Ultimate Olympia Real Estate Investing Guide for 2024

A long-term wealth growing plan that involves Buying a rental, Renovating, Renting, Refinancing it, and Repeating the process by spending the money from the mortgage refinance is called BRRRR. BRRRR is a system for repeated growth. It is a must that you be able to receive a “cash-out” refinance for the method to be successful.

You enhance the value of the property beyond what you spent buying and fixing the asset. Then you borrow a cash-out mortgage refinance loan that is calculated on the higher value, and you pocket the balance. You acquire your next rental with the cash-out money and do it anew. You add improving investment assets to the portfolio and rental income to your cash flow.

After you have accumulated a substantial list of income generating properties, you may prefer to authorize others to manage your operations while you get repeating income. Locate one of property management agencies in Olympia WA with the help of our complete directory.

Factors to Consider

Population Growth

The increase or downturn of a region’s population is an accurate benchmark of its long-term desirability for rental property investors. A growing population typically demonstrates vibrant relocation which translates to new renters. Businesses think of this community as promising place to move their business, and for workers to relocate their families. A growing population creates a certain foundation of tenants who can handle rent raises, and a vibrant seller’s market if you decide to sell your properties.

Property Taxes

Property taxes, maintenance, and insurance expenses are investigated by long-term lease investors for determining expenses to predict if and how the project will be viable. Unreasonable payments in these areas threaten your investment’s returns. Areas with excessive property taxes are not a reliable setting for short- and long-term investment and should be avoided.

Price to Rent Ratio

Price to rent ratio (p/r) is a market signal that tells you the amount you can plan to demand as rent. If median real estate values are strong and median rents are weak — a high p/r, it will take more time for an investment to repay your costs and achieve good returns. A large price-to-rent ratio informs you that you can collect modest rent in that region, a low one says that you can demand more.

Median Gross Rents

Median gross rents are a true barometer of the acceptance of a rental market under discussion. Median rents should be expanding to validate your investment. You will not be able to realize your investment targets in a community where median gross rents are shrinking.

Median Population Age

The median residents’ age that you are hunting for in a dynamic investment environment will be near the age of salaried people. This could also illustrate that people are relocating into the area. If you see a high median age, your stream of tenants is going down. That is a weak long-term economic picture.

Employment Base Diversity

A varied amount of businesses in the location will improve your chances of strong profits. If your renters are concentrated in a couple of significant enterprises, even a little problem in their business might cost you a great deal of renters and raise your liability considerably.

Unemployment Rate

High unemployment means a lower number of renters and an uncertain housing market. Non-working citizens stop being customers of yours and of other businesses, which causes a domino effect throughout the community. Individuals who still keep their workplaces may discover their hours and salaries reduced. Existing tenants may become late with their rent payments in this scenario.

Income Rates

Median household and per capita income information is a valuable instrument to help you navigate the markets where the renters you are looking for are located. Rising incomes also tell you that rental rates can be raised throughout your ownership of the investment property.

Number of New Jobs Created

The more jobs are continuously being produced in a city, the more consistent your tenant source will be. The individuals who take the new jobs will need housing. Your objective of leasing and buying additional real estate requires an economy that can develop new jobs.

School Ratings

The reputation of school districts has a powerful effect on real estate prices across the city. When a business evaluates a city for possible expansion, they know that quality education is a must-have for their employees. Business relocation attracts more renters. New arrivals who purchase a home keep home prices strong. For long-term investing, search for highly endorsed schools in a prospective investment location.

Property Appreciation Rates

The basis of a long-term investment plan is to hold the property. Investing in properties that you plan to hold without being certain that they will improve in value is a recipe for failure. Weak or decreasing property value in a location under assessment is inadmissible.

A short-term rental is a furnished apartment or house where a tenant lives for less than four weeks. Long-term rentals, such as apartments, impose lower rental rates a night than short-term ones. With renters moving from one place to the next, short-term rental units have to be repaired and cleaned on a constant basis.

Short-term rentals are popular with people traveling for business who are in the area for several nights, those who are moving and need temporary housing, and people on vacation. House sharing websites such as AirBnB and VRBO have encouraged countless property owners to engage in the short-term rental industry. A convenient method to enter real estate investing is to rent a residential unit you already own for short terms.

The short-term property rental strategy includes dealing with tenants more regularly compared to yearly rental units. That leads to the landlord being required to frequently deal with grievances. You may need to defend your legal exposure by hiring one of the top Olympia investor friendly real estate law firms.

