Your objective of renting and purchasing more real estate needs an economy that will generate new jobs.

School Ratings

School quality in the area will have a strong influence on the local residential market. Businesses that are thinking about relocating want superior schools for their employees. Business relocation creates more renters. Real estate prices gain with new employees who are buying homes. You will not find a vibrantly soaring residential real estate market without reputable schools.

Property Appreciation Rates

The essence of a long-term investment strategy is to hold the asset. You have to be assured that your real estate assets will grow in price until you need to liquidate them. You do not want to allot any time looking at communities showing low property appreciation rates.

A short-term rental is a furnished residence where a renter lives for shorter than one month. The nightly rental prices are typically higher in short-term rentals than in long-term ones. With tenants fast turnaround, short-term rental units need to be maintained and sanitized on a continual basis.

Average short-term tenants are tourists, home sellers who are relocating, and corporate travelers who prefer a more homey place than hotel accommodation. Ordinary property owners can rent their houses or condominiums on a short-term basis through sites like AirBnB and VRBO. Short-term rentals are viewed to be a good technique to kick off investing in real estate.

Short-term rentals require interacting with occupants more often than long-term ones. That means that property owners handle disputes more often. You may need to protect your legal liability by working with one of the best Lincoln County real estate law firms.

Factors to Consider

Short-Term Rental Income

You need to calculate how much income needs to be earned to make your investment lucrative. Learning about the standard rate of rent being charged in the city for short-term rentals will allow you to choose a preferable area to invest.

Median Property Prices

You also must know the amount you can spare to invest. The median price of property will show you whether you can manage to participate in that location. You can calibrate your community survey by studying the median market worth in particular neighborhoods.

Price Per Square Foot

Price per square foot gives a broad idea of market values when analyzing comparable properties. If you are comparing the same types of property, like condos or detached single-family homes, the price per square foot is more reliable. You can use the price per square foot information to see a good general view of property values.

Short-Term Rental Occupancy Rate

A quick check on the location’s short-term rental occupancy levels will tell you whether there is an opportunity in the district for more short-term rentals. A high occupancy rate shows that an extra source of short-term rental space is wanted. If landlords in the community are having issues filling their existing properties, you will have difficulty filling yours.

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. High cash-on-cash return demonstrates that you will get back your capital more quickly and the investment will earn more profit. Sponsored purchases will reap better cash-on-cash returns because you’re spending less of your own money.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) rates are commonly utilized by real property investors to assess the value of rental units. An investment property that has a high cap rate as well as charging typical market rental rates has a strong value. Low cap rates reflect higher-priced rental units. Divide your projected Net Operating Income (NOI) by the property’s value or listing price. The answer is the annual return in a percentage.

Local Attractions

Short-term rental apartments are desirable in places where visitors are drawn by events and entertainment venues. If a community has sites that annually produce exciting events, like sports coliseums, universities or colleges, entertainment halls, and adventure parks, it can invite visitors from other areas on a regular basis. Natural tourist spots like mountains, lakes, coastal areas, and state and national parks can also attract potential tenants.

When a real estate investor acquires a property under market value, renovates it so that it becomes more valuable, and then resells the property for revenue, they are referred to as a fix and flip investor. Your estimate of improvement expenses must be on target, and you should be capable of acquiring the unit for less than market price.

It is important for you to understand what properties are being sold for in the market. The average number of Days On Market (DOM) for homes listed in the area is crucial. Selling the home without delay will keep your costs low and guarantee your profitability.

To help motivated residence sellers discover you, place your firm in our lists of cash house buyers in Lincoln County NE and real estate investing companies in Lincoln County NE.

Also, coordinate with Lincoln County real estate bird dogs. Specialists in our catalogue concentrate on procuring distressed property investment opportunities while they’re still off the market.

Factors to Consider

Median Home Price

When you search for a suitable area for property flipping, investigate the median house price in the city. When values are high, there might not be a stable source of run down homes available. This is a crucial component of a profitable fix and flip.

When your review shows a rapid decrease in housing market worth, it might be a heads up that you will find real estate that fits the short sale requirements. You will receive notifications about these possibilities by working with short sale negotiation companies in Lincoln County NE. Find out how this happens by studying our article ⁠— What Does Buying a Short Sale Home Mean?.

Property Appreciation Rate

Are home values in the region moving up, or on the way down? You have to have a city where real estate market values are steadily and continuously moving up. Speedy property value growth can reflect a market value bubble that is not sustainable. When you are buying and selling swiftly, an unstable market can sabotage your investment.

Average Renovation Costs

Look thoroughly at the possible rehab spendings so you will find out if you can achieve your goals. The manner in which the local government processes your application will have an effect on your venture too. You have to know whether you will be required to hire other experts, such as architects or engineers, so you can get ready for those spendings.

