Ultimate Moab Real Estate Investing Guide for 2024

BRRRR stands for “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a system for continuous growth. A crucial piece of this strategy is to be able to obtain a “cash-out” mortgage refinance.

You add to the worth of the property beyond the amount you spent purchasing and fixing the property. Then you borrow a cash-out refinance loan that is calculated on the higher market value, and you take out the balance. You use that capital to purchase another investment property and the operation begins anew. This program allows you to consistently grow your assets and your investment revenue.

If an investor owns a large collection of investment properties, it seems smart to pay a property manager and create a passive income source. Locate good Moab property management companies by looking through our directory.

Factors to Consider

Population Growth

The rise or deterioration of a community’s population is an accurate barometer of the region’s long-term desirability for rental property investors. If you find vibrant population expansion, you can be sure that the area is drawing likely renters to it. The region is appealing to businesses and employees to situate, work, and have families. This means dependable tenants, higher lease revenue, and more possible homebuyers when you intend to liquidate the asset.

Property Taxes

Real estate taxes, upkeep, and insurance spendings are investigated by long-term lease investors for calculating costs to assess if and how the investment strategy will be viable. Steep property taxes will negatively impact a property investor’s income. If property taxes are too high in a given market, you will want to look in another place.

Price to Rent Ratio

The price to rent ratio (p/r) is a clue to how high of a rent can be collected in comparison to the acquisition price of the asset. An investor can not pay a high price for an investment asset if they can only collect a low rent not enabling them to repay the investment in a appropriate time. A large price-to-rent ratio tells you that you can set lower rent in that location, a small p/r tells you that you can charge more.

Median Gross Rents

Median gross rents demonstrate whether a city’s lease market is robust. Median rents must be increasing to validate your investment. If rental rates are going down, you can drop that region from deliberation.

Median Population Age

Median population age should be nearly the age of a usual worker if a market has a good source of tenants. If people are resettling into the district, the median age will not have a problem remaining in the range of the workforce. When working-age people are not venturing into the market to follow retirees, the median age will rise. That is a poor long-term economic picture.

Employment Base Diversity

A varied employment base is what an intelligent long-term investor landlord will look for. When your renters are employed by a few dominant businesses, even a small disruption in their operations might cost you a lot of tenants and increase your risk tremendously.

Unemployment Rate

High unemployment means smaller amount of tenants and a weak housing market. Historically successful businesses lose customers when other businesses retrench workers. The still employed workers could find their own incomes marked down. This could result in delayed rents and tenant defaults.

Income Rates

Median household and per capita income will let you know if the tenants that you require are residing in the area. Improving wages also show you that rental prices can be adjusted throughout your ownership of the investment property.

Number of New Jobs Created

An expanding job market translates into a consistent pool of renters. A market that provides jobs also boosts the number of people who participate in the real estate market. This enables you to acquire additional lease assets and backfill current vacancies.

School Ratings

Local schools will have a strong effect on the real estate market in their area. Businesses that are considering moving require outstanding schools for their workers. Dependable tenants are the result of a steady job market. Property market values benefit with new employees who are buying houses. For long-term investing, be on the lookout for highly accredited schools in a prospective investment area.

Property Appreciation Rates

The basis of a long-term investment strategy is to hold the investment property. You need to make sure that the odds of your asset going up in value in that city are strong. Low or shrinking property appreciation rates will remove a community from your choices.

Residential real estate where renters live in furnished accommodations for less than thirty days are known as short-term rentals. The per-night rental prices are always higher in short-term rentals than in long-term units. Because of the increased number of renters, short-term rentals involve additional frequent repairs and cleaning.

Home sellers waiting to close on a new residence, vacationers, and individuals on a business trip who are staying in the community for about week prefer to rent apartments short term. Any property owner can turn their residence into a short-term rental with the services made available by virtual home-sharing portals like VRBO and AirBnB. This makes short-term rental strategy a convenient technique to endeavor residential property investing.

Short-term rental properties involve engaging with renters more frequently than long-term rental units. Because of this, landlords manage problems repeatedly. You might need to defend your legal liability by working with one of the good Moab real estate attorneys.

Factors to Consider

Short-Term Rental Income

Initially, find out the amount of rental revenue you must have to reach your anticipated profits. Learning about the usual amount of rent being charged in the city for short-term rentals will enable you to pick a preferable area to invest.

