Ultimate Putnam County Real Estate Investing Guide for 2024

The acronym BRRRR is an illustration of a long-term investment plan — Buy, Rehab, Rent, Refinance, Repeat. When you intend to expand your investments, the BRRRR is an excellent strategy to follow. It is essential that you are qualified to receive a “cash-out” mortgage refinance for the method to work.

You improve the worth of the asset beyond what you spent acquiring and renovating it. The home is refinanced using the ARV and the difference, or equity, comes to you in cash. You employ that cash to purchase another property and the procedure starts anew. This helps you to consistently add to your assets and your investment income.

When an investor holds a large portfolio of investment properties, it is wise to pay a property manager and designate a passive income stream. Find one of the best investment property management companies in Putnam County WV with the help of our comprehensive directory.

Factors to Consider

Population Growth

The rise or decline of the population can indicate whether that region is interesting to rental investors. An expanding population typically signals ongoing relocation which equals new renters. Employers view this as an appealing community to situate their enterprise, and for employees to situate their families. This equates to dependable renters, more lease revenue, and more potential homebuyers when you want to liquidate the property.

Property Taxes

Real estate taxes, ongoing upkeep expenditures, and insurance directly impact your profitability. Steep property taxes will decrease a real estate investor’s returns. If property taxes are too high in a given area, you will want to search in another place.

Price to Rent Ratio

Price to rent ratio (p/r) is a market signal that informs you the amount you can predict to charge for rent. An investor can not pay a large sum for a property if they can only collect a limited rent not enabling them to repay the investment within a suitable timeframe. A large p/r tells you that you can set modest rent in that location, a lower ratio shows that you can demand more.

Median Gross Rents

Median gross rents show whether an area’s rental market is strong. Look for a steady rise in median rents year over year. Dropping rents are a bad signal to long-term rental investors.

Median Population Age

The median residents’ age that you are hunting for in a favorable investment environment will be close to the age of working people. If people are migrating into the area, the median age will not have a problem staying in the range of the labor force. If working-age people aren’t entering the market to take over from retiring workers, the median age will go higher. This isn’t promising for the forthcoming economy of that location.

Employment Base Diversity

Having a variety of employers in the locality makes the market less unpredictable. When the citizens are concentrated in a few significant enterprises, even a slight interruption in their operations might cause you to lose a lot of tenants and expand your risk substantially.

Unemployment Rate

High unemployment means a lower number of tenants and an uncertain housing market. Non-working individuals can’t purchase products or services. This can result in a high amount of dismissals or shorter work hours in the community. Remaining renters may become late with their rent in these conditions.

Income Rates

Median household and per capita income will hint if the tenants that you are looking for are residing in the community. Improving salaries also inform you that rental payments can be adjusted over your ownership of the rental home.

Number of New Jobs Created

A growing job market provides a consistent flow of tenants. The individuals who take the new jobs will require housing. This enables you to purchase more lease real estate and fill existing vacancies.

School Ratings

School rankings in the district will have a big influence on the local real estate market. Businesses that are considering moving want good schools for their workers. Reliable tenants are the result of a steady job market. Recent arrivals who purchase a home keep real estate prices high. You will not run into a dynamically growing housing market without good schools.

Property Appreciation Rates

The basis of a long-term investment approach is to keep the asset. You have to make sure that the chances of your investment increasing in market worth in that location are likely. You don’t want to spend any time reviewing communities showing below-standard property appreciation rates.

A short-term rental is a furnished apartment or house where a renter lives for less than four weeks. Long-term rental units, like apartments, charge lower rental rates per night than short-term ones. Because of the high number of tenants, short-term rentals involve more regular maintenance and sanitation.

Short-term rentals appeal to people on a business trip who are in the region for a couple of nights, people who are relocating and want short-term housing, and sightseers. House sharing websites like AirBnB and VRBO have encouraged countless real estate owners to join in the short-term rental business. This makes short-term rentals a convenient approach to endeavor real estate investing.

Short-term rentals require engaging with tenants more repeatedly than long-term ones. Because of this, landlords manage problems regularly. You may want to protect your legal exposure by working with one of the best Putnam County law firms for real estate.

Factors to Consider

Short-Term Rental Income

First, figure out the amount of rental revenue you should earn to achieve your desired profits. An area’s short-term rental income levels will quickly reveal to you if you can expect to reach your projected income figures.

