Ultimate Overland Park Real Estate Investing Guide for 2024

The acronym BRRRR is an illustration of a long-term lease strategy — Buy, Rehab, Rent, Refinance, Repeat. This is a way to increase your investment assets rather than own one rental home. This method revolves around your capability to extract cash out when you refinance.

When you have concluded refurbishing the rental, its market value should be more than your complete purchase and renovation expenses. Then you receive a cash-out mortgage refinance loan that is computed on the higher market value, and you extract the difference. This money is put into a different property, and so on. You buy more and more rental homes and repeatedly increase your lease income.

After you’ve created a significant group of income generating real estate, you can choose to allow others to manage all rental business while you get repeating income. Find one of property management companies in Overland Park KS with the help of our exhaustive list.

Factors to Consider

Population Growth

Population growth or decline shows you if you can count on reliable returns from long-term property investments. If the population increase in a region is robust, then more tenants are definitely coming into the area. Businesses see this market as a desirable area to situate their company, and for employees to relocate their families. Increasing populations create a strong renter pool that can afford rent growth and homebuyers who help keep your property prices high.

Property Taxes

Real estate taxes, upkeep, and insurance expenses are investigated by long-term rental investors for computing costs to predict if and how the plan will be successful. Rental homes located in high property tax communities will have less desirable returns. If property tax rates are excessive in a given city, you will want to search elsewhere.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property prices and median lease rates that will indicate how high of a rent the market can tolerate. The price you can demand in a market will affect the price you are willing to pay depending on the number of years it will take to recoup those funds. The less rent you can collect the higher the p/r, with a low p/r indicating a stronger rent market.

Median Gross Rents

Median gross rents are a specific yardstick of the approval of a rental market under examination. Median rents must be going up to justify your investment. You will not be able to achieve your investment goals in a market where median gross rental rates are declining.

Median Population Age

Median population age should be nearly the age of a typical worker if a community has a good stream of tenants. If people are migrating into the community, the median age will not have a challenge remaining in the range of the workforce. If working-age people are not venturing into the location to succeed retirees, the median age will rise. That is a poor long-term economic picture.

Employment Base Diversity

A varied supply of companies in the market will boost your prospects for better returns. If the region’s working individuals, who are your renters, are hired by a varied number of companies, you can’t lose all all tenants at once (together with your property’s value), if a significant employer in the community goes out of business.

Unemployment Rate

High unemployment means a lower number of tenants and an unsteady housing market. People who don’t have a job won’t be able to pay for products or services. This can generate a high amount of dismissals or fewer work hours in the market. Remaining renters might delay their rent in this situation.

Income Rates

Median household and per capita income information is a useful instrument to help you pinpoint the regions where the tenants you are looking for are residing. Increasing salaries also inform you that rental prices can be raised over your ownership of the asset.

Number of New Jobs Created

The dynamic economy that you are hunting for will generate a high number of jobs on a regular basis. The people who are hired for the new jobs will require a residence. This enables you to acquire additional rental real estate and replenish existing empty units.

School Ratings

The status of school districts has an undeniable impact on housing market worth across the city. When a business owner explores a market for potential relocation, they keep in mind that first-class education is a requirement for their workforce. Dependable renters are a by-product of a strong job market. New arrivals who are looking for a house keep home prices strong. You can’t discover a dynamically expanding housing market without good schools.

Property Appreciation Rates

The foundation of a long-term investment strategy is to keep the property. You need to see that the odds of your asset going up in value in that area are promising. You do not need to allot any time navigating locations showing substandard property appreciation rates.

Residential properties where tenants reside in furnished accommodations for less than four weeks are called short-term rentals. Short-term rental businesses charge a higher rate per night than in long-term rental properties. Because of the increased rotation of occupants, short-term rentals need more regular upkeep and cleaning.

Short-term rentals are popular with corporate travelers who are in the city for several nights, people who are relocating and need short-term housing, and backpackers. House sharing sites such as AirBnB and VRBO have opened doors to numerous real estate owners to join in the short-term rental industry. Short-term rentals are considered an effective way to start investing in real estate.

The short-term property rental business requires interaction with occupants more often compared to yearly lease properties. That results in the investor having to regularly manage complaints. Think about handling your exposure with the help of one of the good real estate attorneys in Overland Park KS.

