Ultimate Morgantown Real Estate Investing Guide for 2024

A long-term wealth growing system that includes Buying a property, Renovating, Renting, Refinancing it, and Repeating the procedure by spending the money from the refinance is called BRRRR. This is a strategy to expand your investment portfolio not just buy one rental property. This strategy rests on your ability to withdraw money out when you refinance.

You enhance the value of the asset above the amount you spent acquiring and fixing the property. Next, you pocket the value you generated from the property in a “cash-out” mortgage refinance. You use that cash to get an additional investment property and the operation starts again. You add improving investment assets to your portfolio and lease income to your cash flow.

When an investor holds a large collection of investment homes, it is wise to pay a property manager and establish a passive income source. Discover Morgantown property management firms when you go through our directory of experts.

Factors to Consider

Population Growth

The growth or fall of a community’s population is an accurate benchmark of its long-term attractiveness for rental property investors. A growing population usually demonstrates ongoing relocation which translates to additional renters. Moving companies are attracted to rising regions offering secure jobs to people who move there. Increasing populations develop a strong renter reserve that can afford rent growth and home purchasers who assist in keeping your investment asset values up.

Property Taxes

Property taxes, ongoing maintenance expenses, and insurance specifically affect your bottom line. Unreasonable expenditures in these categories threaten your investment’s profitability. Regions with excessive property taxes are not a stable situation for short- or long-term investment and should be bypassed.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property prices and median rental rates that will signal how high of a rent the market can handle. The price you can charge in a community will define the sum you are able to pay depending on the number of years it will take to repay those funds. A high price-to-rent ratio informs you that you can demand modest rent in that market, a low ratio says that you can collect more.

Median Gross Rents

Median gross rents are a specific yardstick of the desirability of a lease market under discussion. Median rents must be going up to warrant your investment. If rental rates are shrinking, you can eliminate that city from consideration.

Median Population Age

The median citizens’ age that you are looking for in a favorable investment market will be approximate to the age of working individuals. If people are migrating into the area, the median age will have no problem staying in the range of the employment base. If you discover a high median age, your supply of tenants is declining. This isn’t good for the future economy of that region.

Employment Base Diversity

Accommodating various employers in the locality makes the market not as volatile. If your renters are concentrated in a few significant enterprises, even a small interruption in their business could cost you a lot of renters and raise your risk substantially.

Unemployment Rate

It is impossible to maintain a secure rental market when there are many unemployed residents in it. People who don’t have a job cannot buy goods or services. People who continue to have jobs can discover their hours and wages decreased. Even renters who are employed may find it tough to stay current with their rent.

Income Rates

Median household and per capita income data is a helpful indicator to help you discover the areas where the renters you are looking for are located. Your investment research will include rental charge and asset appreciation, which will depend on salary growth in the market.

Number of New Jobs Created

The more jobs are regularly being produced in a location, the more consistent your renter supply will be. New jobs equal additional tenants. This enables you to buy more lease real estate and fill existing unoccupied units.

School Ratings

The rating of school districts has a powerful effect on housing values throughout the community. Employers that are considering moving need top notch schools for their workers. Business relocation attracts more renters. Homebuyers who move to the region have a good impact on home prices. You can’t run into a vibrantly soaring housing market without reputable schools.

Property Appreciation Rates

Property appreciation rates are an imperative portion of your long-term investment scheme. You need to make sure that your assets will increase in value until you decide to liquidate them. You don’t want to allot any time reviewing locations showing depressed property appreciation rates.

A short-term rental is a furnished apartment or house where a tenant stays for shorter than 30 days. The nightly rental rates are typically higher in short-term rentals than in long-term units. With tenants coming and going, short-term rental units need to be maintained and sanitized on a regular basis.

Short-term rentals are popular with individuals on a business trip who are in the region for a few days, those who are relocating and need transient housing, and tourists. Any property owner can transform their residence into a short-term rental unit with the assistance offered by virtual home-sharing sites like VRBO and AirBnB. Short-term rentals are deemed as a smart technique to begin investing in real estate.

Short-term rental properties involve interacting with occupants more repeatedly than long-term rental units. This dictates that property owners deal with disagreements more regularly. Consider controlling your exposure with the aid of any of the good real estate attorneys in Morgantown WV.

Factors to Consider

Short-Term Rental Income

You should figure out how much income needs to be created to make your effort financially rewarding. Being aware of the average amount of rental fees in the market for short-term rentals will help you choose a desirable area to invest.

