Ultimate Phillips County Real Estate Investing Guide for 2024

BRRRR means “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a plan for repeated growth. An important part of this plan is to be able to obtain a “cash-out” refinance.

When you have concluded fixing the asset, the market value has to be higher than your complete acquisition and fix-up expenses. After that, you extract the value you produced from the property in a “cash-out” refinance. You acquire your next house with the cash-out capital and begin all over again. This program helps you to reliably grow your assets and your investment revenue.

Once you’ve accumulated a considerable list of income producing residential units, you may decide to find others to handle all operations while you get recurring income. Locate one of property management agencies in Phillips County KS with the help of our comprehensive directory.

Factors to Consider

Population Growth

Population increase or shrinking signals you if you can expect good results from long-term investments. If the population increase in a location is high, then new tenants are definitely moving into the community. The market is desirable to employers and workers to locate, find a job, and raise households. An increasing population constructs a reliable base of tenants who can handle rent raises, and an active property seller’s market if you decide to sell any investment assets.

Property Taxes

Property taxes, upkeep, and insurance spendings are investigated by long-term rental investors for determining expenses to estimate if and how the investment will work out. High expenses in these areas threaten your investment’s bottom line. Regions with excessive property tax rates aren’t considered a stable situation for short- or long-term investment and need to be avoided.

Price to Rent Ratio

Price to rent ratio (p/r) is a market indicator that tells you the amount you can predict to charge as rent. The amount of rent that you can collect in an area will impact the sum you are willing to pay determined by the time it will take to recoup those costs. The less rent you can demand the higher the p/r, with a low p/r indicating a more robust rent market.

Median Gross Rents

Median gross rents are a specific yardstick of the approval of a rental market under discussion. You are trying to find a community with stable median rent growth. Shrinking rental rates are an alert to long-term investor landlords.

Median Population Age

The median citizens’ age that you are hunting for in a dynamic investment market will be near the age of employed individuals. This could also signal that people are relocating into the market. If you discover a high median age, your stream of tenants is reducing. That is a poor long-term financial scenario.

Employment Base Diversity

Having diverse employers in the area makes the market not as risky. If there are only a couple major hiring companies, and one of such moves or closes down, it can make you lose tenants and your property market values to go down.

Unemployment Rate

High unemployment results in fewer renters and an unreliable housing market. People who don’t have a job won’t be able to pay for products or services. Individuals who continue to have workplaces may discover their hours and incomes reduced. Remaining renters could become late with their rent in these circumstances.

Income Rates

Median household and per capita income information is a valuable indicator to help you pinpoint the regions where the tenants you prefer are located. Increasing wages also tell you that rental rates can be adjusted throughout the life of the property.

Number of New Jobs Created

The robust economy that you are searching for will generate a high number of jobs on a consistent basis. Additional jobs equal more renters. This gives you confidence that you can sustain a sufficient occupancy level and acquire additional real estate.

School Ratings

School ratings in the community will have a big influence on the local property market. Businesses that are interested in relocating want outstanding schools for their employees. Dependable tenants are the result of a robust job market. Homeowners who move to the community have a positive influence on property prices. You will not run into a vibrantly growing residential real estate market without good schools.

Property Appreciation Rates

High property appreciation rates are a must for a lucrative long-term investment. Investing in real estate that you expect to hold without being confident that they will increase in price is a formula for failure. Low or dropping property appreciation rates should exclude a community from consideration.

A furnished property where tenants live for less than 4 weeks is referred to as a short-term rental. Short-term rental businesses charge a higher rate per night than in long-term rental properties. These units may require more frequent repairs and sanitation.

Average short-term tenants are excursionists, home sellers who are relocating, and people traveling on business who require a more homey place than hotel accommodation. House sharing platforms such as AirBnB and VRBO have encouraged numerous real estate owners to participate in the short-term rental industry. Short-term rentals are considered an effective approach to get started on investing in real estate.

Destination rental owners require working directly with the tenants to a greater degree than the owners of longer term leased units. This dictates that property owners deal with disputes more often. Think about protecting yourself and your portfolio by adding any of real estate lawyers in Phillips County KS to your network of professionals.

Factors to Consider

Short-Term Rental Income

You have to figure out how much revenue has to be earned to make your investment worthwhile. Knowing the usual rate of rental fees in the community for short-term rentals will help you pick a preferable community to invest.