Median Property Prices

You also have to decide how much you can manage to invest. To check whether a location has possibilities for investment, investigate the median property prices. You can customize your property search by analyzing median values in the city’s sub-markets.

Price Per Square Foot

Price per sq ft gives a basic idea of market values when estimating comparable properties. When the styles of potential homes are very contrasting, the price per sq ft may not give a valid comparison. Price per sq ft may be a quick method to gauge multiple communities or properties.

Short-Term Rental Occupancy Rate

The need for more rental properties in a location can be determined by examining the short-term rental occupancy rate. If almost all of the rental properties are full, that community needs new rental space. When the rental occupancy rates are low, there isn’t much demand in the market and you need to search somewhere else.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a way to assess the profitability of an investment. Take your expected Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The percentage you get is your cash-on-cash return. When an investment is lucrative enough to repay the capital spent fast, you’ll get a high percentage. When you borrow a fraction of the investment and use less of your money, you will see a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This benchmark shows the comparability of investment property worth to its yearly income. A rental unit that has a high cap rate as well as charges average market rental rates has a high market value. If cap rates are low, you can assume to pay more money for real estate in that location. Divide your expected Net Operating Income (NOI) by the property’s value or asking price. The percentage you get is the property’s cap rate.

Local Attractions

Short-term tenants are commonly individuals who come to a region to attend a recurring major event or visit unique locations. Tourists go to specific communities to enjoy academic and sporting events at colleges and universities, see competitions, support their kids as they compete in fun events, party at annual carnivals, and stop by theme parks. Natural tourist sites such as mountains, lakes, beaches, and state and national nature reserves will also draw potential tenants.

To fix and flip real estate, you have to get it for lower than market price, complete any required repairs and updates, then liquidate it for higher market price. Your assessment of improvement costs has to be precise, and you have to be capable of buying the home for less than market price.

Explore the prices so that you know the accurate After Repair Value (ARV). The average number of Days On Market (DOM) for properties sold in the community is vital. To profitably “flip” a property, you have to resell the repaired home before you have to spend capital maintaining it.

To help motivated property sellers locate you, enter your business in our directories of real estate cash buyers in Moab UT and real estate investment firms in Moab UT.

Also, search for property bird dogs in Moab UT. Professionals located here will help you by rapidly finding potentially lucrative deals prior to the projects being sold.

Factors to Consider

Median Home Price

The region’s median housing price will help you determine a good city for flipping houses. You are seeking for median prices that are modest enough to reveal investment possibilities in the market. You need cheaper homes for a profitable fix and flip.

If you notice a sudden drop in real estate market values, this might mean that there are possibly properties in the area that will work for a short sale. You’ll learn about potential opportunities when you partner up with Moab short sale processors. Discover how this is done by reviewing our guide ⁠— How to Buy a Short Sale Home Fast.

Property Appreciation Rate

Are real estate market values in the area on the way up, or going down? You’re looking for a stable growth of the area’s home values. Accelerated price growth may suggest a value bubble that is not reliable. Buying at an inappropriate point in an unsteady market condition can be devastating.

Average Renovation Costs

You will need to analyze building expenses in any prospective investment market. The way that the municipality processes your application will affect your project as well. If you are required to have a stamped set of plans, you’ll have to include architect’s charges in your expenses.

Population Growth

Population information will show you if there is steady necessity for homes that you can supply. When there are purchasers for your fixed up homes, the statistics will show a robust population increase.

Median Population Age

The median citizens’ age will also show you if there are adequate homebuyers in the area. The median age better not be less or higher than the age of the typical worker. A high number of such people demonstrates a substantial pool of homebuyers. The goals of retired people will probably not be included your investment project plans.

Unemployment Rate

While evaluating a city for real estate investment, look for low unemployment rates. An unemployment rate that is lower than the country’s median is what you are looking for. If the area’s unemployment rate is lower than the state average, that’s a sign of a preferable investing environment. Unemployed people cannot acquire your property.

Income Rates

Median household and per capita income are a reliable indicator of the stability of the home-buying environment in the city. Most people who purchase a home have to have a home mortgage loan. To obtain approval for a mortgage loan, a home buyer cannot be spending for a house payment greater than a particular percentage of their wage. You can see from the area’s median income whether many individuals in the area can afford to purchase your homes. Search for cities where wages are rising. Construction costs and housing purchase prices increase from time to time, and you want to be sure that your potential homebuyers’ income will also get higher.