Factors to Consider

Short-Term Rental Income

First, calculate the amount of rental revenue you must have to meet your anticipated profits. An area’s short-term rental income levels will quickly show you when you can anticipate to accomplish your projected rental income figures.

Median Property Prices

Thoroughly evaluate the amount that you can spare for additional investment assets. Hunt for locations where the budget you count on matches up with the current median property values. You can fine-tune your property hunt by evaluating median market worth in the area’s sub-markets.

Price Per Square Foot

Price per square foot gives a general idea of property prices when considering similar real estate. A building with open entrances and vaulted ceilings can’t be contrasted with a traditional-style property with larger floor space. It may be a quick method to gauge multiple communities or homes.

Short-Term Rental Occupancy Rate

The demand for new rental units in a market can be verified by studying the short-term rental occupancy level. A high occupancy rate signifies that a new supply of short-term rentals is needed. If investors in the market are having challenges renting their current properties, you will have trouble filling yours.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return can show you if the property is a reasonable use of your cash. You can compute the cash-on-cash return by taking your Net Operating Income (NOI) and dividing it by the cash you are putting in. The percentage you get is your cash-on-cash return. When a venture is high-paying enough to reclaim the investment budget promptly, you will get a high percentage. If you get financing for a fraction of the investment and spend less of your own capital, you will see a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This metric compares investment property value to its per-annum return. An investment property that has a high cap rate as well as charges typical market rents has a good value. When investment real estate properties in an area have low cap rates, they generally will cost more. The cap rate is determined by dividing the Net Operating Income (NOI) by the price or market value. This presents you a percentage that is the annual return, or cap rate.

Local Attractions

Short-term tenants are usually individuals who come to a location to enjoy a recurrent important activity or visit places of interest. This includes top sporting events, kiddie sports activities, colleges and universities, large concert halls and arenas, carnivals, and theme parks. Popular vacation attractions are located in mountain and coastal points, near waterways, and national or state parks.

To fix and flip a residential property, you have to pay less than market worth, make any needed repairs and improvements, then sell the asset for after-repair market price. Your estimate of fix-up expenses should be precise, and you have to be capable of purchasing the home for less than market value.

It’s vital for you to understand how much houses are being sold for in the region. The average number of Days On Market (DOM) for homes listed in the region is important. To successfully “flip” a property, you need to liquidate the rehabbed home before you are required to come up with a budget to maintain it.

To help motivated property sellers locate you, place your company in our catalogues of cash property buyers in Overland Park KS and real estate investing companies in Overland Park KS.

Additionally, look for top real estate bird dogs in Overland Park KS. Professionals found here will help you by rapidly locating conceivably profitable deals prior to the opportunities being sold.

Factors to Consider

Median Home Price

Median property price data is a valuable indicator for evaluating a potential investment market. Modest median home values are a sign that there must be an inventory of houses that can be acquired for lower than market worth. This is a principal element of a fix and flip market.

When market data indicates a sudden decline in real property market values, this can indicate the availability of possible short sale homes. You will receive notifications concerning these opportunities by joining with short sale processors in Overland Park KS. Discover more regarding this type of investment by studying our guide How Do You Buy a Short Sale Home?.

Property Appreciation Rate

Are real estate prices in the city on the way up, or moving down? You’re looking for a stable increase of local property prices. Housing market worth in the city need to be increasing consistently, not rapidly. When you’re purchasing and liquidating fast, an uncertain environment can hurt you.

Average Renovation Costs

You’ll have to evaluate construction costs in any prospective investment location. The time it takes for acquiring permits and the local government’s requirements for a permit application will also influence your plans. If you are required to show a stamped suite of plans, you’ll need to incorporate architect’s rates in your budget.

Population Growth

Population data will inform you whether there is an increasing necessity for residential properties that you can supply. Flat or negative population growth is an indicator of a feeble environment with not a good amount of purchasers to validate your investment.

Median Population Age

The median residents’ age is a direct indicator of the accessibility of possible homebuyers. The median age should not be lower or higher than the age of the typical worker. A high number of such people demonstrates a substantial supply of homebuyers. The demands of retired people will most likely not suit your investment project strategy.

Unemployment Rate

When assessing a city for investment, look for low unemployment rates. An unemployment rate that is less than the country’s average is what you are looking for. When it’s also lower than the state average, that is much more desirable. Unemployed people can’t acquire your real estate.