Median Property Prices

Thoroughly assess the amount that you can spend on new investment properties. The median price of real estate will tell you if you can afford to be in that market. You can adjust your property hunt by looking at median values in the area’s sub-markets.

Price Per Square Foot

Price per square foot provides a general picture of property prices when estimating similar units. If you are analyzing the same types of real estate, like condominiums or detached single-family residences, the price per square foot is more consistent. Price per sq ft may be a fast method to compare multiple neighborhoods or residential units.

Short-Term Rental Occupancy Rate

The percentage of short-term rental units that are presently filled in a city is critical data for an investor. When most of the rentals are filled, that community needs additional rental space. Weak occupancy rates signify that there are already enough short-term rentals in that community.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return can tell you if the property is a good use of your cash. Take your projected Net Operating Income (NOI) and divide it by your investment cash budget. The result is shown as a percentage. High cash-on-cash return shows that you will get back your funds quicker and the purchase will have a higher return. When you take a loan for a fraction of the investment and spend less of your cash, you will receive a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

Another measurement indicates the value of real estate as a return-yielding asset — average short-term rental capitalization (cap) rate. A rental unit that has a high cap rate as well as charging market rental rates has a strong value. When investment real estate properties in a market have low cap rates, they usually will cost too much. Divide your expected Net Operating Income (NOI) by the property’s market worth or purchase price. The result is the yearly return in a percentage.

Local Attractions

Short-term tenants are usually tourists who visit a region to enjoy a recurring special activity or visit tourist destinations. If an area has places that regularly hold exciting events, such as sports arenas, universities or colleges, entertainment centers, and amusement parks, it can invite visitors from out of town on a regular basis. Popular vacation attractions are located in mountainous and beach points, along waterways, and national or state nature reserves.

When a home flipper purchases a property cheaper than its market worth, fixes it so that it becomes more valuable, and then disposes of the home for a profit, they are referred to as a fix and flip investor. Your calculation of rehab costs should be accurate, and you need to be capable of purchasing the home for less than market worth.

It is critical for you to know what houses are going for in the region. Locate a region with a low average Days On Market (DOM) metric. To effectively “flip” a property, you must liquidate the rehabbed house before you have to spend cash to maintain it.

So that real property owners who need to get cash for their home can easily find you, highlight your availability by using our catalogue of the best cash property buyers in Phillips County KS along with the best real estate investment firms in Phillips County KS.

In addition, hunt for property bird dogs in Phillips County KS. Specialists located on our website will assist you by immediately locating potentially profitable projects ahead of the projects being listed.

Factors to Consider

Median Home Price

When you hunt for a profitable region for property flipping, investigate the median home price in the neighborhood. You are seeking for median prices that are low enough to reveal investment possibilities in the area. You must have lower-priced real estate for a profitable fix and flip.

If you detect a quick drop in real estate values, this could signal that there are conceivably houses in the location that will work for a short sale. You can be notified concerning these opportunities by joining with short sale negotiation companies in Phillips County KS. Learn more about this sort of investment explained in our guide How to Buy a House as a Short Sale.

Property Appreciation Rate

The movements in real estate prices in a region are critical. Fixed surge in median values shows a vibrant investment environment. Rapid market worth increases may suggest a market value bubble that isn’t practical. You could wind up buying high and selling low in an unreliable market.

Average Renovation Costs

Look thoroughly at the potential rehab spendings so you will know whether you can achieve your predictions. Other expenses, such as permits, can inflate your budget, and time which may also turn into an added overhead. You want to understand if you will be required to employ other contractors, like architects or engineers, so you can get ready for those spendings.

Population Growth

Population growth is a solid gauge of the strength or weakness of the location’s housing market. If there are buyers for your rehabbed properties, the statistics will demonstrate a robust population increase.

Median Population Age

The median residents’ age can additionally show you if there are adequate home purchasers in the community. When the median age is the same as the one of the usual worker, it is a good sign. Workers can be the individuals who are probable homebuyers. People who are about to exit the workforce or are retired have very specific housing requirements.

Unemployment Rate

While checking a location for real estate investment, keep your eyes open for low unemployment rates. An unemployment rate that is lower than the US average is preferred. When it’s also less than the state average, that’s much more preferable. Jobless people cannot purchase your property.