Number of New Jobs Created

The number of jobs created on a continual basis shows whether income and population growth are viable. A larger number of citizens buy homes when the local financial market is creating jobs. New jobs also attract workers relocating to the location from another district, which also reinforces the property market.

Hard Money Loan Rates

Fix-and-flip property investors normally use hard money loans in place of traditional financing. Doing this lets investors make desirable projects without delay. Find hard money companies in Moab UT and analyze their mortgage rates.

Those who aren’t knowledgeable in regard to hard money lenders can learn what they need to know with our detailed explanation for newbie investors — What Is Private Money?.

Wholesaling is a real estate investment strategy that entails scouting out houses that are interesting to investors and putting them under a purchase contract. When an investor who needs the property is spotted, the contract is sold to them for a fee. The real buyer then finalizes the purchase. The wholesaler does not sell the residential property — they sell the contract to purchase one.

The wholesaling method of investing includes the engagement of a title insurance company that comprehends wholesale purchases and is knowledgeable about and involved in double close purchases. Locate Moab title services for wholesale investors by using our directory.

Learn more about this strategy from our definitive guide — Real Estate Wholesaling 101. While you go about your wholesaling business, put your name in HouseCashin’s directory of Moab top home wholesalers. This will help your potential investor buyers discover and call you.

Factors to Consider

Median Home Prices

Median home values are essential to spotting markets where properties are selling in your investors’ price range. Below average median values are a solid indication that there are plenty of properties that could be acquired for lower than market worth, which real estate investors have to have.

A quick decline in the market value of real estate may cause the abrupt appearance of houses with more debt than value that are desired by wholesalers. Wholesaling short sale properties often carries a collection of different perks. But, be cognizant of the legal challenges. Discover details regarding wholesaling short sale properties with our extensive instructions. When you’ve chosen to try wholesaling short sale homes, be certain to hire someone on the list of the best short sale law firms in Moab UT and the best mortgage foreclosure attorneys in Moab UT to assist you.

Property Appreciation Rate

Median home purchase price fluctuations clearly illustrate the home value in the market. Investors who want to keep real estate investment properties will need to know that home purchase prices are regularly appreciating. Both long- and short-term investors will avoid an area where housing values are going down.

Population Growth

Population growth figures are something that real estate investors will analyze carefully. An expanding population will have to have new housing. There are a lot of people who lease and more than enough clients who purchase homes. When a population is not expanding, it doesn’t need additional residential units and investors will search in other locations.

Median Population Age

Investors need to be a part of a reliable real estate market where there is a good supply of tenants, newbie homeowners, and upwardly mobile locals buying more expensive properties. A place that has a large employment market has a constant pool of renters and purchasers. A location with these features will have a median population age that mirrors the employed adult’s age.

Income Rates

The median household and per capita income in a good real estate investment market have to be going up. Increases in rent and listing prices will be supported by growing income in the market. That will be crucial to the property investors you are trying to reach.

Unemployment Rate

The market’s unemployment stats will be a vital point to consider for any potential wholesale property buyer. Overdue rent payments and default rates are worse in communities with high unemployment. Long-term investors won’t take a property in a location like that. Investors can’t depend on renters moving up into their houses if unemployment rates are high. This makes it difficult to locate fix and flip real estate investors to close your contracts.

Number of New Jobs Created

The number of fresh jobs being produced in the region completes a real estate investor’s evaluation of a future investment site. New citizens relocate into a region that has additional job openings and they need a place to live. No matter if your buyer supply is comprised of long-term or short-term investors, they will be attracted to a city with consistent job opening creation.

Average Renovation Costs

Rehabilitation expenses have a large impact on a real estate investor’s profit. The price, plus the costs of repairs, should reach a sum that is lower than the After Repair Value (ARV) of the real estate to ensure profit. The less you can spend to rehab a property, the more lucrative the location is for your prospective purchase agreement clients.

Acquiring mortgage notes (loans) pays off when the mortgage loan can be purchased for less than the remaining balance. By doing this, the investor becomes the mortgage lender to the original lender’s client.