Income Rates

Median household and per capita income amounts show you whether you will see adequate buyers in that area for your houses. The majority of individuals who buy a house have to have a home mortgage loan. To obtain approval for a home loan, a home buyer can’t spend for a house payment greater than a particular percentage of their income. Median income can let you know if the typical home purchaser can buy the property you intend to flip. Scout for areas where salaries are growing. Construction expenses and home purchase prices increase from time to time, and you need to be sure that your target homebuyers’ wages will also improve.

Number of New Jobs Created

The number of employment positions created on a regular basis reflects if salary and population increase are sustainable. An increasing job market indicates that a larger number of potential homeowners are amenable to investing in a house there. With additional jobs appearing, new potential homebuyers also come to the region from other districts.

Hard Money Loan Rates

Those who buy, fix, and resell investment homes are known to enlist hard money instead of typical real estate financing. This lets them to immediately buy undervalued properties. Discover private money lenders for real estate in Overland Park KS and estimate their rates.

If you are unfamiliar with this funding type, learn more by studying our article — How Does a Hard Money Loan Work in Real Estate?.

Wholesaling is a real estate investment plan that entails locating properties that are interesting to real estate investors and signing a purchase contract. However you don’t buy the house: once you control the property, you allow someone else to become the buyer for a fee. The contracted property is sold to the investor, not the real estate wholesaler. The wholesaler does not sell the property itself — they just sell the purchase and sale agreement.

Wholesaling relies on the involvement of a title insurance firm that is okay with assigned real estate sale agreements and knows how to deal with a double closing. Find title services for real estate investors in Overland Park KS in our directory.

To know how wholesaling works, read our comprehensive article Complete Guide to Real Estate Wholesaling as an Investment Strategy. As you go about your wholesaling business, insert your company in HouseCashin’s list of Overland Park top investment property wholesalers. That way your possible customers will learn about you and reach out to you.

Factors to Consider

Median Home Prices

Median home prices in the region will tell you if your preferred price range is achievable in that location. As investors need properties that are available below market price, you will want to see reduced median prices as an implicit hint on the potential availability of homes that you could acquire for less than market price.

A rapid decline in the market value of real estate might generate the abrupt appearance of properties with more debt than value that are wanted by wholesalers. This investment method often delivers multiple different benefits. However, there might be risks as well. Find out more about wholesaling short sales from our exhaustive article. When you have chosen to try wholesaling short sale homes, be sure to engage someone on the list of the best short sale legal advice experts in Overland Park KS and the best foreclosure attorneys in Overland Park KS to assist you.

Property Appreciation Rate

Property appreciation rate completes the median price statistics. Investors who intend to hold investment assets will want to know that housing prices are regularly appreciating. Shrinking purchase prices indicate an unequivocally weak leasing and housing market and will chase away investors.

Population Growth

Population growth figures are essential for your proposed contract buyers. If they find that the community is growing, they will decide that new housing is needed. There are more individuals who rent and additional customers who purchase homes. A city that has a dropping community does not attract the real estate investors you want to purchase your purchase contracts.

Median Population Age

A strong housing market prefers residents who start off leasing, then moving into homeownership, and then buying up in the residential market. A community with a huge workforce has a constant source of renters and purchasers. When the median population age is the age of working residents, it demonstrates a reliable residential market.

Income Rates

The median household and per capita income in a good real estate investment market have to be going up. Income hike proves a location that can absorb rental rate and housing purchase price surge. Investors want this in order to meet their anticipated returns.

Unemployment Rate

The region’s unemployment stats will be a crucial factor for any future wholesale property purchaser. Late rent payments and lease default rates are higher in communities with high unemployment. This negatively affects long-term real estate investors who plan to lease their property. Real estate investors can’t depend on renters moving up into their houses if unemployment rates are high. Short-term investors won’t risk getting pinned down with a unit they cannot sell immediately.

Number of New Jobs Created

Learning how soon additional jobs are produced in the community can help you determine if the real estate is positioned in a stable housing market. Individuals move into a location that has additional jobs and they need a place to reside. Whether your buyer pool is made up of long-term or short-term investors, they will be drawn to a community with consistent job opening production.

Average Renovation Costs

Updating expenses have a strong influence on an investor’s returns. When a short-term investor rehabs a home, they have to be prepared to dispose of it for a larger amount than the entire cost of the acquisition and the improvements. Look for lower average renovation costs.