Income Rates

Median household and per capita income are an important indicator of the robustness of the home-buying environment in the city. Most people need to obtain financing to buy a home. To get a home loan, a person can’t spend for a house payment greater than a particular percentage of their salary. Median income will help you know whether the typical homebuyer can afford the houses you intend to put up for sale. You also need to see wages that are going up continually. Construction costs and housing purchase prices rise over time, and you want to be certain that your prospective clients’ wages will also improve.

Number of New Jobs Created

The number of jobs created each year is valuable information as you consider investing in a target region. Houses are more easily sold in a city with a vibrant job market. Competent trained professionals looking into purchasing a house and deciding to settle opt for migrating to areas where they won’t be out of work.

Hard Money Loan Rates

Investors who work with rehabbed real estate often use hard money financing instead of traditional loans. This strategy lets them complete profitable ventures without hindrance. Find real estate hard money lenders in Phillips County KS and contrast their rates.

Investors who are not knowledgeable in regard to hard money loans can learn what they ought to know with our guide for newbies — How Does a Hard Money Loan Work?.

As a real estate wholesaler, you enter a sale and purchase agreement to buy a house that other real estate investors might need. However you don’t close on the home: after you have the property under contract, you allow someone else to become the buyer for a price. The seller sells the house to the real estate investor not the wholesaler. The real estate wholesaler does not sell the property itself — they simply sell the purchase and sale agreement.

Wholesaling depends on the involvement of a title insurance company that is okay with assigning real estate sale agreements and knows how to deal with a double closing. Find Phillips County title companies that work with wholesalers by using our list.

Learn more about how wholesaling works from our extensive guide — Wholesale Real Estate Investing 101 for Beginners. As you manage your wholesaling activities, place your firm in HouseCashin’s list of Phillips County top real estate wholesalers. This way your potential customers will know about your offering and reach out to you.

Factors to Consider

Median Home Prices

Median home values are instrumental to discovering places where residential properties are being sold in your investors’ price range. A city that has a good pool of the marked-down residential properties that your customers want will have a below-than-average median home price.

Accelerated weakening in real property prices may lead to a number of real estate with no equity that appeal to short sale flippers. Wholesaling short sales repeatedly brings a collection of uncommon benefits. However, be cognizant of the legal liability. Obtain additional data on how to wholesale a short sale in our exhaustive guide. When you have determined to try wholesaling short sale homes, be certain to hire someone on the directory of the best short sale legal advice experts in Phillips County KS and the best foreclosure lawyers in Phillips County KS to help you.

Property Appreciation Rate

Median home purchase price fluctuations explain in clear detail the housing value in the market. Real estate investors who want to hold real estate investment properties will have to know that home prices are steadily increasing. A declining median home price will illustrate a vulnerable rental and housing market and will eliminate all types of investors.

Population Growth

Population growth numbers are important for your potential contract purchasers. When they realize the population is multiplying, they will conclude that more housing is required. This combines both leased and ‘for sale’ properties. A place with a dropping population does not interest the real estate investors you want to purchase your contracts.

Median Population Age

Investors have to be a part of a steady housing market where there is a considerable supply of renters, first-time homeowners, and upwardly mobile residents purchasing larger residences. A place that has a huge workforce has a steady supply of renters and purchasers. A location with these characteristics will show a median population age that is equivalent to the wage-earning person’s age.

Income Rates

The median household and per capita income should be rising in a vibrant residential market that real estate investors want to work in. When renters’ and home purchasers’ incomes are going up, they can handle rising rental rates and residential property purchase costs. That will be critical to the property investors you want to draw.

Unemployment Rate

Real estate investors will pay a lot of attention to the area’s unemployment rate. High unemployment rate prompts a lot of tenants to pay rent late or default completely. This is detrimental to long-term investors who plan to lease their residential property. High unemployment causes poverty that will stop people from purchasing a home. This can prove to be hard to reach fix and flip investors to buy your contracts.

Number of New Jobs Created

The number of jobs appearing yearly is an important part of the housing structure. Job formation signifies additional workers who have a need for housing. This is helpful for both short-term and long-term real estate investors whom you count on to close your contracts.

Average Renovation Costs

Rehabilitation spendings have a important impact on a real estate investor’s returns. When a short-term investor rehabs a property, they need to be able to unload it for more than the whole sum they spent for the acquisition and the improvements. The less you can spend to rehab a home, the friendlier the place is for your potential purchase agreement buyers.