Performing notes mean mortgage loans where the borrower is consistently current on their payments. These loans are a repeating source of cash flow. Investors also invest in non-performing mortgage notes that they either restructure to help the client or foreclose on to buy the property below actual worth.

At some time, you might create a mortgage note portfolio and find yourself needing time to manage your loans by yourself. In this case, you can hire one of residential mortgage servicers in Moab UT that would basically turn your investment into passive cash flow.

When you find that this strategy is a good fit for you, insert your firm in our directory of Moab top mortgage note buying companies. Showing up on our list sets you in front of lenders who make profitable investment possibilities accessible to note investors such as yourself.

Factors to Consider

Foreclosure Rates

Low foreclosure rates are an indication that the market has investment possibilities for performing note buyers. If the foreclosure rates are high, the region might still be desirable for non-performing note buyers. However, foreclosure rates that are high may signal a slow real estate market where getting rid of a foreclosed unit may be a no easy task.

Foreclosure Laws

Note investors should know their state’s laws regarding foreclosure prior to pursuing this strategy. Some states use mortgage documents and some utilize Deeds of Trust. While using a mortgage, a court has to allow a foreclosure. You simply have to file a notice and proceed with foreclosure process if you’re working with a Deed of Trust.

Mortgage Interest Rates

The interest rate is determined in the mortgage notes that are purchased by note buyers. This is an important determinant in the returns that lenders reach. Interest rates influence the plans of both sorts of mortgage note investors.

Traditional interest rates may differ by up to a quarter of a percent throughout the country. Loans issued by private lenders are priced differently and may be higher than conventional mortgage loans.

Mortgage note investors ought to consistently know the prevailing market interest rates, private and traditional, in potential note investment markets.

Demographics

An area’s demographics data help note buyers to streamline their work and properly distribute their resources. It’s crucial to determine whether a sufficient number of people in the city will continue to have reliable jobs and incomes in the future.
Performing note buyers need borrowers who will pay as agreed, generating a stable income stream of loan payments.

The identical place may also be profitable for non-performing mortgage note investors and their exit plan. A resilient local economy is needed if they are to find buyers for properties on which they have foreclosed.

Property Values

As a mortgage note investor, you must search for deals with a cushion of equity. When the property value is not much more than the loan balance, and the lender has to start foreclosure, the collateral might not generate enough to repay the lender. The combination of mortgage loan payments that reduce the loan balance and yearly property value appreciation increases home equity.

Property Taxes

Escrows for property taxes are usually sent to the mortgage lender simultaneously with the loan payment. The lender pays the payments to the Government to ensure they are paid without delay. If mortgage loan payments are not being made, the mortgage lender will have to choose between paying the taxes themselves, or the property taxes become past due. When property taxes are past due, the government’s lien leapfrogs all other liens to the front of the line and is paid first.

If property taxes keep increasing, the homebuyer’s loan payments also keep growing. This makes it difficult for financially strapped borrowers to stay current, so the mortgage loan could become past due.

Real Estate Market Strength

Both performing and non-performing mortgage note investors can thrive in a strong real estate market. As foreclosure is a necessary component of mortgage note investment planning, appreciating real estate values are essential to discovering a good investment market.

Vibrant markets often generate opportunities for note buyers to make the first loan themselves. This is a good source of income for experienced investors.

A trust owning income-generating real estate and that sells shares to the public is a REIT — Real Estate Investment Trust. This was initially invented as a way to allow the regular person to invest in real estate. The typical person can afford to invest in a REIT.

Participants in these trusts are completely passive investors. REITs oversee investors’ risk with a diversified group of properties. Shares can be liquidated whenever it’s agreeable for the investor. Something you can’t do with REIT shares is to determine the investment real estate properties. You are restricted to the REIT’s collection of assets for investment.

A Real Estate Investment Fund is a mutual fund that holds stocks of real estate companies. Any actual real estate is possessed by the real estate firms rather than the fund. This is another method for passive investors to spread their portfolio with real estate avoiding the high entry-level investment or exposure. Real estate investment funds are not required to distribute dividends like a REIT. Like other stocks, investment funds’ values rise and go down with their share value.

You may select a fund that concentrates on a selected category of real estate you’re expert in, but you do not get to choose the geographical area of each real estate investment. As passive investors, fund members are glad to let the directors of the fund determine all investment selections.