Population Growth

Population increase metrics provide a peek at housing demand in the area. When there are buyers for your repaired houses, the statistics will demonstrate a positive population growth.

Median Population Age

The median citizens’ age is a factor that you might not have taken into consideration. The median age in the market should be the one of the regular worker. These can be the individuals who are possible homebuyers. The demands of retirees will probably not be a part of your investment project strategy.

Unemployment Rate

You want to see a low unemployment rate in your target location. An unemployment rate that is lower than the nation’s average is good. A positively reliable investment area will have an unemployment rate less than the state’s average. Non-working individuals can’t acquire your property.

Income Rates

Median household and per capita income amounts advise you whether you will obtain enough buyers in that location for your residential properties. Most homebuyers have to borrow money to purchase real estate. The borrower’s salary will dictate the amount they can afford and if they can buy a house. Median income will help you analyze if the typical home purchaser can buy the houses you intend to put up for sale. You also need to see wages that are growing consistently. If you want to raise the price of your houses, you want to be sure that your customers’ wages are also rising.

Number of New Jobs Created

The number of jobs created on a steady basis indicates if salary and population increase are feasible. A larger number of people buy homes when the local economy is creating jobs. Fresh jobs also draw workers arriving to the city from another district, which further strengthens the property market.

Hard Money Loan Rates

Investors who buy, rehab, and sell investment real estate prefer to enlist hard money and not traditional real estate loans. This strategy lets them negotiate desirable deals without hindrance. Locate the best private money lenders in Lincoln County NE so you can review their fees.

Someone who wants to learn about hard money funding options can learn what they are and the way to employ them by studying our guide titled What Is Hard Money Lending for Real Estate?.

In real estate wholesaling, you find a house that real estate investors would count as a lucrative deal and enter into a purchase contract to buy the property. When a real estate investor who wants the residential property is spotted, the sale and purchase agreement is sold to them for a fee. The seller sells the house to the real estate investor instead of the wholesaler. You are selling the rights to the purchase contract, not the home itself.

Wholesaling depends on the participation of a title insurance firm that’s comfortable with assigned real estate sale agreements and comprehends how to proceed with a double closing. Look for title companies for wholesalers in Lincoln County NE in our directory.

Our comprehensive guide to wholesaling can be viewed here: Property Wholesaling Explained. When using this investment strategy, list your company in our directory of the best property wholesalers in Lincoln County NE. That way your prospective audience will know about your location and reach out to you.

Factors to Consider

Median Home Prices

Median home values in the community will show you if your preferred purchase price level is achievable in that city. An area that has a good pool of the below-market-value properties that your investors require will show a lower median home price.

Accelerated worsening in real property market worth could lead to a lot of properties with no equity that appeal to short sale investors. Wholesaling short sale homes often carries a number of uncommon advantages. Nevertheless, there might be risks as well. Discover more concerning wholesaling a short sale property from our comprehensive instructions. When you’ve chosen to attempt wholesaling these properties, be sure to hire someone on the list of the best short sale law firms in Lincoln County NE and the best foreclosure attorneys in Lincoln County NE to advise you.

Property Appreciation Rate

Median home purchase price trends are also important. Some real estate investors, including buy and hold and long-term rental landlords, particularly need to know that home values in the area are going up steadily. A weakening median home value will show a weak leasing and housing market and will turn off all kinds of real estate investors.

Population Growth

Population growth stats are something that real estate investors will look at carefully. A growing population will have to have more housing. Investors understand that this will include both rental and purchased housing units. If a community isn’t growing, it doesn’t require new houses and investors will invest somewhere else.

Median Population Age

A profitable residential real estate market for investors is agile in all areas, notably tenants, who evolve into homeowners, who move up into bigger houses. This takes a robust, reliable labor pool of citizens who feel confident to shift up in the residential market. If the median population age matches the age of working locals, it demonstrates a robust housing market.

Income Rates

The median household and per capita income in a good real estate investment market have to be on the upswing. Income hike proves a city that can keep up with rental rate and housing price surge. That will be important to the investors you want to attract.

Unemployment Rate

Real estate investors whom you offer to buy your contracts will consider unemployment rates to be an essential piece of insight. Late lease payments and lease default rates are widespread in locations with high unemployment. Long-term real estate investors will not take real estate in a location like this. High unemployment causes unease that will keep people from buying a home. This makes it hard to locate fix and flip investors to take on your purchase agreements.

Number of New Jobs Created

The frequency of jobs created yearly is a vital component of the housing picture. More jobs appearing draw plenty of workers who look for houses to lease and purchase. Employment generation is advantageous for both short-term and long-term real estate investors whom you depend on to buy your contracts.

