Ultimate Raleigh County Real Estate Investing Guide for 2024

BRRRR stands for “Buy, Rehab, Rent, Refinance, Repeat”. This is a plan to increase your investment assets not just own a single income generating property. A vital part of this formula is to be able to take a “cash-out” mortgage refinance.

When you have finished renovating the home, its value should be higher than your total purchase and rehab expenses. The rental is refinanced using the ARV and the difference, or equity, is given to you in cash. You use that cash to purchase an additional asset and the operation starts again. You acquire more and more houses or condos and continually grow your lease revenues.

If your investment property portfolio is substantial enough, you can outsource its oversight and enjoy passive cash flow. Locate Raleigh County investment property management companies when you look through our list of professionals.

Factors to Consider

Population Growth

The increase or fall of the population can tell you whether that city is interesting to rental investors. If the population increase in a community is robust, then new tenants are likely relocating into the area. Employers consider such a region as promising community to situate their company, and for employees to situate their households. Rising populations grow a reliable tenant reserve that can afford rent raises and homebuyers who help keep your property values high.

Property Taxes

Real estate taxes, just like insurance and maintenance costs, can vary from place to place and must be looked at carefully when assessing possible returns. Unreasonable property tax rates will decrease a real estate investor’s income. If property tax rates are too high in a specific market, you will want to look somewhere else.

Price to Rent Ratio

The price to rent ratio (p/r) is a clue to what amount of rent can be demanded compared to the market worth of the asset. The rate you can demand in a location will define the amount you are able to pay based on the number of years it will take to repay those funds. The less rent you can demand the higher the price-to-rent ratio, with a low p/r signalling a more robust rent market.

Median Gross Rents

Median gross rents are a specific barometer of the acceptance of a lease market under discussion. You are trying to find a market with stable median rent growth. Reducing rents are an alert to long-term investor landlords.

Median Population Age

Median population age in a strong long-term investment market must mirror the usual worker’s age. If people are migrating into the area, the median age will have no challenge staying at the level of the employment base. A high median age means that the existing population is leaving the workplace without being replaced by younger workers relocating there. This is not promising for the impending financial market of that city.

Employment Base Diversity

Having a variety of employers in the locality makes the market less volatile. When there are only one or two dominant employers, and either of such relocates or closes down, it can lead you to lose paying customers and your real estate market rates to plunge.

Unemployment Rate

It’s impossible to maintain a reliable rental market when there is high unemployment. Otherwise profitable companies lose customers when other employers lay off employees. This can cause increased retrenchments or shrinking work hours in the market. Even people who are employed may find it tough to pay rent on time.

Income Rates

Median household and per capita income information is a helpful tool to help you pinpoint the communities where the tenants you want are located. Current income statistics will reveal to you if income raises will enable you to mark up rental rates to achieve your income calculations.

Number of New Jobs Created

An expanding job market produces a consistent pool of renters. A larger amount of jobs equal a higher number of tenants. Your strategy of renting and buying more assets needs an economy that will provide new jobs.

School Ratings

Local schools will cause a significant effect on the real estate market in their locality. When a business assesses a region for potential expansion, they know that first-class education is a necessity for their workers. Relocating businesses bring and draw prospective renters. Homeowners who come to the region have a beneficial impact on home prices. Highly-rated schools are a key requirement for a robust property investment market.

Property Appreciation Rates

Property appreciation rates are an important ingredient of your long-term investment approach. You have to see that the chances of your property going up in price in that city are strong. Inferior or dropping property worth in a community under evaluation is not acceptable.

A furnished residence where tenants stay for shorter than 30 days is referred to as a short-term rental. Short-term rental owners charge a higher rate per night than in long-term rental business. These properties might require more periodic repairs and cleaning.

Short-term rentals appeal to individuals traveling for business who are in the area for a couple of nights, people who are moving and want temporary housing, and holidaymakers. House sharing portals such as AirBnB and VRBO have encouraged numerous real estate owners to join in the short-term rental industry. Short-term rentals are regarded as a smart method to jumpstart investing in real estate.

Short-term rental unit owners require working one-on-one with the occupants to a greater extent than the owners of annually rented properties. That dictates that property owners face disagreements more often. Think about defending yourself and your assets by adding any of real estate law experts in Raleigh County WV to your team of professionals.

Factors to Consider

Short-Term Rental Income

You have to find the range of rental revenue you’re aiming for based on your investment calculations. An area’s short-term rental income levels will promptly tell you if you can assume to accomplish your estimated rental income levels.

