Ultimate Rowan County Real Estate Investing Guide for 2024

BRRRR is an abbreviation of “Buy, Rehab, Rent, Refinance, Repeat”. This is a way to expand your investment assets not just own a single asset. This strategy revolves around your capability to remove money out when you refinance.

When you are done with improving the investment property, the value has to be more than your total purchase and fix-up spendings. Then you take a cash-out mortgage refinance loan that is based on the higher property worth, and you withdraw the balance. This cash is reinvested into a different property, and so on. You buy more and more houses or condos and repeatedly grow your lease income.

When an investor owns a significant portfolio of investment properties, it makes sense to hire a property manager and designate a passive income source. Discover the best Rowan County real estate management companies by browsing our directory.

Factors to Consider

Population Growth

The increase or fall of a region’s population is an accurate barometer of the market’s long-term desirability for rental property investors. When you see good population expansion, you can be certain that the region is pulling potential tenants to it. The area is attractive to companies and employees to situate, work, and raise families. This means reliable renters, greater lease income, and more potential homebuyers when you need to liquidate the asset.

Property Taxes

Property taxes, upkeep, and insurance spendings are considered by long-term rental investors for computing expenses to estimate if and how the project will work out. High expenses in these areas jeopardize your investment’s profitability. Regions with unreasonable property tax rates aren’t considered a reliable setting for short- or long-term investment and must be avoided.

Price to Rent Ratio

The price to rent ratio (p/r) is an illustration of what amount of rent can be collected compared to the market worth of the asset. If median home values are strong and median rents are small — a high p/r — it will take more time for an investment to repay your costs and attain profitability. You want to discover a low p/r to be assured that you can price your rents high enough to reach good profits.

Median Gross Rents

Median gross rents are an accurate benchmark of the desirability of a rental market under discussion. Median rents must be increasing to warrant your investment. If rents are shrinking, you can scratch that area from consideration.

Median Population Age

Median population age in a dependable long-term investment market should equal the normal worker’s age. You’ll find this to be factual in markets where people are relocating. When working-age people aren’t entering the market to replace retiring workers, the median age will go higher. That is a weak long-term financial scenario.

Employment Base Diversity

A greater number of businesses in the location will improve your chances of strong returns. If people are concentrated in a few major enterprises, even a little issue in their business might cost you a lot of renters and expand your exposure tremendously.

Unemployment Rate

It’s impossible to maintain a steady rental market when there are many unemployed residents in it. Non-working individuals will not be able to purchase products or services. The still employed workers might discover their own wages reduced. Even tenants who are employed may find it challenging to pay rent on time.

Income Rates

Median household and per capita income information is a beneficial instrument to help you navigate the places where the renters you need are located. Your investment analysis will include rental charge and asset appreciation, which will be based on wage augmentation in the community.

Number of New Jobs Created

The more jobs are consistently being provided in a region, the more stable your tenant pool will be. New jobs equal more tenants. This allows you to purchase more rental properties and replenish existing vacancies.

School Ratings

School quality in the city will have a significant influence on the local real estate market. Companies that are considering relocating want top notch schools for their workers. Moving companies bring and draw prospective tenants. Recent arrivals who purchase a home keep housing prices high. You can’t find a vibrantly growing residential real estate market without highly-rated schools.

Property Appreciation Rates

Good property appreciation rates are a necessity for a viable long-term investment. Investing in assets that you want to maintain without being sure that they will appreciate in value is a recipe for failure. Inferior or shrinking property worth in a city under examination is unacceptable.

A short-term rental is a furnished unit where a renter resides for less than one month. The nightly rental prices are typically higher in short-term rentals than in long-term rental properties. Short-term rental houses may demand more periodic upkeep and tidying.

Average short-term tenants are excursionists, home sellers who are waiting to close on their replacement home, and people traveling on business who require more than hotel accommodation. Any property owner can turn their home into a short-term rental with the services offered by online home-sharing websites like VRBO and AirBnB. This makes short-term rental strategy an easy technique to endeavor residential property investing.

Short-term rental units require dealing with tenants more often than long-term rental units. This determines that landlords handle disagreements more regularly. You may want to defend your legal exposure by hiring one of the best Rowan County law firms for real estate.

Factors to Consider

Short-Term Rental Income

First, find out how much rental income you should earn to achieve your desired profits. A quick look at an area’s present average short-term rental prices will tell you if that is a good location for your plan.