Factors to Consider

Short-Term Rental Income

You should decide how much rental income needs to be generated to make your effort successful. A location’s short-term rental income rates will quickly reveal to you if you can anticipate to achieve your projected rental income levels.

Median Property Prices

You also have to decide the budget you can spare to invest. The median price of property will tell you if you can manage to be in that community. You can also make use of median values in targeted neighborhoods within the market to choose communities for investment.

Price Per Square Foot

Price per sq ft can be impacted even by the look and floor plan of residential properties. When the styles of potential properties are very different, the price per square foot might not help you get a definitive comparison. It can be a quick method to gauge several sub-markets or residential units.

Short-Term Rental Occupancy Rate

A peek into the location’s short-term rental occupancy rate will inform you if there is an opportunity in the market for more short-term rental properties. When nearly all of the rental units are full, that area needs more rentals. If landlords in the community are having challenges filling their current units, you will have trouble filling yours.

Short-Term Rental Cash-on-Cash Return

To find out whether you should invest your capital in a particular rental unit or location, evaluate the cash-on-cash return. Divide the Net Operating Income (NOI) by the total amount of cash used. The return comes as a percentage. The higher it is, the quicker your investment funds will be returned and you’ll start generating profits. When you take a loan for part of the investment budget and spend less of your money, you will get a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This criterion compares investment property value to its yearly return. An income-generating asset that has a high cap rate and charges typical market rental rates has a good value. When investment real estate properties in a city have low cap rates, they generally will cost more money. Divide your projected Net Operating Income (NOI) by the investment property’s value or listing price. The percentage you will receive is the investment property’s cap rate.

Local Attractions

Major public events and entertainment attractions will attract tourists who need short-term rental properties. Vacationers come to specific areas to watch academic and athletic activities at colleges and universities, see professional sports, support their kids as they participate in fun events, have the time of their lives at annual festivals, and go to amusement parks. Notable vacation attractions are located in mountain and beach areas, near waterways, and national or state nature reserves.

The fix and flip strategy entails purchasing a property that demands improvements or renovation, creating more value by upgrading the building, and then selling it for a higher market value. To be successful, the property rehabber has to pay lower than the market price for the property and determine what it will take to repair it.

Investigate the prices so that you understand the accurate After Repair Value (ARV). Locate a community that has a low average Days On Market (DOM) metric. To successfully “flip” a property, you must sell the rehabbed home before you are required to shell out funds to maintain it.

To help distressed residence sellers find you, list your firm in our catalogues of home cash buyers in Olympia WA and real estate investment companies in Olympia WA.

Also, look for property bird dogs in Olympia WA. These experts specialize in quickly uncovering good investment opportunities before they come on the market.

Factors to Consider

Median Home Price

The location’s median housing price could help you locate a good community for flipping houses. When values are high, there may not be a good source of fixer-upper properties in the area. This is a necessary feature of a fix and flip market.

If regional information indicates a sudden drop in property market values, this can point to the availability of potential short sale real estate. Investors who work with short sale negotiators in Olympia WA get regular notices regarding potential investment real estate. You’ll uncover valuable data about short sales in our article ⁠— How to Buy Short Sale Real Estate.

Property Appreciation Rate

The shifts in property prices in an area are very important. You are searching for a constant appreciation of the city’s housing market values. Speedy property value growth may suggest a market value bubble that is not sustainable. When you are acquiring and liquidating swiftly, an uncertain market can hurt you.

Average Renovation Costs

A thorough review of the city’s building costs will make a significant impact on your market selection. The time it will take for getting permits and the local government’s rules for a permit request will also impact your decision. If you need to have a stamped set of plans, you’ll have to include architect’s charges in your costs.

Population Growth

Population growth is a good gauge of the reliability or weakness of the city’s housing market. When there are purchasers for your rehabbed real estate, it will indicate a strong population growth.

Median Population Age

The median citizens’ age is a simple indication of the accessibility of desirable home purchasers. If the median age is equal to the one of the usual worker, it’s a good indication. These can be the people who are probable homebuyers. Individuals who are preparing to leave the workforce or have already retired have very particular housing needs.

Unemployment Rate

While assessing a market for real estate investment, search for low unemployment rates. An unemployment rate that is lower than the nation’s median is what you are looking for. A very strong investment location will have an unemployment rate lower than the state’s average. To be able to acquire your fixed up houses, your clients are required to have a job, and their clients too.