Median Property Prices

Meticulously compute the budget that you want to spare for additional investment properties. The median values of property will show you whether you can afford to participate in that market. You can also use median values in targeted sections within the market to choose cities for investment.

Price Per Square Foot

Price per sq ft gives a basic picture of values when considering similar units. When the designs of available properties are very different, the price per square foot might not help you get a precise comparison. Price per sq ft may be a fast method to compare several sub-markets or properties.

Short-Term Rental Occupancy Rate

A look at the location’s short-term rental occupancy rate will tell you if there is demand in the district for additional short-term rental properties. When almost all of the rental units are filled, that city needs more rental space. Weak occupancy rates communicate that there are more than enough short-term rentals in that location.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will tell you if the purchase is a good use of your money. Take your expected Net Operating Income (NOI) and divide it by your investment cash budget. The percentage you get is your cash-on-cash return. The higher it is, the sooner your investment funds will be repaid and you’ll begin generating profits. When you get financing for a portion of the investment and put in less of your own cash, you will get a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) levels are commonly used by real estate investors to assess the worth of rental properties. High cap rates mean that income-producing assets are available in that area for decent prices. When investment properties in a city have low cap rates, they generally will cost more money. Divide your estimated Net Operating Income (NOI) by the property’s value or purchase price. This shows you a percentage that is the year-over-year return, or cap rate.

Local Attractions

Important public events and entertainment attractions will entice visitors who need short-term housing. If an area has sites that regularly hold interesting events, like sports stadiums, universities or colleges, entertainment venues, and theme parks, it can draw visitors from out of town on a regular basis. Must-see vacation attractions are found in mountain and coastal points, along waterways, and national or state parks.

When an investor purchases a property below market worth, fixes it so that it becomes more valuable, and then disposes of the property for a profit, they are referred to as a fix and flip investor. Your assessment of rehab costs must be precise, and you should be capable of buying the house for less than market price.

It’s critical for you to figure out how much homes are being sold for in the city. You always have to investigate the amount of time it takes for listings to close, which is illustrated by the Days on Market (DOM) metric. To effectively “flip” a property, you must sell the renovated home before you are required to shell out capital maintaining it.

To help motivated residence sellers locate you, list your business in our lists of cash house buyers in Putnam County WV and real estate investment companies in Putnam County WV.

Additionally, coordinate with Putnam County property bird dogs. Professionals found here will help you by quickly locating conceivably lucrative deals ahead of the projects being marketed.

Factors to Consider

Median Home Price

The location’s median home price should help you determine a good neighborhood for flipping houses. You’re seeking for median prices that are modest enough to suggest investment opportunities in the region. This is a critical component of a cost-effective rehab and resale project.

When you see a fast decrease in property values, this could mean that there are potentially homes in the city that qualify for a short sale. Real estate investors who work with short sale negotiators in Putnam County WV receive regular notifications about potential investment properties. You’ll learn additional information about short sales in our extensive blog post ⁠— How to Buy a Pre-Foreclosure Short Sale Home?.

Property Appreciation Rate

The shifts in real estate values in a location are very important. Predictable increase in median prices reveals a vibrant investment environment. Rapid market worth growth can show a value bubble that is not practical. You may wind up purchasing high and selling low in an unpredictable market.

Average Renovation Costs

A careful review of the area’s building costs will make a huge influence on your area selection. The time it requires for getting permits and the local government’s rules for a permit request will also affect your decision. To make an on-target financial strategy, you’ll need to understand whether your construction plans will be required to involve an architect or engineer.

Population Growth

Population growth is a good indicator of the potential or weakness of the region’s housing market. When the population is not increasing, there is not going to be an ample pool of homebuyers for your houses.

Median Population Age

The median citizens’ age can additionally show you if there are adequate homebuyers in the region. It mustn’t be less or more than the age of the typical worker. A high number of such people demonstrates a substantial source of homebuyers. The needs of retirees will probably not be a part of your investment project strategy.

Unemployment Rate

If you run across a community demonstrating a low unemployment rate, it’s a good indicator of good investment possibilities. It should certainly be lower than the US average. A very good investment area will have an unemployment rate lower than the state’s average. In order to acquire your fixed up property, your potential buyers need to be employed, and their customers as well.