Median Property Prices

Meticulously assess the budget that you can afford to spend on additional investment assets. The median values of property will tell you if you can afford to participate in that location. You can fine-tune your property hunt by evaluating median prices in the region’s sub-markets.

Price Per Square Foot

Price per square foot can be impacted even by the look and layout of residential units. If you are looking at the same types of property, like condominiums or individual single-family homes, the price per square foot is more consistent. If you remember this, the price per sq ft may provide you a broad view of property prices.

Short-Term Rental Occupancy Rate

The ratio of short-term rental units that are presently tenanted in a market is critical information for a rental unit buyer. A high occupancy rate means that a fresh supply of short-term rentals is wanted. When the rental occupancy levels are low, there is not enough space in the market and you need to search somewhere else.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a means to calculate the profitability of an investment plan. Take your expected Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The percentage you get is your cash-on-cash return. If a project is profitable enough to return the amount invested soon, you’ll have a high percentage. If you take a loan for a fraction of the investment budget and spend less of your cash, you will get a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This metric compares investment property value to its per-annum income. High cap rates show that properties are accessible in that area for decent prices. If investment real estate properties in a city have low cap rates, they typically will cost more. Divide your estimated Net Operating Income (NOI) by the property’s market value or asking price. The percentage you get is the investment property’s cap rate.

Local Attractions

Major festivals and entertainment attractions will draw vacationers who want short-term rental houses. If an area has sites that periodically produce must-see events, like sports arenas, universities or colleges, entertainment centers, and amusement parks, it can invite people from out of town on a regular basis. Must-see vacation spots are located in mountain and coastal points, alongside waterways, and national or state nature reserves.

The fix and flip approach entails acquiring a home that demands fixing up or renovation, creating additional value by enhancing the property, and then reselling it for its full market worth. To be successful, the flipper needs to pay lower than the market value for the property and determine the amount it will cost to repair the home.

It’s critical for you to be aware of the rates homes are selling for in the area. The average number of Days On Market (DOM) for houses sold in the region is crucial. As a “house flipper”, you will have to sell the improved property without delay in order to eliminate maintenance expenses that will lower your profits.

Help determined real estate owners in locating your firm by placing your services in our catalogue of the best Rowan County home cash buyers and top Rowan County real estate investment firms.

Additionally, look for real estate bird dogs in Rowan County KY. These professionals specialize in rapidly finding good investment prospects before they come on the open market.

Factors to Consider

Median Home Price

Median home price data is a vital benchmark for evaluating a potential investment environment. When prices are high, there might not be a consistent reserve of run down residential units in the area. You want cheaper homes for a lucrative fix and flip.

If you notice a sharp drop in home market values, this may mean that there are potentially houses in the region that qualify for a short sale. Real estate investors who team with short sale specialists in Rowan County KY receive regular notices regarding potential investment real estate. Uncover more regarding this sort of investment detailed in our guide How Do You Buy a Short Sale Home?.

Property Appreciation Rate

Are property prices in the area going up, or on the way down? Fixed increase in median prices indicates a robust investment market. Unreliable value shifts are not desirable, even if it is a remarkable and unexpected surge. You could end up buying high and selling low in an hectic market.

Average Renovation Costs

You’ll want to analyze building expenses in any prospective investment market. The manner in which the local government goes about approving your plans will affect your investment too. You want to understand whether you will have to employ other experts, like architects or engineers, so you can get ready for those expenses.

Population Growth

Population data will tell you if there is solid demand for residential properties that you can sell. Flat or reducing population growth is a sign of a poor environment with not enough buyers to validate your effort.

Median Population Age

The median citizens’ age can additionally show you if there are potential home purchasers in the region. The median age in the market should be the age of the typical worker. Workforce can be the people who are qualified home purchasers. People who are about to leave the workforce or are retired have very particular residency requirements.

Unemployment Rate

While checking a community for real estate investment, look for low unemployment rates. The unemployment rate in a prospective investment city needs to be less than the national average. If it is also less than the state average, that is even more preferable. To be able to buy your improved property, your potential buyers are required to have a job, and their clients as well.