Income Rates

Median household and per capita income amounts advise you if you will get enough home buyers in that region for your homes. Most people who acquire residential real estate have to have a mortgage loan. Homebuyers’ eligibility to get issued a loan depends on the size of their salaries. You can figure out based on the region’s median income if a good supply of people in the area can afford to purchase your real estate. You also prefer to see salaries that are improving consistently. To stay even with inflation and increasing building and material costs, you have to be able to regularly adjust your purchase rates.

Number of New Jobs Created

The number of employment positions created on a continual basis shows whether salary and population increase are sustainable. An expanding job market means that a higher number of prospective home buyers are confident in investing in a house there. With more jobs created, new potential buyers also relocate to the area from other cities.

Hard Money Loan Rates

Real estate investors who flip upgraded houses frequently use hard money funding instead of traditional loans. Doing this allows them negotiate profitable ventures without hindrance. Find private money lenders in Olympia WA and analyze their rates.

Those who aren’t well-versed in regard to hard money lenders can discover what they should know with our guide for newbies — What Does Hard Money Mean?.

In real estate wholesaling, you locate a residential property that investors would count as a lucrative deal and sign a purchase contract to buy the property. However you don’t purchase it: after you have the property under contract, you allow another person to become the buyer for a price. The real buyer then settles the purchase. The real estate wholesaler doesn’t sell the property — they sell the rights to buy it.

Wholesaling relies on the participation of a title insurance company that is okay with assignment of contracts and comprehends how to work with a double closing. Discover Olympia title companies that specialize in real estate property investments by using our list.

To know how real estate wholesaling works, study our detailed article What Is Wholesaling in Real Estate Investing?. As you manage your wholesaling venture, put your company in HouseCashin’s directory of Olympia top real estate wholesalers. This way your likely customers will know about your location and reach out to you.

Factors to Consider

Median Home Prices

Median home values in the market under consideration will quickly show you if your investors’ target real estate are situated there. A city that has a substantial supply of the below-market-value properties that your customers want will display a lower median home price.

A rapid depreciation in the price of real estate could generate the swift appearance of homes with negative equity that are desired by wholesalers. Short sale wholesalers can receive benefits from this opportunity. Nevertheless, there might be risks as well. Learn about this from our extensive explanation Can You Wholesale a Short Sale?. Once you are prepared to begin wholesaling, hunt through Olympia top short sale law firms as well as Olympia top-rated foreclosure lawyers lists to discover the best advisor.

Property Appreciation Rate

Property appreciation rate boosts the median price statistics. Investors who need to resell their properties anytime soon, such as long-term rental landlords, need a region where property market values are growing. Dropping purchase prices illustrate an equivalently poor leasing and housing market and will chase away real estate investors.

Population Growth

Population growth numbers are essential for your potential purchase contract buyers. When the population is multiplying, more residential units are required. This combines both rental and resale real estate. If a population isn’t multiplying, it does not need new houses and investors will search in other areas.

Median Population Age

A vibrant housing market requires individuals who are initially renting, then shifting into homebuyers, and then moving up in the residential market. A region with a big workforce has a strong pool of renters and buyers. If the median population age is equivalent to the age of employed locals, it indicates a robust housing market.

Income Rates

The median household and per capita income in a reliable real estate investment market should be going up. Increases in lease and sale prices have to be aided by improving salaries in the region. That will be critical to the investors you want to attract.

Unemployment Rate

Investors whom you contact to buy your contracts will deem unemployment figures to be a crucial bit of information. Tenants in high unemployment regions have a tough time paying rent on schedule and a lot of them will skip payments altogether. Long-term real estate investors won’t purchase a house in a community like this. Real estate investors cannot rely on tenants moving up into their homes when unemployment rates are high. This is a problem for short-term investors buying wholesalers’ agreements to rehab and resell a home.

Number of New Jobs Created

The amount of more jobs being produced in the region completes a real estate investor’s estimation of a potential investment spot. Job production suggests additional employees who require housing. Long-term investors, like landlords, and short-term investors such as rehabbers, are gravitating to places with strong job appearance rates.

Average Renovation Costs

Rehab spendings have a large effect on a flipper’s returns. Short-term investors, like fix and flippers, can’t reach profitability if the purchase price and the renovation expenses total to more than the After Repair Value (ARV) of the property. Look for lower average renovation costs.