Median Property Prices

When buying investment housing for short-term rentals, you must calculate the amount you can pay. The median market worth of property will tell you whether you can manage to participate in that city. You can also employ median values in targeted areas within the market to pick locations for investing.

Price Per Square Foot

Price per square foot can be influenced even by the look and floor plan of residential units. A house with open entrances and vaulted ceilings cannot be compared with a traditional-style residential unit with bigger floor space. You can use the price per sq ft information to see a good overall picture of real estate values.

Short-Term Rental Occupancy Rate

The percentage of short-term rental properties that are currently occupied in an area is vital knowledge for an investor. A high occupancy rate signifies that an extra source of short-term rentals is required. If the rental occupancy rates are low, there isn’t enough demand in the market and you need to explore in a different place.

Short-Term Rental Cash-on-Cash Return

To determine whether you should put your cash in a specific investment asset or region, compute the cash-on-cash return. You can compute the cash-on-cash return by taking your Net Operating Income (NOI) and dividing it by your cash investment. The answer comes as a percentage. When an investment is high-paying enough to return the investment budget fast, you’ll receive a high percentage. Sponsored investments can reach stronger cash-on-cash returns as you will be using less of your own funds.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) levels are largely utilized by real property investors to assess the market value of rental units. Basically, the less money an investment property will cost (or is worth), the higher the cap rate will be. If cap rates are low, you can assume to spend more for rental units in that region. Divide your estimated Net Operating Income (NOI) by the investment property’s value or purchase price. The answer is the yearly return in a percentage.

Local Attractions

Short-term rental units are preferred in areas where tourists are drawn by events and entertainment sites. Individuals visit specific areas to attend academic and athletic activities at colleges and universities, be entertained by professional sports, support their kids as they participate in fun events, have fun at annual carnivals, and drop by theme parks. Natural scenic spots like mountainous areas, rivers, beaches, and state and national parks can also attract potential renters.

The fix and flip investment plan means acquiring a property that demands fixing up or renovation, creating more value by upgrading the property, and then reselling it for a higher market price. Your evaluation of improvement costs must be on target, and you have to be able to acquire the unit for lower than market value.

It is crucial for you to know the rates properties are going for in the region. The average number of Days On Market (DOM) for homes sold in the city is critical. To profitably “flip” a property, you have to liquidate the repaired home before you have to put out funds to maintain it.

In order that home sellers who need to sell their home can easily locate you, promote your availability by using our catalogue of companies that buy homes for cash in Morgantown WV along with the best real estate investment firms in Morgantown WV.

Also, look for top real estate bird dogs in Morgantown WV. Professionals in our directory concentrate on acquiring distressed property investments while they are still under the radar.

Factors to Consider

Median Home Price

When you hunt for a desirable area for property flipping, look at the median house price in the community. Modest median home prices are an indicator that there must be a steady supply of residential properties that can be bought for less than market value. This is an essential element of a successful rehab and resale project.

When your review entails a fast drop in home market worth, it could be a heads up that you’ll discover real property that meets the short sale requirements. You’ll hear about potential investments when you join up with Morgantown short sale specialists. You will find additional information about short sales in our article ⁠— What to Expect when Buying a Short Sale Home?.

Property Appreciation Rate

Are property values in the area on the way up, or on the way down? You’re searching for a steady growth of local home market values. Unpredictable value shifts are not beneficial, even if it is a remarkable and unexpected increase. When you’re acquiring and liquidating swiftly, an erratic environment can hurt you.

Average Renovation Costs

A thorough study of the area’s renovation expenses will make a significant difference in your market choice. The way that the municipality goes about approving your plans will have an effect on your venture as well. If you are required to present a stamped set of plans, you’ll have to include architect’s fees in your costs.

Population Growth

Population information will tell you if there is solid necessity for housing that you can provide. If there are purchasers for your renovated real estate, it will illustrate a strong population growth.

Median Population Age

The median citizens’ age is a direct indication of the supply of possible home purchasers. When the median age is equal to that of the typical worker, it’s a positive sign. People in the regional workforce are the most stable house purchasers. The goals of retirees will probably not suit your investment project plans.

Unemployment Rate

You need to see a low unemployment level in your target area. An unemployment rate that is lower than the US average is a good sign. A really strong investment location will have an unemployment rate lower than the state’s average. Jobless individuals won’t be able to acquire your homes.