Median Property Prices

When purchasing property for short-term rentals, you need to know how much you can pay. To see if a city has opportunities for investment, study the median property prices. You can tailor your real estate hunt by analyzing median market worth in the community’s sub-markets.

Price Per Square Foot

Price per square foot can be impacted even by the style and floor plan of residential units. A house with open entrances and high ceilings can’t be contrasted with a traditional-style property with larger floor space. It may be a fast way to gauge several communities or residential units.

Short-Term Rental Occupancy Rate

The ratio of short-term rental units that are currently occupied in a city is vital information for an investor. A location that requires additional rental units will have a high occupancy level. When the rental occupancy levels are low, there is not enough need in the market and you need to explore somewhere else.

Short-Term Rental Cash-on-Cash Return

To determine if you should put your cash in a particular investment asset or location, calculate the cash-on-cash return. Take your projected Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The resulting percentage is your cash-on-cash return. High cash-on-cash return shows that you will recoup your investment more quickly and the purchase will earn more profit. Funded projects will have a higher cash-on-cash return because you are utilizing less of your cash.

Average Short-Term Rental Capitalization (Cap) Rates

This criterion compares rental property worth to its yearly revenue. High cap rates show that rental units are available in that location for decent prices. Low cap rates reflect more expensive properties. The cap rate is determined by dividing the Net Operating Income (NOI) by the asking price or market value. The percentage you will get is the property’s cap rate.

Local Attractions

Short-term rental properties are desirable in locations where tourists are drawn by activities and entertainment sites. Tourists go to specific cities to watch academic and athletic activities at colleges and universities, see competitions, cheer for their children as they compete in kiddie sports, have fun at annual festivals, and stop by amusement parks. At particular times of the year, locations with outdoor activities in mountainous areas, seaside locations, or alongside rivers and lakes will draw crowds of visitors who need short-term rentals.

The fix and flip approach involves acquiring a property that requires improvements or rebuilding, putting added value by enhancing the property, and then liquidating it for a better market price. Your estimate of rehab costs must be precise, and you should be able to buy the house below market value.

It’s crucial for you to know what properties are selling for in the community. Find a region that has a low average Days On Market (DOM) metric. To effectively “flip” real estate, you need to resell the renovated house before you are required to shell out capital to maintain it.

Help compelled property owners in finding your firm by featuring your services in our catalogue of Raleigh County companies that buy homes for cash and top Raleigh County real estate investment firms.

Additionally, work with Raleigh County property bird dogs. These experts concentrate on rapidly discovering profitable investment prospects before they come on the marketplace.

Factors to Consider

Median Home Price

The region’s median home price could help you determine a desirable community for flipping houses. If purchase prices are high, there may not be a consistent supply of run down houses in the area. This is a necessary ingredient of a fix and flip market.

When your examination entails a rapid decrease in home market worth, it might be a signal that you’ll find real property that meets the short sale requirements. Investors who partner with short sale negotiators in Raleigh County WV receive regular notifications about possible investment real estate. You’ll find valuable data about short sales in our extensive blog post ⁠— What Does Short Sale Mean in Buying a House?.

Property Appreciation Rate

Are property values in the region moving up, or moving down? You want a region where real estate prices are regularly and continuously ascending. Speedy property value growth could show a market value bubble that isn’t practical. You could end up purchasing high and liquidating low in an unsustainable market.

Average Renovation Costs

A careful analysis of the region’s renovation expenses will make a huge influence on your market choice. The time it takes for getting permits and the local government’s regulations for a permit request will also influence your plans. If you have to show a stamped suite of plans, you’ll need to include architect’s rates in your expenses.

Population Growth

Population increase figures allow you to take a peek at housing need in the region. Flat or declining population growth is an indication of a sluggish market with not enough purchasers to justify your risk.

Median Population Age

The median citizens’ age is a clear indication of the presence of potential homebuyers. The median age should not be less or more than the age of the average worker. Workers are the individuals who are probable homebuyers. Individuals who are planning to leave the workforce or are retired have very restrictive housing needs.

Unemployment Rate

You need to see a low unemployment rate in your considered location. It must certainly be less than the country’s average. If it is also lower than the state average, it’s much more preferable. In order to buy your renovated property, your potential clients need to work, and their clients too.