Income Rates

Median household and per capita income levels advise you if you will get adequate purchasers in that location for your residential properties. When people acquire a house, they typically have to get a loan for the purchase. Home purchasers’ capacity to take financing relies on the level of their salaries. The median income stats show you if the city is preferable for your investment efforts. You also prefer to see salaries that are growing continually. To stay even with inflation and rising building and supply costs, you should be able to regularly mark up your purchase rates.

Number of New Jobs Created

The number of jobs created on a steady basis tells whether wage and population increase are viable. A growing job market indicates that more people are confident in buying a home there. Fresh jobs also draw wage earners coming to the location from other districts, which also revitalizes the property market.

Hard Money Loan Rates

Those who purchase, renovate, and sell investment homes prefer to engage hard money instead of normal real estate funding. Hard money financing products enable these investors to pull the trigger on hot investment possibilities right away. Research Rowan County hard money lending companies and study financiers’ charges.

People who aren’t knowledgeable concerning hard money lenders can find out what they ought to learn with our guide for those who are only starting — What Is Hard Money Lending?.

In real estate wholesaling, you locate a property that investors would count as a good deal and sign a sale and purchase agreement to buy the property. A real estate investor then “buys” the purchase contract from you. The seller sells the property under contract to the real estate investor instead of the real estate wholesaler. The real estate wholesaler doesn’t sell the property under contract itself — they only sell the purchase contract.

The wholesaling form of investing involves the employment of a title insurance firm that grasps wholesale deals and is knowledgeable about and engaged in double close purchases. Find Rowan County title companies that work with investors by utilizing our directory.

To understand how real estate wholesaling works, look through our detailed article What Is Wholesaling in Real Estate Investing?. When employing this investing plan, list your company in our list of the best house wholesalers in Rowan County KY. This will help your future investor customers find and contact you.

Factors to Consider

Median Home Prices

Median home values are key to discovering cities where residential properties are selling in your investors’ price range. A place that has a substantial pool of the reduced-value investment properties that your investors need will have a lower median home price.

A quick decrease in the price of real estate might cause the swift availability of properties with more debt than value that are desired by wholesalers. Wholesaling short sale homes repeatedly carries a number of particular advantages. Nevertheless, there may be liabilities as well. Find out about this from our extensive explanation Can You Wholesale a Short Sale?. When you’re ready to begin wholesaling, look through Rowan County top short sale real estate attorneys as well as Rowan County top-rated foreclosure lawyers directories to locate the right counselor.

Property Appreciation Rate

Median home purchase price changes explain in clear detail the home value in the market. Real estate investors who plan to maintain investment properties will want to know that home purchase prices are steadily going up. Shrinking values show an equally poor leasing and housing market and will dismay real estate investors.

Population Growth

Population growth data is an important indicator that your future investors will be knowledgeable in. A growing population will have to have additional residential units. This combines both leased and resale properties. If a region is shrinking in population, it does not need more housing and investors will not look there.

Median Population Age

A vibrant housing market prefers people who start off renting, then transitioning into homeownership, and then moving up in the residential market. This requires a robust, stable workforce of individuals who feel optimistic to move up in the residential market. When the median population age is equivalent to the age of working residents, it signals a reliable housing market.

Income Rates

The median household and per capita income demonstrate steady improvement historically in areas that are ripe for real estate investment. Increases in rent and purchase prices will be supported by improving wages in the market. That will be critical to the investors you want to draw.

Unemployment Rate

Investors whom you contact to take on your contracts will deem unemployment data to be a significant bit of information. Tenants in high unemployment places have a challenging time making timely rent payments and some of them will skip payments completely. Long-term real estate investors won’t take real estate in a market like this. Real estate investors can’t depend on tenants moving up into their homes when unemployment rates are high. Short-term investors won’t take a chance on being cornered with real estate they can’t sell without delay.

Number of New Jobs Created

The frequency of fresh jobs being created in the market completes an investor’s estimation of a potential investment site. Workers move into a market that has new jobs and they need a place to live. Long-term real estate investors, like landlords, and short-term investors such as flippers, are drawn to cities with impressive job production rates.

Average Renovation Costs

Rehabilitation costs have a major effect on a real estate investor’s profit. Short-term investors, like home flippers, will not reach profitability if the purchase price and the repair expenses total to more money than the After Repair Value (ARV) of the house. Give priority status to lower average renovation costs.

