Ultimate Northampton County Real Estate Investing Guide for 2024

The term BRRRR is a description of a long-term rental strategy — Buy, Rehab, Rent, Refinance, Repeat. This is a plan to expand your investment portfolio not just acquire a single rental property. This strategy rests on your capability to take cash out when you refinance.

When you have finished repairing the house, its value should be more than your total purchase and renovation spendings. The rental is refinanced using the ARV and the difference, or equity, is given to you in cash. This money is put into one more investment property, and so on. You add appreciating assets to the balance sheet and lease revenue to your cash flow.

When you have created a significant collection of income creating residential units, you can prefer to hire someone else to oversee all rental business while you receive recurring net revenues. Find the best real estate management companies in Northampton County PA by looking through our directory.

Factors to Consider

Population Growth

The expansion or deterioration of a community’s population is a good gauge of the area’s long-term desirability for rental property investors. A booming population often signals busy relocation which equals new tenants. Relocating employers are drawn to growing cities giving job security to people who move there. This equals reliable tenants, more rental income, and more likely homebuyers when you need to liquidate your property.

Property Taxes

Real estate taxes, upkeep, and insurance expenses are considered by long-term rental investors for determining costs to predict if and how the investment strategy will be viable. Excessive costs in these areas threaten your investment’s bottom line. Locations with unreasonable property taxes aren’t considered a dependable environment for short- or long-term investment and should be avoided.

Price to Rent Ratio

Price to rent ratio (p/r) is a market indicator that tells you how much you can predict to charge as rent. If median property prices are steep and median rents are low — a high p/r, it will take more time for an investment to repay your costs and attain good returns. A large p/r informs you that you can charge modest rent in that market, a smaller p/r informs you that you can demand more.

Median Gross Rents

Median gross rents are a specific yardstick of the desirability of a lease market under consideration. You should find a market with stable median rent growth. If rents are being reduced, you can eliminate that market from discussion.

Median Population Age

Median population age in a dependable long-term investment market must show the usual worker’s age. If people are migrating into the district, the median age will not have a problem remaining in the range of the employment base. When working-age people are not venturing into the region to succeed retirees, the median age will go higher. This isn’t promising for the impending financial market of that market.

Employment Base Diversity

A diverse employment base is something a smart long-term investor landlord will look for. When there are only one or two significant hiring companies, and either of such relocates or closes down, it can make you lose renters and your property market worth to drop.

Unemployment Rate

High unemployment leads to fewer tenants and an unsteady housing market. Out-of-work residents cease being clients of yours and of other businesses, which creates a domino effect throughout the region. This can result in too many layoffs or fewer work hours in the city. Current tenants could become late with their rent in these conditions.

Income Rates

Median household and per capita income data is a helpful tool to help you pinpoint the cities where the renters you want are residing. Your investment study will take into consideration rental fees and property appreciation, which will be dependent on income raise in the market.

Number of New Jobs Created

The active economy that you are looking for will be producing enough jobs on a regular basis. New jobs equal additional tenants. Your objective of renting and buying additional assets requires an economy that will produce more jobs.

School Ratings

Community schools will cause a strong impact on the real estate market in their location. Business owners that are considering relocating want outstanding schools for their workers. Business relocation attracts more tenants. Recent arrivals who are looking for a house keep home prices up. For long-term investing, search for highly endorsed schools in a prospective investment area.

Property Appreciation Rates

The basis of a long-term investment approach is to hold the investment property. Investing in assets that you plan to maintain without being confident that they will improve in market worth is a formula for disaster. Low or decreasing property appreciation rates should remove a market from consideration.

A short-term rental is a furnished apartment or house where a tenant stays for less than one month. Long-term rentals, like apartments, require lower rent per night than short-term rentals. Because of the high number of occupants, short-term rentals require additional frequent care and tidying.

House sellers waiting to close on a new home, holidaymakers, and individuals traveling on business who are staying in the community for about week like to rent a residence short term. House sharing portals like AirBnB and VRBO have encouraged a lot of residential property owners to join in the short-term rental business. This makes short-term rentals a good technique to try residential real estate investing.

The short-term rental housing venture requires dealing with renters more often compared to yearly rental properties. This leads to the owner being required to regularly manage complaints. You may need to cover your legal liability by engaging one of the best Northampton County investor friendly real estate attorneys.

Factors to Consider

Short-Term Rental Income

First, figure out the amount of rental income you should have to reach your desired profits. Learning about the average amount of rent being charged in the area for short-term rentals will help you choose a desirable market to invest.