Average Renovation Costs

Rehabilitation spendings have a strong impact on a flipper’s returns. The price, plus the expenses for rehabbing, must total to less than the After Repair Value (ARV) of the property to create profit. Lower average repair spendings make a market more desirable for your main clients — rehabbers and other real estate investors.

Note investment professionals obtain debt from lenders when the investor can obtain it below face value. By doing this, the investor becomes the mortgage lender to the initial lender’s debtor.

Performing notes are loans where the debtor is always current on their mortgage payments. They earn you stable passive income. Some mortgage note investors want non-performing notes because if the mortgage note investor can’t satisfactorily rework the loan, they can always obtain the collateral at foreclosure for a low price.

At some point, you might accrue a mortgage note portfolio and start lacking time to manage your loans by yourself. In this case, you can enlist one of note servicing companies in Lincoln County NE that would essentially convert your portfolio into passive cash flow.

When you choose to try this investment method, you ought to put your business in our directory of the best real estate note buyers in Lincoln County NE. Joining will help you become more visible to lenders providing profitable opportunities to note investors like you.

Factors to consider

Foreclosure Rates

Investors looking for valuable mortgage loans to purchase will want to see low foreclosure rates in the area. Non-performing mortgage note investors can cautiously make use of places with high foreclosure rates as well. If high foreclosure rates have caused an underperforming real estate environment, it could be challenging to resell the collateral property after you seize it through foreclosure.

Foreclosure Laws

Mortgage note investors want to know the state’s laws regarding foreclosure prior to buying notes. Many states use mortgage documents and some require Deeds of Trust. Lenders might have to get the court’s permission to foreclose on real estate. A Deed of Trust permits the lender to file a notice and continue to foreclosure.

Mortgage Interest Rates

Note investors acquire the interest rate of the mortgage loan notes that they purchase. Your mortgage note investment return will be influenced by the mortgage interest rate. Interest rates are critical to both performing and non-performing note buyers.

Traditional interest rates can vary by up to a 0.25% throughout the US. Private loan rates can be a little higher than conventional interest rates considering the greater risk accepted by private lenders.

A mortgage loan note investor needs to know the private and traditional mortgage loan rates in their communities all the time.

Demographics

If mortgage note buyers are determining where to invest, they look closely at the demographic dynamics from likely markets. It’s crucial to determine whether an adequate number of residents in the market will continue to have reliable employment and wages in the future.
Performing note buyers seek borrowers who will pay without delay, generating a repeating revenue flow of loan payments.

The same market could also be advantageous for non-performing note investors and their exit plan. If non-performing note investors want to foreclose, they’ll need a strong real estate market to unload the repossessed property.

Property Values

Note holders want to find as much equity in the collateral as possible. If the property value is not higher than the mortgage loan amount, and the mortgage lender decides to start foreclosure, the home might not realize enough to payoff the loan. As loan payments decrease the balance owed, and the value of the property appreciates, the homeowner’s equity increases.

Property Taxes

Most homeowners pay real estate taxes to mortgage lenders in monthly installments while sending their loan payments. By the time the taxes are payable, there needs to be adequate payments being held to take care of them. If the borrower stops performing, unless the loan owner takes care of the taxes, they won’t be paid on time. When taxes are delinquent, the municipality’s lien jumps over all other liens to the head of the line and is taken care of first.

If a community has a history of increasing property tax rates, the combined house payments in that area are consistently increasing. Borrowers who are having a hard time handling their mortgage payments could drop farther behind and ultimately default.

Real Estate Market Strength

A region with growing property values promises good potential for any note investor. Since foreclosure is a necessary component of note investment strategy, growing property values are essential to locating a strong investment market.

A growing real estate market could also be a good environment for making mortgage notes. This is a strong stream of income for experienced investors.

A trust owning income-generating real estate and that sells shares to people is a REIT — Real Estate Investment Trust. Before REITs were invented, investing in properties was considered too pricey for many people. The typical investor is able to come up with the money to invest in a REIT.

REIT investing is classified as passive investing. Investment risk is spread throughout a group of investment properties. Shares in a REIT may be liquidated when it’s convenient for you. One thing you can’t do with REIT shares is to determine the investment assets. You are restricted to the REIT’s collection of properties for investment.

Real estate investment funds are essentially mutual funds focusing on real estate firms, such as REITs. Any actual real estate property is possessed by the real estate companies, not the fund. This is another method for passive investors to allocate their investments with real estate avoiding the high startup cost or risks. Real estate investment funds aren’t required to pay dividends unlike a REIT. The value of a fund to an investor is the projected appreciation of the value of the fund’s shares.

You can locate a fund that specializes in a specific kind of real estate company, like residential, but you can’t propose the fund’s investment properties or locations. You must depend on the fund’s managers to choose which locations and properties are chosen for investment.