This strategy means obtaining debt (mortgage note) from a lender for less than the balance owed. When this happens, the note investor takes the place of the debtor’s mortgage lender.

Performing notes are mortgage loans where the borrower is consistently current on their mortgage payments. Performing loans earn you stable passive income. Note investors also purchase non-performing mortgage notes that the investors either restructure to help the debtor or foreclose on to get the collateral less than market worth.

One day, you could have a lot of mortgage notes and require more time to oversee them on your own. In this case, you could hire one of mortgage servicing companies in Phillips County KS that would essentially turn your portfolio into passive cash flow.

Should you conclude that this plan is best for you, include your business in our directory of Phillips County top companies that buy mortgage notes. Joining will help you become more noticeable to lenders offering profitable possibilities to note buyers like yourself.

Factors to consider

Foreclosure Rates

Low foreclosure rates are an indication that the region has investment possibilities for performing note purchasers. Non-performing mortgage note investors can cautiously take advantage of cities with high foreclosure rates as well. However, foreclosure rates that are high can signal an anemic real estate market where unloading a foreclosed unit could be a no easy task.

Foreclosure Laws

It is necessary for note investors to learn the foreclosure regulations in their state. Are you faced with a Deed of Trust or a mortgage? When using a mortgage, a court has to allow a foreclosure. A Deed of Trust permits the lender to file a notice and start foreclosure.

Mortgage Interest Rates

Acquired mortgage notes contain an agreed interest rate. That rate will significantly impact your returns. No matter which kind of mortgage note investor you are, the loan note’s interest rate will be important for your predictions.

Conventional interest rates can vary by up to a 0.25% around the US. Private loan rates can be a little more than traditional mortgage rates because of the higher risk accepted by private lenders.

A note investor should know the private as well as traditional mortgage loan rates in their areas at any given time.

Demographics

When note buyers are choosing where to invest, they’ll consider the demographic data from likely markets. It’s essential to know if a sufficient number of citizens in the market will continue to have good jobs and wages in the future.
Performing note buyers look for homebuyers who will pay without delay, generating a repeating revenue source of loan payments.

The identical community might also be beneficial for non-performing mortgage note investors and their end-game plan. A strong regional economy is needed if investors are to find homebuyers for properties they’ve foreclosed on.

Property Values

The more equity that a homeowner has in their property, the better it is for their mortgage lender. This enhances the possibility that a possible foreclosure sale will repay the amount owed. The combination of mortgage loan payments that reduce the loan balance and annual property market worth growth expands home equity.

Property Taxes

Escrows for house taxes are most often sent to the lender along with the loan payment. By the time the taxes are due, there needs to be sufficient funds in escrow to pay them. If loan payments aren’t being made, the lender will have to either pay the property taxes themselves, or the property taxes become delinquent. If property taxes are delinquent, the government’s lien leapfrogs any other liens to the front of the line and is satisfied first.

If property taxes keep increasing, the borrowers’ loan payments also keep growing. Past due homeowners might not have the ability to maintain growing payments and might stop paying altogether.

Real Estate Market Strength

A vibrant real estate market with consistent value increase is beneficial for all categories of note buyers. It’s critical to understand that if you need to foreclose on a collateral, you will not have difficulty obtaining an appropriate price for the property.

A vibrant market might also be a profitable community for initiating mortgage notes. It is a supplementary stage of a note buyer’s career.

Some real estate investment companies are built as trusts called Real Estate Investment Trusts or REITs. Before REITs were created, real estate investing used to be too expensive for most people. The everyday person can afford to invest in a REIT.

Investing in a REIT is known as passive investing. REITs handle investors’ liability with a varied collection of assets. Participants have the capability to unload their shares at any moment. However, REIT investors don’t have the capability to choose specific assets or locations. You are confined to the REIT’s selection of assets for investment.

Mutual funds that own shares of real estate businesses are known as real estate investment funds. The fund doesn’t hold properties — it owns shares in real estate firms. Investment funds are considered an inexpensive way to incorporate real estate properties in your appropriation of assets without unnecessary liability. Investment funds aren’t required to distribute dividends like a REIT. Like other stocks, investment funds’ values go up and drop with their share value.

You can locate a fund that specializes in a distinct category of real estate business, such as multifamily, but you can’t propose the fund’s investment properties or markets. As passive investors, fund participants are glad to permit the directors of the fund determine all investment choices.