Ultimate Logan Real Estate Investing Guide for 2024

The acronym BRRRR is an illustration of a long-term investment plan — Buy, Rehab, Rent, Refinance, Repeat. BRRRR is a plan for repeated growth. It is critical that you are qualified to do a “cash-out” refinance for the method to work.

You enhance the worth of the asset beyond the amount you spent buying and rehabbing it. After that, you extract the equity you generated out of the asset in a “cash-out” refinance. You use that capital to acquire another asset and the process begins anew. This program assists you to repeatedly enhance your portfolio and your investment revenue.

If your investment property collection is big enough, you can outsource its management and generate passive income. Find Logan investment property management firms when you go through our directory of professionals.

Factors to Consider

Population Growth

The increase or decline of the population can indicate if that market is interesting to landlords. An expanding population often signals ongoing relocation which equals new renters. Businesses think of this community as promising region to situate their company, and for workers to situate their households. Growing populations grow a strong tenant pool that can handle rent raises and home purchasers who help keep your property values up.

Property Taxes

Property taxes, similarly to insurance and upkeep spendings, may be different from market to market and have to be looked at carefully when predicting potential profits. Unreasonable real estate taxes will negatively impact a property investor’s income. If property tax rates are too high in a specific location, you will prefer to search in another place.

Price to Rent Ratio

Price to rent ratio (p/r) is a market indicator that shows you how much you can expect to collect for rent. If median property prices are steep and median rents are weak — a high p/r — it will take longer for an investment to repay your costs and achieve good returns. You are trying to discover a lower p/r to be confident that you can price your rental rates high enough for acceptable returns.

Median Gross Rents

Median gross rents signal whether a location’s lease market is solid. You are trying to discover a community with repeating median rent increases. You will not be able to reach your investment predictions in a region where median gross rental rates are shrinking.

Median Population Age

Median population age in a strong long-term investment environment should show the normal worker’s age. If people are resettling into the neighborhood, the median age will have no challenge remaining at the level of the workforce. If you discover a high median age, your source of renters is declining. An active real estate market cannot be sustained by retired people.

Employment Base Diversity

A greater number of businesses in the city will increase your prospects for success. When the area’s working individuals, who are your renters, are employed by a diverse number of businesses, you can’t lose all of them at once (and your property’s market worth), if a dominant company in town goes out of business.

Unemployment Rate

It is difficult to maintain a sound rental market when there is high unemployment. Out-of-job citizens can’t be customers of yours and of related businesses, which causes a ripple effect throughout the community. This can create too many layoffs or shorter work hours in the city. Even renters who are employed may find it hard to stay current with their rent.

Income Rates

Median household and per capita income will reflect if the tenants that you are looking for are living in the community. Your investment budget will include rental fees and property appreciation, which will depend on salary raise in the city.

Number of New Jobs Created

A growing job market produces a consistent pool of tenants. A higher number of jobs equal new renters. This enables you to purchase additional lease properties and replenish existing unoccupied properties.

School Ratings

Local schools can have a huge impact on the property market in their neighborhood. Well-endorsed schools are a requirement of businesses that are looking to relocate. Business relocation produces more tenants. Property market values benefit with new employees who are buying homes. Superior schools are an essential component for a robust real estate investment market.

Property Appreciation Rates

The basis of a long-term investment approach is to keep the asset. Investing in assets that you plan to hold without being sure that they will increase in price is a recipe for failure. You don’t need to spend any time inspecting communities showing unsatisfactory property appreciation rates.

Residential real estate where renters live in furnished units for less than a month are referred to as short-term rentals. Long-term rental units, such as apartments, charge lower rental rates a night than short-term ones. With tenants moving from one place to the next, short-term rental units have to be maintained and cleaned on a regular basis.

Short-term rentals serve business travelers who are in town for a couple of days, those who are moving and want temporary housing, and vacationers. Ordinary property owners can rent their homes on a short-term basis via websites like AirBnB and VRBO. This makes short-term rentals a good technique to try residential property investing.

The short-term rental housing venture includes dealing with renters more frequently in comparison with annual lease units. This means that landlords deal with disputes more frequently. Give some thought to handling your exposure with the help of one of the top real estate lawyers in Logan KS.

Factors to Consider

Short-Term Rental Income

You must decide how much rental income needs to be created to make your effort successful. A quick look at a market’s current standard short-term rental prices will show you if that is a good location for your investment.

