Ultimate San Juan County Real Estate Investing Guide for 2024

The abbreviation BRRRR is an illustration of a long-term rental plan — Buy, Rehab, Rent, Refinance, Repeat. This is a way to increase your investment assets rather than acquire one income generating property. It is critical that you be able to do a “cash-out” refinance for the method to be successful.

When you have concluded renovating the home, its market value should be higher than your complete purchase and fix-up spendings. After that, you pocket the equity you produced from the property in a “cash-out” refinance. You buy your next asset with the cash-out amount and begin all over again. This program assists you to steadily increase your portfolio and your investment revenue.

When your investment real estate portfolio is big enough, you can contract out its management and get passive income. Find good San Juan County property management companies by browsing our list.

Factors to Consider

Population Growth

The growth or fall of an area’s population is a valuable gauge of the region’s long-term appeal for rental investors. An increasing population usually indicates active relocation which means additional renters. Moving businesses are drawn to increasing regions offering reliable jobs to households who relocate there. A growing population builds a steady base of tenants who can handle rent raises, and a vibrant property seller’s market if you need to unload any assets.

Property Taxes

Property taxes, similarly to insurance and upkeep spendings, may be different from place to place and must be reviewed cautiously when assessing possible returns. High expenditures in these categories threaten your investment’s returns. If property taxes are unreasonable in a particular area, you probably prefer to look in another place.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property values and median lease rates that will show you how high of a rent the market can handle. If median real estate values are strong and median rents are small — a high p/r — it will take longer for an investment to repay your costs and achieve good returns. The less rent you can collect the higher the p/r, with a low p/r indicating a better rent market.

Median Gross Rents

Median gross rents are a true barometer of the acceptance of a rental market under examination. Hunt for a stable rise in median rents over time. If rents are declining, you can scratch that area from consideration.

Median Population Age

Median population age will be nearly the age of a normal worker if a region has a consistent supply of tenants. If people are resettling into the city, the median age will not have a challenge staying at the level of the employment base. When working-age people aren’t entering the area to succeed retiring workers, the median age will rise. That is a weak long-term economic scenario.

Employment Base Diversity

A higher supply of employers in the market will improve your prospects for strong profits. If working individuals are employed by only several significant enterprises, even a little interruption in their operations might cost you a great deal of tenants and increase your exposure enormously.

Unemployment Rate

You can’t reap the benefits of a steady rental cash flow in a region with high unemployment. Non-working individuals cannot purchase products or services. Workers who still keep their jobs may discover their hours and salaries decreased. This could increase the instances of delayed rent payments and renter defaults.

Income Rates

Median household and per capita income data is a valuable instrument to help you discover the areas where the renters you are looking for are located. Your investment calculations will take into consideration rental rate and property appreciation, which will rely on salary raise in the city.

Number of New Jobs Created

The more jobs are constantly being generated in a city, the more stable your tenant supply will be. A larger amount of jobs mean new tenants. Your objective of renting and purchasing more properties needs an economy that will provide new jobs.

School Ratings

Local schools can have a major impact on the real estate market in their neighborhood. Employers that are considering relocating require good schools for their workers. Relocating employers bring and draw prospective tenants. Home market values benefit with new workers who are homebuyers. You can’t run into a dynamically expanding residential real estate market without good schools.

Property Appreciation Rates

The basis of a long-term investment strategy is to keep the investment property. You have to be certain that your assets will rise in market value until you want to liquidate them. Low or dropping property value in a market under evaluation is unacceptable.

A furnished apartment where tenants reside for less than a month is called a short-term rental. The per-night rental prices are normally higher in short-term rentals than in long-term units. Because of the increased number of renters, short-term rentals require additional frequent maintenance and tidying.

Normal short-term tenants are excursionists, home sellers who are in-between homes, and people traveling for business who prefer a more homey place than hotel accommodation. House sharing sites such as AirBnB and VRBO have helped a lot of residential property owners to take part in the short-term rental business. A simple way to enter real estate investing is to rent a condo or house you already keep for short terms.