Income Rates

The residents’ wage levels can tell you if the region’s economy is stable. Most people have to get a loan to buy a house. Homebuyers’ capacity to be given a loan depends on the level of their wages. Median income can help you analyze whether the regular home purchaser can afford the houses you plan to sell. You also want to have salaries that are improving continually. To stay even with inflation and rising building and material expenses, you should be able to periodically raise your prices.

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 receptive to buying a house there. Additional jobs also attract workers migrating to the city from elsewhere, which additionally strengthens the local market.

Hard Money Loan Rates

Those who buy, rehab, and liquidate investment homes prefer to employ hard money instead of normal real estate loans. This plan lets them complete lucrative projects without delay. Discover hard money loan companies in Putnam County WV and contrast their rates.

Those who aren’t knowledgeable in regard to hard money loans can find out what they need to understand with our article for newbie investors — How Do Hard Money Loans Work?.

Wholesaling is a real estate investment strategy that requires locating residential properties that are appealing to investors and signing a purchase contract. A real estate investor then “buys” the sale and purchase agreement from you. The property under contract is sold to the investor, not the wholesaler. The real estate wholesaler does not sell the property itself — they just sell the purchase and sale agreement.

The wholesaling mode of investing involves the engagement of a title firm that comprehends wholesale transactions and is knowledgeable about and active in double close deals. Locate title companies that specialize in real estate property investments in Putnam County WV in our directory.

To learn how real estate wholesaling works, read our informative guide What Is Wholesaling in Real Estate Investing?. As you conduct your wholesaling activities, put your company in HouseCashin’s directory of Putnam County top home wholesalers. This will allow any potential clients to discover you and initiate a contact.

Factors to Consider

Median Home Prices

Median home prices in the area will show you if your required purchase price level is achievable in that market. Since real estate investors want properties that are on sale for less than market price, you will have to find lower median prices as an indirect tip on the possible availability of properties that you could purchase for below market value.

A quick depreciation in the price of property might cause the sudden appearance of properties with owners owing more than market worth that are hunted by wholesalers. Wholesaling short sale homes frequently brings a number of particular benefits. Nonetheless, there might be risks as well. Find out about this from our detailed article How Can You Wholesale a Short Sale Property?. When you’re keen to begin wholesaling, hunt through Putnam County top short sale law firms as well as Putnam County top-rated real estate foreclosure attorneys lists to find the best counselor.

Property Appreciation Rate

Median home value changes clearly illustrate the housing value in the market. Some real estate investors, including buy and hold and long-term rental investors, notably need to know that home values in the community are expanding over time. A shrinking median home value will show a vulnerable leasing and home-buying market and will disappoint all types of real estate investors.

Population Growth

Population growth figures are something that investors will consider carefully. An increasing population will require new residential units. This involves both rental and ‘for sale’ real estate. A location that has a declining population will not interest the real estate investors you require to buy your contracts.

Median Population Age

A preferable residential real estate market for investors is strong in all areas, including tenants, who turn into home purchasers, who transition into more expensive real estate. A city with a big employment market has a consistent supply of renters and purchasers. When the median population age equals the age of employed adults, it demonstrates a reliable property market.

Income Rates

The median household and per capita income in a strong real estate investment market need to be improving. Income increment demonstrates a market that can manage rent and home price raises. Real estate investors need this if they are to meet their anticipated profits.

Unemployment Rate

Real estate investors whom you contact to buy your sale contracts will regard unemployment figures to be a key bit of information. Delayed rent payments and default rates are widespread in locations with high unemployment. Long-term real estate investors who depend on steady rental payments will suffer in these markets. High unemployment creates poverty that will keep people from buying a home. This makes it tough to locate fix and flip real estate investors to acquire your purchase agreements.

Number of New Jobs Created

The number of more jobs being produced in the region completes an investor’s assessment of a future investment location. More jobs generated lead to more employees who need homes to rent and buy. Whether your client base is made up of long-term or short-term investors, they will be drawn to a place with stable job opening creation.

Average Renovation Costs

Updating expenses have a strong impact on a flipper’s returns. Short-term investors, like house flippers, won’t earn anything when the purchase price and the improvement expenses equal to more money than the After Repair Value (ARV) of the property. The less you can spend to fix up a unit, the more lucrative the community is for your prospective purchase agreement buyers.