Income Rates

Median household and per capita income amounts show you if you will get adequate buyers in that city for your residential properties. When property hunters acquire a house, they usually have to borrow money for the purchase. Home purchasers’ ability to obtain financing hinges on the size of their wages. Median income will help you determine if the typical home purchaser can buy the homes you intend to put up for sale. You also prefer to have salaries that are improving consistently. Building costs and home purchase prices go up from time to time, and you need to be certain that your potential homebuyers’ salaries will also climb up.

Number of New Jobs Created

The number of jobs created annually is vital data as you reflect on investing in a particular region. Homes are more conveniently sold in a region with a robust job environment. Additional jobs also draw wage earners arriving to the city from other places, which also strengthens the local market.

Hard Money Loan Rates

Short-term investors frequently borrow hard money loans in place of typical loans. This enables investors to rapidly purchase distressed properties. Find the best hard money lenders in Morgantown WV so you can compare their charges.

People who aren’t knowledgeable concerning hard money loans can uncover what they ought to understand with our resource for newbie investors — What Is Hard Money Lending?.

Wholesaling is a real estate investment strategy that involves finding homes that are attractive to real estate investors and signing a purchase contract. A real estate investor then “buys” the sale and purchase agreement from you. The investor then completes the acquisition. The wholesaler does not sell the residential property — they sell the contract to buy one.

The wholesaling method of investing involves the use of a title firm that understands wholesale transactions and is knowledgeable about and active in double close deals. Discover real estate investor friendly title companies in Morgantown WV that we selected for you.

To know how wholesaling works, look through our informative article Complete Guide to Real Estate Wholesaling as an Investment Strategy. When you choose wholesaling, include your investment company on our list of the best wholesale property investors in Morgantown WV. That will help any potential partners to see you and get in touch.

Factors to Consider

Median Home Prices

Median home values are essential to spotting markets where residential properties are being sold in your investors’ purchase price point. Since investors prefer investment properties that are on sale below market price, you will want to find lower median prices as an implied tip on the potential source of houses that you may purchase for below market price.

A fast decrease in the value of real estate could cause the accelerated appearance of houses with more debt than value that are wanted by wholesalers. This investment strategy often delivers multiple different benefits. However, there may be liabilities as well. Get additional details on how to wholesale a short sale property in our complete instructions. When you are ready to begin wholesaling, search through Morgantown top short sale legal advice experts as well as Morgantown top-rated foreclosure law offices lists to find the right advisor.

Property Appreciation Rate

Median home value dynamics are also vital. Investors who intend to keep real estate investment assets will want to find that housing prices are consistently appreciating. Declining market values show an equally weak rental and home-selling market and will dismay real estate investors.

Population Growth

Population growth stats are something that investors will look at carefully. When the community is growing, additional residential units are required. Real estate investors are aware that this will include both leasing and owner-occupied residential units. A region that has a shrinking community does not draw the real estate investors you want to purchase your purchase contracts.

Median Population Age

Investors need to see a dynamic real estate market where there is a substantial supply of tenants, newbie homeowners, and upwardly mobile locals switching to better properties. A region that has a big workforce has a constant source of renters and buyers. If the median population age corresponds with the age of wage-earning locals, it demonstrates a reliable residential market.

Income Rates

The median household and per capita income demonstrate steady improvement continuously in areas that are ripe for real estate investment. Increases in rent and listing prices will be aided by improving wages in the region. Real estate investors need this if they are to reach their anticipated profits.

Unemployment Rate

Real estate investors whom you contact to buy your sale contracts will regard unemployment figures to be a key bit of insight. Tenants in high unemployment communities have a tough time making timely rent payments and many will stop making rent payments completely. Long-term real estate investors who rely on uninterrupted rental income will lose revenue in these cities. Renters can’t move up to ownership and existing homeowners can’t sell their property and move up to a more expensive residence. Short-term investors will not take a chance on getting stuck with a house they can’t sell immediately.

Number of New Jobs Created

The number of jobs produced each year is an essential component of the residential real estate picture. Job formation implies a higher number of workers who have a need for housing. This is beneficial for both short-term and long-term real estate investors whom you rely on to take on your wholesale real estate.

Average Renovation Costs

Rehabilitation expenses have a large influence on a rehabber’s returns. Short-term investors, like home flippers, will not reach profitability if the acquisition cost and the rehab expenses equal to a larger sum than the After Repair Value (ARV) of the house. Below average remodeling spendings make a location more desirable for your top clients — rehabbers and landlords.