Median Property Prices

You also must determine how much you can manage to invest. The median values of property will show you if you can manage to participate in that city. You can also use median values in particular sub-markets within the market to select locations for investing.

Price Per Square Foot

Price per square foot gives a basic idea of property values when looking at comparable real estate. If you are examining the same kinds of real estate, like condos or individual single-family homes, the price per square foot is more consistent. If you take note of this, the price per square foot may give you a broad estimation of real estate prices.

Short-Term Rental Occupancy Rate

The need for more rental properties in a city can be checked by evaluating the short-term rental occupancy level. A region that demands additional rental units will have a high occupancy rate. If the rental occupancy indicators are low, there isn’t much demand in the market and you must look in a different place.

Short-Term Rental Cash-on-Cash Return

To understand if you should invest your cash in a specific rental unit or region, evaluate the cash-on-cash return. Divide the Net Operating Income (NOI) by the total amount of cash invested. The return comes as a percentage. If an investment is high-paying enough to reclaim the investment budget fast, you’ll have a high percentage. Financed investment ventures will yield higher cash-on-cash returns as you’re spending less of your own funds.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) rates are largely utilized by real estate investors to calculate the worth of rentals. An investment property that has a high cap rate as well as charging average market rental prices has a high market value. Low cap rates signify more expensive rental units. The cap rate is calculated by dividing the Net Operating Income (NOI) by the price or market value. This gives you a ratio that is the per-annum return, or cap rate.

Local Attractions

Short-term rental properties are desirable in communities where sightseers are attracted by events and entertainment spots. Individuals go to specific places to enjoy academic and sporting events at colleges and universities, be entertained by professional sports, support their kids as they participate in kiddie sports, have fun at yearly festivals, and go to adventure parks. Natural tourist sites like mountains, lakes, coastal areas, and state and national parks can also bring in prospective tenants.

The fix and flip investment plan involves purchasing a property that needs fixing up or restoration, generating added value by upgrading the property, and then reselling it for a higher market price. The essentials to a lucrative investment are to pay a lower price for the home than its as-is market value and to accurately determine the budget needed to make it marketable.

You also want to know the real estate market where the house is positioned. Find a region that has a low average Days On Market (DOM) metric. Disposing of the house immediately will keep your costs low and guarantee your revenue.

To help motivated residence sellers find you, list your company in our lists of real estate cash buyers in Northampton County PA and real estate investment firms in Northampton County PA.

In addition, team up with Northampton County bird dogs for real estate investors. Professionals on our list concentrate on securing little-known investments while they’re still unlisted.

Factors to Consider

Median Home Price

The location’s median home value will help you spot a good city for flipping houses. When purchase prices are high, there may not be a reliable reserve of run down residential units in the location. This is a basic element of a fix and flip market.

If market data indicates a fast decline in property market values, this can highlight the accessibility of potential short sale properties. Investors who partner with short sale processors in Northampton County PA get continual notices about possible investment properties. You’ll uncover more information concerning short sales in our article ⁠— What to Know About Buying a Short Sale Property?.

Property Appreciation Rate

Are property values in the region moving up, or moving down? Fixed increase in median values reveals a robust investment environment. Speedy property value growth could show a value bubble that isn’t sustainable. When you are purchasing and liquidating fast, an unstable market can hurt you.

Average Renovation Costs

You will need to evaluate building costs in any prospective investment market. The time it requires for acquiring permits and the local government’s regulations for a permit request will also impact your plans. If you have to show a stamped suite of plans, you will have to include architect’s rates in your budget.

Population Growth

Population increase metrics allow you to take a peek at housing demand in the market. Flat or negative population growth is an indicator of a sluggish market with not a good amount of purchasers to validate your investment.

Median Population Age

The median citizens’ age is a simple indicator of the supply of ideal homebuyers. The median age in the community needs to be the one of the average worker. A high number of such residents indicates a substantial source of home purchasers. Older people are preparing to downsize, or relocate into senior-citizen or retiree neighborhoods.

Unemployment Rate

If you find an area with a low unemployment rate, it is a good evidence of lucrative investment possibilities. It should definitely be lower than the national average. A positively solid investment community will have an unemployment rate less than the state’s average. If they want to purchase your rehabbed property, your potential buyers need to be employed, and their customers as well.