Median Property Prices

When acquiring investment housing for short-term rentals, you need to determine the budget you can allot. The median market worth of real estate will tell you if you can manage to be in that city. You can tailor your property hunt by estimating median prices in the region’s sub-markets.

Price Per Square Foot

Price per square foot could be misleading if you are comparing different units. If you are looking at the same kinds of real estate, like condos or detached single-family homes, the price per square foot is more reliable. You can use the price per square foot criterion to obtain a good broad picture of real estate values.

Short-Term Rental Occupancy Rate

The percentage of short-term rentals that are currently rented in an area is important data for a landlord. A community that demands additional rental properties will have a high occupancy rate. If the rental occupancy rates are low, there isn’t much place in the market and you should explore somewhere else.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will inform you if the purchase is a good use of your cash. Take your projected Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The result is shown as a percentage. The higher the percentage, the sooner your investment will be repaid and you will start realizing profits. Financed projects will have a higher cash-on-cash return because you are investing less of your money.

Average Short-Term Rental Capitalization (Cap) Rates

This criterion shows the comparability of rental property worth to its yearly return. A rental unit that has a high cap rate as well as charges average market rents has a high market value. If cap rates are low, you can prepare to spend more for investment properties in that market. Divide your estimated Net Operating Income (NOI) by the property’s market value or listing price. The percentage you will receive is the property’s cap rate.

Local Attractions

Short-term tenants are commonly tourists who visit a region to enjoy a yearly major event or visit tourist destinations. This includes professional sporting events, children’s sports activities, colleges and universities, big auditoriums and arenas, fairs, and theme parks. Natural scenic spots like mountainous areas, lakes, beaches, and state and national nature reserves will also draw future renters.

The fix and flip approach requires buying a property that needs repairs or restoration, generating added value by enhancing the property, and then liquidating it for a higher market worth. The secrets to a profitable investment are to pay a lower price for the property than its current market value and to precisely compute the cost to make it marketable.

You also have to evaluate the housing market where the home is located. Locate a city that has a low average Days On Market (DOM) indicator. Liquidating real estate without delay will keep your costs low and guarantee your returns.

In order that real estate owners who have to get cash for their house can effortlessly find you, promote your status by using our catalogue of the best property cash buyers in Logan KS along with top real estate investors in Logan KS.

In addition, team up with Logan property bird dogs. Professionals in our directory concentrate on procuring desirable investment opportunities while they are still under the radar.

Factors to Consider

Median Home Price

The location’s median home value will help you find a good neighborhood for flipping houses. When values are high, there might not be a stable source of fixer-upper houses in the area. This is a basic element of a fix and flip market.

When your examination entails a sudden drop in home values, it may be a heads up that you will uncover real property that meets the short sale requirements. You’ll find out about possible opportunities when you partner up with Logan short sale negotiators. You’ll discover more information about short sales in our article ⁠— How Can I Buy a Short Sale Home?.

Property Appreciation Rate

The shifts in real property prices in a region are critical. You are searching for a consistent increase of the city’s home market values. Erratic price changes aren’t desirable, even if it’s a substantial and sudden surge. Buying at an inconvenient time in an unreliable environment can be catastrophic.

Average Renovation Costs

A thorough study of the market’s renovation expenses will make a significant influence on your location selection. The time it requires for getting permits and the local government’s rules for a permit application will also influence your plans. You want to be aware if you will need to hire other contractors, such as architects or engineers, so you can be ready for those costs.

Population Growth

Population increase statistics let you take a look at housing demand in the region. If the population isn’t expanding, there isn’t going to be an ample pool of purchasers for your real estate.

Median Population Age

The median citizens’ age can also tell you if there are qualified home purchasers in the location. The median age in the city needs to equal the age of the average worker. People in the area’s workforce are the most stable house purchasers. Individuals who are about to leave the workforce or have already retired have very particular housing requirements.

Unemployment Rate

If you see a community demonstrating a low unemployment rate, it’s a good indicator of lucrative investment prospects. It must always be less than the country’s average. If it’s also lower than the state average, that’s even more attractive. Jobless individuals won’t be able to buy your property.