Acquiring mortgage notes (loans) pays off when the loan can be bought for a lower amount than the face value. The borrower makes future mortgage payments to the investor who is now their current mortgage lender.

Performing loans are loans where the homeowner is always on time with their mortgage payments. Performing notes are a steady provider of cash flow. Note investors also buy non-performing mortgages that they either rework to assist the borrower or foreclose on to obtain the property below market worth.

At some time, you may create a mortgage note collection and notice you are needing time to manage your loans on your own. At that juncture, you might want to utilize our catalogue of Olympia top third party mortgage servicers and reassign your notes as passive investments.

Should you choose to employ this strategy, affix your venture to our list of mortgage note buyers in Olympia WA. When you do this, you’ll be noticed by the lenders who promote profitable investment notes for procurement by investors like you.

Factors to Consider

Foreclosure Rates

Mortgage note investors looking for current mortgage loans to buy will want to see low foreclosure rates in the area. Non-performing note investors can cautiously take advantage of places with high foreclosure rates as well. If high foreclosure rates have caused a slow real estate environment, it might be difficult to resell the collateral property if you seize it through foreclosure.

Foreclosure Laws

It is critical for note investors to understand the foreclosure laws in their state. Many states require mortgage documents and some utilize Deeds of Trust. When using a mortgage, a court has to approve a foreclosure. A Deed of Trust allows you to file a notice and start foreclosure.

Mortgage Interest Rates

Purchased mortgage loan notes come with a negotiated interest rate. That interest rate will unquestionably impact your investment returns. Regardless of the type of mortgage note investor you are, the note’s interest rate will be critical for your estimates.

Conventional interest rates may differ by up to a quarter of a percent across the US. Private loan rates can be moderately more than conventional mortgage rates due to the larger risk taken on by private mortgage lenders.

Note investors ought to always be aware of the present market mortgage interest rates, private and conventional, in potential mortgage note investment markets.

Demographics

When note investors are determining where to purchase mortgage notes, they consider the demographic information from potential markets. The neighborhood’s population increase, employment rate, employment market growth, income standards, and even its median age contain valuable information for note buyers.
Mortgage note investors who specialize in performing mortgage notes look for communities where a lot of younger people hold higher-income jobs.

Non-performing note buyers are looking at comparable factors for different reasons. If foreclosure is called for, the foreclosed house is more easily sold in a growing real estate market.

Property Values

The more equity that a homebuyer has in their property, the more advantageous it is for the mortgage loan holder. When the investor has to foreclose on a loan without much equity, the foreclosure sale may not even pay back the balance invested in the note. As loan payments decrease the amount owed, and the value of the property appreciates, the borrower’s equity goes up too.

Property Taxes

Usually, mortgage lenders accept the property taxes from the homeowner each month. So the lender makes sure that the real estate taxes are taken care of when due. If the homeowner stops paying, unless the note holder takes care of the property taxes, they won’t be paid on time. Tax liens leapfrog over all other liens.

If a community has a history of growing property tax rates, the combined home payments in that municipality are regularly expanding. Past due homeowners might not have the ability to keep paying rising mortgage loan payments and might stop paying altogether.

Real Estate Market Strength

Both performing and non-performing mortgage note buyers can succeed in a growing real estate market. They can be confident that, when required, a foreclosed collateral can be liquidated for an amount that makes a profit.

A vibrant market may also be a lucrative community for initiating mortgage notes. This is a profitable stream of income for accomplished investors.

A trust that owns income-generating real estate and that offers shares to the public is a REIT — Real Estate Investment Trust. REITs were created to enable average people to invest in properties. REIT shares are economical for most investors.

Participants in such organizations are totally passive investors. Investment liability is spread throughout a package of real estate. Participants have the option to sell their shares at any time. Shareholders in a REIT aren’t allowed to advise or pick real estate properties for investment. Their investment is confined to the assets selected by the REIT.

Real estate investment funds are basically mutual funds focusing on real estate firms, such as REITs. Any actual real estate property is possessed by the real estate firms, not the fund. Investment funds are a cost-effective method to combine real estate in your allocation of assets without needless liability. Whereas REITs must disburse dividends to its members, funds do not. As with other stocks, investment funds’ values increase and drop with their share price.

You can select a fund that focuses on a specific type of real estate company, such as multifamily, but you can’t suggest the fund’s investment real estate properties or markets. You must count on the fund’s directors to decide which markets and real estate properties are selected for investment.