Income Rates

Median household and per capita income are an important indicator of the scalability of the housing market in the area. Most individuals who acquire a home have to have a mortgage loan. Homebuyers’ ability to qualify for a mortgage relies on the size of their salaries. The median income levels will show you if the community is preferable for your investment project. Search for locations where salaries are improving. Building expenses and housing purchase prices go up over time, and you want to be certain that your prospective homebuyers’ salaries will also get higher.

Number of New Jobs Created

The number of employment positions created on a consistent basis reflects if salary and population growth are feasible. An increasing job market communicates that a higher number of potential homeowners are comfortable with purchasing a house there. With a higher number of jobs generated, more potential buyers also come to the community from other districts.

Hard Money Loan Rates

Fix-and-flip property investors regularly use hard money loans instead of typical loans. Hard money financing products allow these purchasers to move forward on current investment opportunities without delay. Research top Northampton County hard money lenders for real estate investors and contrast financiers’ charges.

Those who aren’t well-versed in regard to hard money lenders can uncover what they should learn with our resource for newbie investors — What Is a Hard Money Lender in Real Estate?.

In real estate wholesaling, you search for a property that real estate investors would think is a profitable opportunity and enter into a sale and purchase agreement to buy the property. An investor then ”purchases” the contract from you. The owner sells the house to the investor instead of the real estate wholesaler. You’re selling the rights to buy the property, not the property itself.

This strategy requires using a title company that’s knowledgeable about the wholesale purchase and sale agreement assignment procedure and is capable and willing to manage double close deals. Locate investor friendly title companies in Northampton County PA on our website.

Learn more about how wholesaling works from our extensive guide — Real Estate Wholesaling Explained for Beginners. While you conduct your wholesaling venture, put your name in HouseCashin’s list of Northampton County top wholesale real estate investors. This way your desirable clientele will see you and reach out to you.

Factors to Consider

Median Home Prices

Median home values in the area will inform you if your designated purchase price point is viable in that city. A community that has a substantial pool of the reduced-value residential properties that your customers want will show a low median home purchase price.

Rapid deterioration in real property values may lead to a lot of houses with no equity that appeal to short sale flippers. Wholesaling short sale properties frequently carries a number of uncommon perks. Nonetheless, there could be risks as well. Learn about this from our detailed article Can I Wholesale a Short Sale Home?. If you decide to give it a try, make sure you have one of short sale lawyers in Northampton County PA and foreclosure attorneys in Northampton County PA to confer with.

Property Appreciation Rate

Median home market value movements clearly illustrate the home value in the market. Many investors, such as buy and hold and long-term rental investors, specifically want to find that residential property market values in the market are expanding over time. A declining median home price will show a weak leasing and home-buying market and will eliminate all kinds of investors.

Population Growth

Population growth statistics are a predictor that investors will consider thoroughly. When the population is multiplying, additional residential units are needed. This includes both leased and resale properties. If a population is not multiplying, it does not need new housing and real estate investors will look in other locations.

Median Population Age

Real estate investors need to participate in a thriving real estate market where there is a good source of renters, newbie homebuyers, and upwardly mobile residents purchasing bigger houses. For this to happen, there needs to be a dependable workforce of potential tenants and homebuyers. That’s why the community’s median age should be the age of skilled workers in the employment market.

Income Rates

The median household and per capita income show constant improvement historically in regions that are favorable for real estate investment. Income hike demonstrates a place that can deal with lease rate and real estate price surge. That will be vital to the investors you need to work with.

Unemployment Rate

Real estate investors whom you reach out to to buy your sale contracts will regard unemployment figures to be a key bit of information. Tenants in high unemployment cities have a tough time paying rent on schedule and many will skip payments completely. This adversely affects long-term investors who need to lease their investment property. High unemployment builds poverty that will stop interested investors from purchasing a home. Short-term investors won’t risk being cornered with a home they cannot resell easily.

Number of New Jobs Created

Knowing how frequently additional employment opportunities are created in the region can help you see if the real estate is positioned in a stable housing market. Job creation means additional workers who need a place to live. Long-term real estate investors, such as landlords, and short-term investors which include rehabbers, are drawn to regions with strong job creation rates.

Average Renovation Costs

Rehabilitation costs have a big effect on a rehabber’s returns. Short-term investors, like fix and flippers, won’t earn anything if the purchase price and the improvement costs amount to a higher amount than the After Repair Value (ARV) of the property. The less expensive it is to rehab a house, the more profitable the community is for your future purchase agreement buyers.