Note investing includes purchasing debt (mortgage note) from a mortgage holder at a discount. By doing this, the purchaser becomes the mortgage lender to the original lender’s borrower.

Performing loans mean mortgage loans where the borrower is always on time with their loan payments. They earn you stable passive income. Investors also buy non-performing mortgages that the investors either restructure to assist the borrower or foreclose on to get the property below actual worth.

Someday, you may accrue a selection of mortgage note investments and be unable to manage them by yourself. If this happens, you might pick from the best home loan servicers in Morgantown WV which will make you a passive investor.

If you choose to take on this investment method, you should place your project in our directory of the best companies that buy mortgage notes in Morgantown WV. This will make your business more visible to lenders offering profitable opportunities to note investors like yourself.

Factors to Consider

Foreclosure Rates

Low foreclosure rates are a sign that the community has opportunities for performing note buyers. Non-performing mortgage note investors can cautiously make use of cities with high foreclosure rates too. The neighborhood needs to be active enough so that investors can foreclose and resell collateral properties if called for.

Foreclosure Laws

Investors should understand the state’s regulations regarding foreclosure before buying notes. Are you dealing with a mortgage or a Deed of Trust? Lenders might need to get the court’s permission to foreclose on a mortgage note’s collateral. A Deed of Trust allows you to file a notice and proceed to foreclosure.

Mortgage Interest Rates

Purchased mortgage loan notes contain a negotiated interest rate. This is a significant determinant in the returns that lenders reach. Regardless of the type of note investor you are, the note’s interest rate will be critical to your estimates.

Traditional interest rates may vary by up to a quarter of a percent across the country. Private loan rates can be a little higher than conventional rates due to the greater risk taken by private lenders.

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

Demographics

When mortgage note buyers are choosing where to buy notes, they research the demographic statistics from potential markets. It’s essential to find out whether an adequate number of citizens in the community will continue to have reliable jobs and incomes in the future.
Mortgage note investors who invest in performing notes look for areas where a lot of younger individuals maintain good-paying jobs.

The identical area might also be advantageous for non-performing note investors and their exit strategy. If non-performing mortgage note investors have to foreclose, they will need a thriving real estate market in order to unload the defaulted property.

Property Values

As a mortgage note buyer, you must look for deals having a cushion of equity. When the value is not much more than the mortgage loan balance, and the lender needs to start foreclosure, the property might not realize enough to repay the lender. As mortgage loan payments decrease the balance owed, and the value of the property increases, the borrower’s equity grows.

Property Taxes

Most often, lenders collect the house tax payments from the borrower every month. So the mortgage lender makes sure that the property taxes are paid when payable. If the homeowner stops paying, unless the lender pays the property taxes, they will not be paid on time. If taxes are past due, the government’s lien supersedes any other liens to the front of the line and is satisfied first.

Because property tax escrows are collected with the mortgage loan payment, rising taxes indicate larger mortgage loan payments. Borrowers who have difficulty affording their loan payments might fall farther behind and sooner or later default.

Real Estate Market Strength

Both performing and non-performing mortgage note investors can do well in a strong real estate market. Because foreclosure is an important component of mortgage note investment strategy, growing real estate values are key to finding a profitable investment market.

A vibrant market may also be a potential place for initiating mortgage notes. For experienced investors, this is a beneficial part of their business plan.

A REIT, or Real Estate Investment Trust, means a firm that makes investments in income-generating assets. REITs were invented to permit average investors to buy into properties. REIT shares are not too costly to the majority of investors.

Investing in a REIT is called passive investing. Investment risk is spread throughout a group of real estate. Investors are able to sell their REIT shares anytime they want. Members in a REIT are not able to suggest or choose real estate properties for investment. The properties that the REIT decides to acquire are the properties you invest in.

A Real Estate Investment Fund is a mutual fund that holds stocks of real estate companies. The investment real estate properties are not owned by the fund — they are possessed by the firms the fund invests in. This is an additional method for passive investors to spread their investments with real estate avoiding the high entry-level cost or liability. Investment funds are not required to pay dividends unlike a REIT. Like any stock, investment funds’ values increase and fall with their share market value.

You may select a fund that focuses on specific categories of the real estate business but not specific areas for each real estate investment. You have to count on the fund’s directors to choose which markets and properties are picked for investment.