Mortgage note investing involves buying debt (mortgage note) from a mortgage holder for less than the balance owed. The debtor makes remaining loan payments to the investor who has become their new lender.

When a mortgage loan is being repaid on time, it’s thought of as a performing note. Performing loans earn stable income for you. Non-performing notes can be rewritten or you could buy the property at a discount by conducting a foreclosure procedure.

Eventually, you might accrue a selection of mortgage note investments and not have the time to handle the portfolio without assistance. At that stage, you might want to use our list of Rowan County top home loan servicers and redesignate your notes as passive investments.

If you decide that this strategy is best for you, put your name in our list of Rowan County top mortgage note buyers. Showing up on our list places you in front of lenders who make desirable investment opportunities available to note buyers such as yourself.

Factors to consider

Foreclosure Rates

Performing note buyers are on lookout for areas that have low foreclosure rates. High rates could indicate opportunities for non-performing loan note investors, but they should be cautious. If high foreclosure rates are causing a weak real estate environment, it might be difficult to resell the collateral property after you seize it through foreclosure.

Foreclosure Laws

Professional mortgage note investors are fully aware of their state’s regulations for foreclosure. They will know if the state uses mortgage documents or Deeds of Trust. While using a mortgage, a court will have to allow a foreclosure. A Deed of Trust authorizes you to file a public notice and start foreclosure.

Mortgage Interest Rates

Purchased mortgage loan notes come with a negotiated interest rate. This is a big element in the investment returns that you reach. Mortgage interest rates are crucial to both performing and non-performing note buyers.

Conventional interest rates may be different by as much as a 0.25% across the country. Private loan rates can be slightly more than conventional interest rates because of the greater risk taken on by private mortgage lenders.

Mortgage note investors should consistently know the prevailing market mortgage interest rates, private and traditional, in possible mortgage note investment markets.

Demographics

When mortgage note investors are deciding on where to invest, they’ll examine the demographic dynamics from considered markets. It’s crucial to determine if an adequate number of residents in the community will continue to have reliable employment and wages in the future.
Performing note buyers look for clients who will pay without delay, generating a stable revenue flow of mortgage payments.

Note buyers who seek non-performing notes can also take advantage of strong markets. In the event that foreclosure is called for, the foreclosed property is more easily unloaded in a strong market.

Property Values

As a note investor, you will try to find borrowers that have a comfortable amount of equity. This enhances the likelihood that a potential foreclosure auction will make the lender whole. As mortgage loan payments decrease the amount owed, and the market value of the property appreciates, the borrower’s equity grows.

Property Taxes

Most homeowners pay property taxes via lenders in monthly installments when they make their loan payments. That way, the mortgage lender makes sure that the real estate taxes are taken care of when payable. If the homeowner stops performing, unless the lender pays the taxes, they won’t be paid on time. If property taxes are delinquent, the government’s lien jumps over all other liens to the head of the line and is paid first.

If property taxes keep increasing, the homeowner’s house payments also keep going up. This makes it complicated for financially weak borrowers to meet their obligations, and the loan could become past due.

Real Estate Market Strength

Both performing and non-performing mortgage note investors can succeed in an expanding real estate environment. The investors can be confident that, if need be, a foreclosed property can be sold for an amount that is profitable.

Vibrant markets often show opportunities for private investors to generate the first mortgage loan themselves. This is a profitable stream of income for accomplished investors.

A trust operating income-generating properties and that offers shares to people is a REIT — Real Estate Investment Trust. This was first conceived as a way to enable the typical person to invest in real property. Most investors currently are capable of investing in a REIT.

Participants in these trusts are totally passive investors. REITs oversee investors’ liability with a diversified group of assets. Shares may be unloaded when it is beneficial for the investor. Investors in a REIT are not able to recommend or select real estate properties for investment. You are confined to the REIT’s collection of assets for investment.

A Real Estate Investment Fund is a mutual fund that owns stocks of real estate firms. The investment assets are not held by the fund — they are possessed by the companies in which the fund invests. This is another method for passive investors to allocate their portfolio with real estate without the high startup cost or risks. Real estate investment funds are not required to distribute dividends like a REIT. The profit to investors is generated by changes in the worth of the stock.

You can select a fund that focuses on a distinct category of real estate firm, like residential, but you can’t select the fund’s investment properties or locations. As passive investors, fund members are content to allow the administration of the fund determine all investment choices.