Income Rates

Median household and per capita income are a reliable gauge of the stability of the home-purchasing market in the community. The majority of individuals who purchase a home have to have a home mortgage loan. To get a mortgage loan, a borrower should not be using for housing more than a certain percentage of their salary. You can determine based on the region’s median income if enough people in the community can afford to buy your real estate. You also need to see wages that are expanding consistently. To keep up with inflation and increasing building and supply expenses, you should be able to periodically mark up your purchase rates.

Number of New Jobs Created

Finding out how many jobs appear per year in the community adds to your assurance in a community’s investing environment. An expanding job market means that a higher number of prospective home buyers are receptive to buying a house there. Qualified skilled professionals looking into buying real estate and deciding to settle choose moving to cities where they will not be out of work.

Hard Money Loan Rates

Those who purchase, fix, and sell investment real estate like to engage hard money instead of conventional real estate financing. This enables investors to quickly purchase desirable real property. Review Logan hard money companies and look at lenders’ charges.

In case you are unfamiliar with this loan product, understand more by studying our article — Hard Money Loans Guide for Real Estate Investors.

Wholesaling is a real estate investment strategy that entails locating homes that are desirable to investors and putting them under a purchase contract. When an investor who approves of the property is found, the purchase contract is assigned to the buyer for a fee. The property under contract is bought by the investor, not the real estate wholesaler. The real estate wholesaler does not sell the property itself — they only sell the rights to buy it.

Wholesaling relies on the assistance of a title insurance company that is comfortable with assigning purchase contracts and understands how to work with a double closing. Discover real estate investor friendly title companies in Logan KS on our list.

To learn how wholesaling works, look through our detailed article What Is Wholesaling in Real Estate Investing?. While you manage your wholesaling activities, put your firm in HouseCashin’s directory of Logan top investment property wholesalers. That will help any possible customers to locate you and get in touch.

Factors to Consider

Median Home Prices

Median home values in the community will inform you if your required purchase price point is achievable in that market. Since real estate investors prefer investment properties that are available for lower than market price, you will want to find below-than-average median purchase prices as an implied hint on the potential availability of houses that you may buy for below market price.

Accelerated deterioration in property values might lead to a supply of properties with no equity that appeal to short sale investors. Wholesaling short sale houses repeatedly carries a list of uncommon perks. Nonetheless, be aware of the legal risks. Obtain more details on how to wholesale a short sale with our exhaustive article. When you have resolved to try wholesaling these properties, be sure to engage someone on the directory of the best short sale lawyers in Logan KS and the best mortgage foreclosure attorneys in Logan KS to assist you.

Property Appreciation Rate

Median home value trends are also important. Many real estate investors, including buy and hold and long-term rental investors, specifically need to find that residential property market values in the city are expanding over time. A weakening median home value will show a vulnerable rental and housing market and will eliminate all sorts of real estate investors.

Population Growth

Population growth statistics are an indicator that investors will look at carefully. If they see that the community is growing, they will presume that additional residential units are required. This combines both leased and resale real estate. A location that has a dropping population does not attract the investors you require to buy your contracts.

Median Population Age

A vibrant housing market requires people who are initially renting, then moving into homebuyers, and then moving up in the residential market. For this to happen, there needs to be a stable employment market of prospective tenants and homeowners. If the median population age is equivalent to the age of wage-earning people, it illustrates a dynamic property market.

Income Rates

The median household and per capita income in a robust real estate investment market have to be increasing. Surges in lease and listing prices will be aided by growing salaries in the area. That will be important to the property investors you are trying to draw.

Unemployment Rate

Investors will take into consideration the community’s unemployment rate. High unemployment rate prompts a lot of renters to delay rental payments or default entirely. This upsets long-term real estate investors who want to rent their real estate. High unemployment builds uncertainty that will keep people from purchasing a property. This is a concern for short-term investors buying wholesalers’ contracts to renovate and flip a property.

Number of New Jobs Created

Understanding how frequently new jobs are created in the region can help you determine if the house is located in a stable housing market. Fresh jobs produced attract plenty of workers who need properties to lease and buy. This is helpful for both short-term and long-term real estate investors whom you rely on to purchase your wholesale real estate.

Average Renovation Costs

An indispensable factor for your client investors, especially house flippers, are renovation expenses in the area. Short-term investors, like home flippers, can’t reach profitability if the purchase price and the rehab costs equal to more money than the After Repair Value (ARV) of the house. Give preference to lower average renovation costs.