Income Rates

Median household and per capita income are an important indicator of the stability of the home-buying conditions in the community. The majority of people who purchase a house need a mortgage loan. Homebuyers’ ability to take financing depends on the level of their wages. Median income can let you know whether the typical home purchaser can buy the homes you are going to sell. Scout for locations where wages are rising. When you need to raise the purchase price of your houses, you have to be positive that your homebuyers’ income is also improving.

Number of New Jobs Created

Knowing how many jobs are generated each year in the region adds to your assurance in a region’s investing environment. A larger number of citizens acquire homes when their community’s financial market is creating jobs. With additional jobs created, new potential buyers also relocate to the area from other cities.

Hard Money Loan Rates

Short-term real estate investors normally employ hard money loans instead of typical loans. This enables investors to quickly buy desirable real estate. Locate the best hard money lenders in Raleigh County WV so you may compare their fees.

Someone who wants to learn about hard money financing products can find what they are and the way to utilize them by studying our resource for newbies titled How to Use Hard Money Lenders.

As a real estate wholesaler, you enter a purchase contract to purchase a house that some other investors will want. When an investor who approves of the property is found, the purchase contract is sold to them for a fee. The owner sells the home to the investor not the wholesaler. The real estate wholesaler does not sell the property — they sell the rights to buy it.

This strategy involves employing a title company that is experienced in the wholesale purchase and sale agreement assignment procedure and is able and willing to manage double close transactions. Locate title companies that specialize in real estate property investments in Raleigh County WV on our list.

To understand how wholesaling works, study our insightful article Complete Guide to Real Estate Wholesaling as an Investment Strategy. When following this investing strategy, add your firm in our directory of the best home wholesalers in Raleigh County WV. This will help your future investor buyers discover and call you.

Factors to Consider

Median Home Prices

Median home prices in the region will tell you if your required purchase price point is viable in that city. Below average median purchase prices are a good indicator that there are plenty of houses that might be purchased for lower than market value, which real estate investors have to have.

Accelerated weakening in real property market values might result in a supply of real estate with no equity that appeal to short sale flippers. This investment method often brings multiple uncommon perks. Nevertheless, there might be liabilities as well. Obtain more information on how to wholesale a short sale property in our thorough explanation. If you decide to give it a try, make certain you have one of short sale attorneys in Raleigh County WV and foreclosure attorneys in Raleigh County WV to work with.

Property Appreciation Rate

Median home price dynamics are also important. Many investors, like buy and hold and long-term rental investors, specifically want to find that residential property values in the market are going up steadily. Both long- and short-term real estate investors will ignore a region where home purchase prices are going down.

Population Growth

Population growth data is critical for your intended purchase contract purchasers. If they realize the population is growing, they will decide that new housing units are required. Investors understand that this will involve both rental and owner-occupied housing units. A region with a dropping community will not interest the real estate investors you require to purchase your contracts.

Median Population Age

A lucrative housing market for investors is agile in all areas, notably tenants, who become homeowners, who move up into more expensive real estate. This needs a robust, constant labor force of citizens who feel optimistic enough to shift up in the real estate market. A city with these features will show a median population age that mirrors the wage-earning adult’s age.

Income Rates

The median household and per capita income will be rising in a friendly residential market that real estate investors want to work in. Increases in rent and sale prices must be backed up by rising salaries in the region. Investors need this in order to reach their estimated profits.

Unemployment Rate

Real estate investors will carefully evaluate the community’s unemployment rate. Tenants in high unemployment cities have a difficult time paying rent on schedule and a lot of them will skip payments altogether. Long-term investors will not take a house in an area like this. Renters can’t level up to property ownership and existing owners can’t put up for sale their property and shift up to a bigger house. This is a problem for short-term investors purchasing wholesalers’ agreements to rehab and resell a property.

Number of New Jobs Created

Learning how soon additional employment opportunities are created in the area can help you find out if the home is situated in a stable housing market. Workers settle in a community that has additional jobs and they need housing. Long-term investors, like landlords, and short-term investors which include flippers, are attracted to cities with consistent job creation rates.

Average Renovation Costs

Rehab expenses will be important to most real estate investors, as they usually acquire low-cost rundown properties to fix. Short-term investors, like home flippers, don’t make a profit when the price and the rehab expenses equal to a larger sum than the After Repair Value (ARV) of the home. Give priority status to lower average renovation costs.

This strategy includes purchasing a loan (mortgage note) from a mortgage holder at a discount. The borrower makes remaining payments to the note investor who has become their current lender.