This strategy means buying debt (mortgage note) from a mortgage holder for less than the balance owed. When this occurs, the investor becomes the client’s mortgage lender.

Performing notes mean mortgage loans where the homeowner is regularly current on their loan payments. They give you long-term passive income. Non-performing notes can be re-negotiated or you may acquire the property at a discount by conducting a foreclosure procedure.

Ultimately, you could have a large number of mortgage notes and have a hard time finding additional time to oversee them on your own. In this event, you can opt to employ one of residential mortgage servicers in Putnam County WV that would essentially convert your investment into passive cash flow.

When you find that this model is a good fit for you, place your company in our list of Putnam County top promissory note buyers. Showing up on our list places you in front of lenders who make profitable investment opportunities available to note investors such as yourself.

Factors to consider

Foreclosure Rates

Note investors hunting for current mortgage loans to acquire will hope to find low foreclosure rates in the community. Non-performing note investors can carefully make use of locations that have high foreclosure rates as well. The locale needs to be robust enough so that note investors can foreclose and get rid of collateral properties if called for.

Foreclosure Laws

It is important for mortgage note investors to understand the foreclosure laws in their state. They will know if the state uses mortgages or Deeds of Trust. With a mortgage, a court will have to allow a foreclosure. A Deed of Trust permits you to file a public notice and continue to foreclosure.

Mortgage Interest Rates

Note investors take over the interest rate of the loan notes that they buy. That rate will unquestionably influence your profitability. Interest rates influence the strategy of both sorts of note investors.

Conventional interest rates may differ by up to a quarter of a percent throughout the country. Private loan rates can be slightly higher than traditional interest rates because of the more significant risk taken on by private mortgage lenders.

Note investors should consistently know the present local mortgage interest rates, private and traditional, in possible investment markets.

Demographics

An effective note investment strategy incorporates a review of the market by using demographic data. The city’s population growth, unemployment rate, employment market growth, pay standards, and even its median age contain important information for you.
Performing note buyers want borrowers who will pay on time, generating a repeating revenue flow of loan payments.

The same area might also be good for non-performing mortgage note investors and their end-game plan. A vibrant regional economy is prescribed if they are to find buyers for properties they’ve foreclosed on.

Property Values

The greater the equity that a homebuyer has in their property, the more advantageous it is for the mortgage loan holder. If you have to foreclose on a mortgage loan without much equity, the foreclosure sale might not even repay the balance invested in the note. Rising property values help improve the equity in the house as the homeowner pays down the amount owed.

Property Taxes

Normally, lenders accept the property taxes from the homebuyer each month. When the taxes are due, there needs to be adequate funds being held to pay them. If the homeowner stops paying, unless the note holder remits the taxes, they won’t be paid on time. Tax liens go ahead of all other liens.

If a municipality has a history of increasing tax rates, the total home payments in that community are constantly expanding. Borrowers who have trouble affording their mortgage payments might drop farther behind and eventually default.

Real Estate Market Strength

An active real estate market having good value appreciation is beneficial for all categories of note buyers. It’s critical to understand that if you need to foreclose on a collateral, you won’t have trouble getting a good price for the property.

A strong market can also be a potential environment for initiating mortgage notes. This is a strong stream of revenue for successful investors.

Some real estate investment businesses are built as a trust termed Real Estate Investment Trusts or REITs. This was first done as a method to permit the regular investor to invest in real estate. REIT shares are affordable for the majority of investors.

Participants in real estate investment trusts are completely passive investors. REITs manage investors’ liability with a diversified group of assets. Shares in a REIT may be liquidated whenever it’s convenient for the investor. But REIT investors do not have the ability to select particular assets or markets. You are restricted to the REIT’s selection of properties for investment.

Real estate investment funds are basically mutual funds that specialize in real estate businesses, including REITs. The investment real estate properties aren’t possessed by the fund — they are owned by the firms the fund invests in. Investment funds are an affordable way to combine real estate properties in your appropriation of assets without unnecessary risks. Funds aren’t required to distribute dividends like a REIT. The worth of a fund to someone is the expected appreciation of the value of the fund’s shares.

Investors may choose a fund that focuses on particular segments of the real estate industry but not particular markets for each real estate investment. Your decision as an investor is to choose a fund that you rely on to supervise your real estate investments.