Note investing means purchasing a loan (mortgage note) from a lender for less than the balance owed. By doing this, you become the lender to the first lender’s client.

When a loan is being repaid on time, it is considered a performing note. Performing loans earn you stable passive income. Non-performing mortgage notes can be restructured or you could pick up the property at a discount via a foreclosure process.

Ultimately, you might grow a selection of mortgage note investments and be unable to handle the portfolio without assistance. In this case, you can hire one of home loan servicers in Overland Park KS that will basically turn your portfolio into passive cash flow.

If you find that this model is best for you, place your firm in our list of Overland Park top mortgage note buyers. Appearing on our list sets you in front of lenders who make desirable investment opportunities accessible to note buyers such as you.

Factors to Consider

Foreclosure Rates

Performing loan purchasers research areas that have low foreclosure rates. Non-performing mortgage note investors can cautiously take advantage of places that have high foreclosure rates as well. If high foreclosure rates are causing an underperforming real estate market, it might be tough to get rid of the property if you foreclose on it.

Foreclosure Laws

Investors are expected to understand their state’s laws concerning foreclosure prior to pursuing this strategy. Some states use mortgage documents and others use Deeds of Trust. When using a mortgage, a court will have to approve a foreclosure. A Deed of Trust authorizes you to file a public notice and continue to foreclosure.

Mortgage Interest Rates

The interest rate is indicated in the mortgage loan notes that are acquired by investors. This is an important element in the returns that lenders reach. No matter which kind of note investor you are, the mortgage loan note’s interest rate will be critical for your estimates.

Traditional lenders charge different interest rates in different regions of the US. Private loan rates can be moderately higher than conventional interest rates due to the more significant risk accepted by private lenders.

Successful mortgage note buyers continuously search the mortgage interest rates in their market offered by private and traditional lenders.

Demographics

A market’s demographics details help note buyers to target their work and effectively use their resources. The region’s population increase, unemployment rate, job market growth, income standards, and even its median age hold usable facts for you.
Investors who like performing notes choose communities where a large number of younger people hold higher-income jobs.

Note buyers who acquire non-performing notes can also make use of stable markets. When foreclosure is called for, the foreclosed property is more easily sold in a good real estate market.

Property Values

The greater the equity that a borrower has in their home, the better it is for the mortgage lender. When the investor has to foreclose on a mortgage loan without much equity, the sale may not even cover the balance owed. The combination of mortgage loan payments that lessen the loan balance and annual property value appreciation expands home equity.

Property Taxes

Many homeowners pay real estate taxes via lenders in monthly portions together with their loan payments. The mortgage lender passes on the taxes to the Government to ensure the taxes are paid promptly. The mortgage lender will need to take over if the mortgage payments stop or the lender risks tax liens on the property. Property tax liens take priority over any other liens.

Because property tax escrows are collected with the mortgage payment, rising property taxes mean larger house payments. This makes it complicated for financially weak homeowners to make their payments, and the loan might become delinquent.

Real Estate Market Strength

A strong real estate market having strong value growth is good for all kinds of note buyers. It’s important to know that if you have to foreclose on a collateral, you won’t have trouble getting an acceptable price for the collateral property.

A vibrant real estate market might also be a good environment for creating mortgage notes. It is another phase of a mortgage note investor’s career.

A REIT, or Real Estate Investment Trust, is a firm that invests in income-producing assets. REITs are created to permit everyday investors to buy into properties. Many investors at present are able to invest in a REIT.

Shareholders in these trusts are entirely passive investors. The exposure that the investors are taking is distributed within a group of investment real properties. Investors can liquidate their REIT shares whenever they wish. Participants in a REIT are not able to propose or submit real estate properties for investment. The land and buildings that the REIT picks to buy are the properties your funds are used to buy.

Mutual funds that contain shares of real estate firms are referred to as real estate investment funds. The investment properties are not held by the fund — they’re held by the companies in which the fund invests. Investment funds are considered an affordable method to incorporate real estate in your appropriation of assets without avoidable exposure. Fund participants may not collect usual disbursements the way that REIT members do. The worth of a fund to an investor is the expected growth of the worth of the fund’s shares.

You can pick a fund that specializes in a selected category of real estate you’re aware of, but you don’t get to pick the location of each real estate investment. As passive investors, fund shareholders are happy to let the directors of the fund determine all investment selections.