Loans that are being repaid as agreed are thought of as performing notes. Performing loans bring consistent revenue for investors. Some mortgage note investors buy non-performing notes because if they cannot successfully rework the mortgage, they can always purchase the collateral at foreclosure for a below market amount.

One day, you could have a large number of mortgage notes and necessitate more time to oversee them by yourself. At that time, you might need to utilize our list of Raleigh County top third party mortgage servicers and reclassify your notes as passive investments.

If you find that this plan is ideal for you, place your company in our list of Raleigh County top real estate note buyers. When you’ve done this, you will be discovered by the lenders who market desirable investment notes for procurement by investors such as you.

Factors to consider

Foreclosure Rates

Mortgage note investors looking for stable-performing loans to acquire will want to uncover low foreclosure rates in the market. Non-performing loan investors can carefully take advantage of locations that have high foreclosure rates too. If high foreclosure rates are causing an underperforming real estate market, it might be challenging to liquidate the collateral property after you foreclose on it.

Foreclosure Laws

It’s important for mortgage note investors to study the foreclosure regulations in their state. Are you faced with a Deed of Trust or a mortgage? You might have to receive the court’s approval to foreclose on a house. You merely need to file a notice and initiate foreclosure steps if you’re utilizing a Deed of Trust.

Mortgage Interest Rates

Note investors acquire the interest rate of the loan notes that they obtain. This is a major determinant in the returns that you earn. Interest rates are important to both performing and non-performing note buyers.

The mortgage loan rates quoted by traditional mortgage firms aren’t equal in every market. The stronger risk taken on by private lenders is shown in bigger mortgage loan interest rates for their mortgage loans compared to conventional loans.

Successful investors continuously check the mortgage interest rates in their region set by private and traditional mortgage firms.

Demographics

A city’s demographics trends assist mortgage note buyers to focus their work and effectively use their resources. Investors can interpret a great deal by estimating the extent of the population, how many citizens are employed, the amount they make, and how old the people are.
Investors who prefer performing notes search for communities where a lot of younger people hold higher-income jobs.

Non-performing mortgage note purchasers are reviewing comparable factors for other reasons. A vibrant regional economy is required if investors are to find homebuyers for properties on which they have foreclosed.

Property Values

The greater the equity that a borrower has in their home, the more advantageous it is for their mortgage loan holder. This improves the chance that a possible foreclosure auction will make the lender whole. As mortgage loan payments decrease the balance owed, and the market value of the property increases, the homeowner’s equity grows.

Property Taxes

Many borrowers pay property taxes through mortgage lenders in monthly portions together with their loan payments. When the property taxes are due, there should be sufficient payments being held to handle them. If the homebuyer stops paying, unless the loan owner remits the property taxes, they will not be paid on time. If taxes are past due, the municipality’s lien supersedes any other liens to the head of the line and is satisfied first.

If a community has a record of rising tax rates, the combined home payments in that community are regularly growing. Delinquent customers might not have the ability to keep up with increasing mortgage loan payments and could cease making payments altogether.

Real Estate Market Strength

Both performing and non-performing mortgage note investors can work in a vibrant real estate environment. It is important to understand that if you are required to foreclose on a property, you won’t have trouble obtaining an appropriate price for the collateral property.

A vibrant real estate market can also be a good area for making mortgage notes. For veteran investors, this is a profitable part of their business plan.

A trust that owns income-generating real estate properties and that offers shares to investors is a REIT — Real Estate Investment Trust. This was initially conceived as a way to permit the ordinary person to invest in real estate. The typical person is able to come up with the money to invest in a REIT.

Participants in such organizations are totally passive investors. REITs manage investors’ risk with a diversified selection of assets. Participants have the ability to liquidate their shares at any time. But REIT investors do not have the ability to pick particular real estate properties or locations. The assets that the REIT decides to purchase are the properties you invest in.

Real estate investment funds are essentially mutual funds concentrating on real estate firms, including REITs. Any actual real estate property is owned by the real estate businesses rather than the fund. This is an additional method for passive investors to diversify their investments with real estate without the high entry-level investment or liability. Real estate investment funds are not obligated to distribute dividends unlike a REIT. The value of a fund to an investor is the anticipated appreciation of the worth of its shares.

You may pick a fund that concentrates on specific categories of the real estate industry but not specific areas for individual real estate investment. You must rely on the fund’s managers to select which markets and real estate properties are selected for investment.