The short-term rental housing venture involves interaction with tenants more frequently in comparison with annual rental properties. That determines that property owners deal with disagreements more regularly. Consider managing your exposure with the support of one of the good real estate lawyers in San Juan County UT.

Factors to Consider

Short-Term Rental Income

You should determine how much revenue has to be created to make your investment profitable. An area’s short-term rental income rates will promptly tell you if you can assume to reach your projected rental income range.

Median Property Prices

You also have to decide the budget you can spare to invest. The median price of property will show you whether you can manage to invest in that community. You can adjust your property hunt by analyzing median market worth in the region’s sub-markets.

Price Per Square Foot

Price per sq ft can be impacted even by the style and layout of residential properties. If you are comparing the same kinds of real estate, like condominiums or detached single-family residences, the price per square foot is more consistent. It can be a fast way to gauge multiple communities or buildings.

Short-Term Rental Occupancy Rate

The need for more rentals in a region can be determined by examining the short-term rental occupancy level. If almost all of the rentals are full, that market necessitates more rental space. If property owners in the market are having issues filling their current properties, you will have trouble filling yours.

Short-Term Rental Cash-on-Cash Return

To understand whether you should invest your capital in a specific investment asset or market, calculate the cash-on-cash return. Take your estimated Net Operating Income (NOI) and divide it by your investment cash budget. The answer is shown as a percentage. When a venture is lucrative enough to return the capital spent fast, you’ll receive a high percentage. Sponsored investment ventures can show stronger cash-on-cash returns as you are spending less of your own funds.

Average Short-Term Rental Capitalization (Cap) Rates

This benchmark compares rental property worth to its annual return. In general, the less money an investment asset costs (or is worth), the higher the cap rate will be. When cap rates are low, you can prepare to pay more for investment properties in that city. You can get the cap rate for potential investment property by dividing the Net Operating Income (NOI) by the Fair Market Value or asking price of the residential property. The answer is the yearly return in a percentage.

Local Attractions

Big public events and entertainment attractions will draw tourists who will look for short-term rental properties. When a city has sites that periodically produce sought-after events, like sports stadiums, universities or colleges, entertainment centers, and adventure parks, it can attract visitors from outside the area on a regular basis. Outdoor tourist spots such as mountains, rivers, coastal areas, and state and national parks can also invite prospective tenants.

To fix and flip a residential property, you should get it for less than market worth, perform any required repairs and enhancements, then liquidate the asset for full market price. The keys to a lucrative fix and flip are to pay less for the house than its as-is worth and to precisely analyze the amount you need to spend to make it marketable.

You also need to know the real estate market where the home is situated. You always want to check the amount of time it takes for homes to sell, which is illustrated by the Days on Market (DOM) metric. As a “house flipper”, you will have to liquidate the improved real estate immediately so you can eliminate maintenance expenses that will lower your returns.

Assist determined real property owners in discovering your business by listing your services in our directory of the best San Juan County cash house buyers and top San Juan County real estate investment firms.

Additionally, look for bird dogs for real estate investors in San Juan County UT. These experts specialize in quickly locating good investment prospects before they hit the market.

Factors to Consider

Median Home Price

The region’s median housing price could help you find a desirable community for flipping houses. When values are high, there might not be a steady source of run down homes in the location. This is a crucial ingredient of a lucrative fix and flip.

When you see a sudden weakening in property market values, this might indicate that there are potentially properties in the region that qualify for a short sale. You will receive notifications about these possibilities by working with short sale processing companies in San Juan County UT. Uncover more concerning this kind of investment by reading our guide How Difficult Is It to Buy a Short Sale Home?.

Property Appreciation Rate

Are home values in the city on the way up, or going down? You need a city where property prices are regularly and consistently going up. Speedy price growth could show a value bubble that is not reliable. When you are buying and selling swiftly, an unstable environment can harm you.