Mortgage note investors obtain a loan from lenders when they can obtain the loan for a lower price than face value. By doing this, the investor becomes the lender to the initial lender’s borrower.

Performing notes mean mortgage loans where the homeowner is always on time with their loan payments. These notes are a stable generator of cash flow. Some mortgage investors want non-performing notes because if he or she can’t successfully re-negotiate the loan, they can always purchase the collateral at foreclosure for a low amount.

Ultimately, you could have multiple mortgage notes and require more time to service them without help. In this case, you can hire one of mortgage servicing companies in Logan KS that would basically turn your investment into passive income.

If you want to try this investment model, you ought to place your project in our list of the best mortgage note buyers in Logan KS. Joining will make you more noticeable to lenders providing lucrative opportunities to note investors like yourself.

Factors to Consider

Foreclosure Rates

Performing note purchasers are on lookout for markets showing low foreclosure rates. If the foreclosures are frequent, the area could still be desirable for non-performing note buyers. However, foreclosure rates that are high often indicate an anemic real estate market where liquidating a foreclosed unit will likely be challenging.

Foreclosure Laws

It is important for note investors to understand the foreclosure regulations in their state. Many states require mortgage paperwork and some require Deeds of Trust. Lenders may have to obtain the court’s okay to foreclose on a home. Lenders don’t have to have the court’s approval with a Deed of Trust.

Mortgage Interest Rates

Note investors take over the interest rate of the mortgage loan notes that they acquire. This is an important factor in the investment returns that lenders earn. Interest rates impact the plans of both kinds of mortgage note investors.

Conventional interest rates may be different by as much as a quarter of a percent across the country. Mortgage loans issued by private lenders are priced differently and can be higher than conventional mortgages.

Successful investors routinely search the interest rates in their community offered by private and traditional mortgage firms.

Demographics

A successful mortgage note investment plan uses an examination of the market by utilizing demographic data. It is crucial to find out whether a sufficient number of people in the market will continue to have reliable employment and incomes in the future.
Investors who specialize in performing notes look for markets where a large number of younger residents maintain higher-income jobs.

The identical region could also be profitable for non-performing mortgage note investors and their exit plan. If non-performing note investors have to foreclose, they will require a stable real estate market when they liquidate the defaulted property.

Property Values

As a mortgage note buyer, you must search for deals with a cushion of equity. This improves the likelihood that a potential foreclosure auction will make the lender whole. Appreciating property values help improve the equity in the house as the homeowner lessens the amount owed.

Property Taxes

Usually borrowers pay property taxes through mortgage lenders in monthly portions when they make their loan payments. So the mortgage lender makes sure that the property taxes are taken care of when payable. If the borrower stops paying, unless the loan owner remits the property taxes, they will not be paid on time. If a tax lien is filed, the lien takes first position over the mortgage lender’s loan.

Since property tax escrows are collected with the mortgage payment, rising property taxes indicate larger mortgage payments. Homeowners who are having a hard time making their loan payments may fall farther behind and eventually default.

Real Estate Market Strength

A community with growing property values has strong potential for any note investor. It’s good to know that if you are required to foreclose on a property, you will not have difficulty receiving an appropriate price for it.

Strong markets often show opportunities for note buyers to make the initial loan themselves. For veteran investors, this is a valuable part of their business strategy.

Many real estate investment businesses are structured as a trust called Real Estate Investment Trusts or REITs. Before REITs existed, investing in properties used to be too expensive for many people. Shares in REITs are affordable for most investors.

Shareholders in these trusts are completely passive investors. REITs manage investors’ exposure with a diversified collection of assets. Investors can unload their REIT shares whenever they need. Shareholders in a REIT are not able to recommend or select real estate properties for investment. You are confined to the REIT’s portfolio of properties for investment.

A Real Estate Investment Fund is a mutual fund that owns stocks of real estate companies. Any actual real estate property is possessed by the real estate companies, not the fund. This is another method for passive investors to diversify their portfolio with real estate without the high initial cost or risks. Whereas REITs are meant to disburse dividends to its members, funds do not. Like other stocks, investment funds’ values grow and fall with their share price.

You can locate a fund that focuses on a distinct type of real estate business, such as multifamily, but you can’t choose the fund’s investment assets or locations. Your choice as an investor is to select a fund that you trust to supervise your real estate investments.