Note investing professionals purchase debt from mortgage lenders when they can get the note for less than face value. The borrower makes remaining payments to the mortgage note investor who has become their new mortgage lender.

When a loan is being paid as agreed, it’s considered a performing loan. Performing notes provide repeating income for you. Note investors also invest in non-performing loans that the investors either restructure to assist the client or foreclose on to buy the collateral below market value.

Ultimately, you might have multiple mortgage notes and have a hard time finding more time to handle them without help. In this event, you can hire one of residential mortgage servicers in Northampton County PA that would basically turn your portfolio into passive cash flow.

If you choose to adopt this method, add your venture to our list of real estate note buying companies in Northampton County PA. This will help you become more visible to lenders offering desirable opportunities to note buyers like yourself.

Factors to consider

Foreclosure Rates

Low foreclosure rates are a signal that the market has opportunities for performing note investors. If the foreclosures happen too often, the community could nonetheless be desirable for non-performing note buyers. If high foreclosure rates are causing a slow real estate market, it could be difficult to get rid of the collateral property after you seize it through foreclosure.

Foreclosure Laws

Mortgage note investors are required to know their state’s regulations concerning foreclosure before buying notes. They will know if the state uses mortgage documents or Deeds of Trust. A mortgage dictates that you go to court for permission to foreclose. A Deed of Trust enables the lender to file a public notice and proceed to foreclosure.

Mortgage Interest Rates

Purchased mortgage notes come with an agreed interest rate. That rate will significantly impact your investment returns. Regardless of the type of investor you are, the mortgage loan note’s interest rate will be important to your calculations.

Traditional lenders price different mortgage loan interest rates in various locations of the United States. Loans supplied by private lenders are priced differently and can be more expensive than traditional mortgage loans.

Successful mortgage note buyers regularly review the interest rates in their market set by private and traditional mortgage lenders.

Demographics

An efficient mortgage note investment strategy includes a study of the region by utilizing demographic information. It is important to know if an adequate number of citizens in the neighborhood will continue to have good paying jobs and incomes in the future.
A young expanding market with a strong employment base can provide a consistent income flow for long-term note buyers looking for performing notes.

Non-performing mortgage note buyers are looking at related components for various reasons. In the event that foreclosure is necessary, the foreclosed property is more conveniently sold in a growing market.

Property Values

The more equity that a borrower has in their home, the better it is for you as the mortgage lender. If the property value is not significantly higher than the loan amount, and the mortgage lender decides to start foreclosure, the home might not generate enough to payoff the loan. As loan payments lessen the balance owed, and the market value of the property appreciates, the borrower’s equity goes up too.

Property Taxes

Escrows for real estate taxes are typically sent to the lender along with the loan payment. By the time the taxes are due, there needs to be enough payments being held to handle them. If mortgage loan payments are not being made, the mortgage lender will have to either pay the taxes themselves, or the taxes become delinquent. If a tax lien is put in place, the lien takes a primary position over the mortgage lender’s loan.

Because property tax escrows are collected with the mortgage loan payment, rising taxes mean higher mortgage loan payments. This makes it difficult for financially challenged borrowers to make their payments, so the mortgage loan might become delinquent.

Real Estate Market Strength

A growing real estate market having regular value growth is helpful for all types of note investors. It’s good to understand that if you need to foreclose on a property, you will not have trouble obtaining a good price for it.

Vibrant markets often present opportunities for note buyers to originate the initial mortgage loan themselves. For veteran investors, this is a valuable portion of their business strategy.

A REIT, or Real Estate Investment Trust, is a company that makes investments in income-generating properties. Before REITs existed, investing in properties was too costly for most people. The everyday person can afford to invest in a REIT.

REIT investing is called passive investing. Investment liability is spread throughout a group of investment properties. Shareholders have the capability to unload their shares at any moment. Participants in a REIT aren’t able to propose or choose assets for investment. You are confined to the REIT’s collection of assets for investment.

A Real Estate Investment Fund is a mutual fund that holds stocks of real estate businesses. The investment properties are not possessed by the fund — they are held by the companies the fund invests in. Investment funds are considered a cost-effective way to combine real estate properties in your appropriation of assets without avoidable risks. Fund shareholders might not get ordinary distributions like REIT participants do. Like any stock, investment funds’ values go up and fall with their share market value.

You can find a real estate fund that specializes in a specific kind of real estate business, like commercial, but you can’t select the fund’s investment real estate properties or locations. You have to depend on the fund’s managers to select which locations and properties are picked for investment.