Average Renovation Costs

A careful study of the community’s building costs will make a significant difference in your market selection. The manner in which the local government goes about approving your plans will have an effect on your project as well. If you need to have a stamped set of plans, you’ll need to include architect’s fees in your costs.

Population Growth

Population growth is a strong gauge of the strength or weakness of the city’s housing market. When the population isn’t increasing, there is not going to be an adequate pool of purchasers for your properties.

Median Population Age

The median population age is a straightforward indicator of the accessibility of preferred homebuyers. The median age in the market should equal the age of the regular worker. Individuals in the local workforce are the most dependable real estate purchasers. People who are preparing to depart the workforce or are retired have very specific housing requirements.

Unemployment Rate

When you stumble upon a location that has a low unemployment rate, it is a strong sign of lucrative investment opportunities. It must certainly be less than the US average. If it’s also less than the state average, that’s even more attractive. Jobless individuals can’t acquire your property.

Income Rates

Median household and per capita income numbers show you whether you will get adequate purchasers in that area for your houses. When families acquire a home, they usually need to obtain financing for the purchase. Home purchasers’ eligibility to qualify for financing depends on the size of their income. Median income will let you determine whether the standard home purchaser can afford the property you intend to market. Particularly, income growth is crucial if you plan to expand your investment business. Construction expenses and home purchase prices go up periodically, and you need to be certain that your target clients’ income will also get higher.

Number of New Jobs Created

Knowing how many jobs are generated every year in the region can add to your assurance in a community’s economy. A growing job market communicates that more prospective home buyers are comfortable with buying a home there. New jobs also draw wage earners migrating to the area from other places, which additionally invigorates the property market.

Hard Money Loan Rates

People who purchase, rehab, and liquidate investment real estate are known to engage hard money instead of typical real estate financing. Hard money financing products enable these investors to take advantage of existing investment opportunities right away. Discover top hard money lenders for real estate investors in San Juan County UT so you may review their fees.

People who are not experienced regarding hard money loans can discover what they should know with our detailed explanation for those who are only starting — What Is Private Money?.

Wholesaling is a real estate investment approach that involves locating houses that are appealing to investors and signing a purchase contract. A real estate investor then “buys” the sale and purchase agreement from you. The seller sells the property under contract to the real estate investor instead of the real estate wholesaler. The real estate wholesaler does not liquidate the property — they sell the contract to purchase one.

This method involves employing a title company that’s knowledgeable about the wholesale contract assignment procedure and is able and predisposed to coordinate double close transactions. Hunt for title services for wholesale investors in San Juan County UT in HouseCashin’s list.

Read more about how wholesaling works from our definitive guide — Real Estate Wholesaling Explained for Beginners. When employing this investing plan, add your company in our list of the best home wholesalers in San Juan County UT. This will allow any potential clients to see you and initiate a contact.

Factors to Consider

Median Home Prices

Median home values in the area will tell you if your preferred price level is possible in that city. Below average median purchase prices are a solid indication that there are enough residential properties that can be acquired for lower than market value, which real estate investors have to have.

A quick decline in real estate worth may be followed by a high number of ’upside-down’ houses that short sale investors look for. This investment method regularly brings several unique advantages. However, there could be risks as well. Learn more regarding wholesaling a short sale property from our complete explanation. If you want to give it a try, make certain you have one of short sale attorneys in San Juan County UT and foreclosure lawyers in San Juan County UT to confer with.

Property Appreciation Rate

Property appreciation rate enhances the median price data. Many real estate investors, like buy and hold and long-term rental landlords, notably want to see that home values in the community are going up consistently. Both long- and short-term investors will avoid a location where housing values are decreasing.

Population Growth

Population growth stats are something that real estate investors will look at carefully. A growing population will require additional residential units. Investors realize that this will involve both leasing and owner-occupied residential housing. When a community isn’t multiplying, it does not require additional residential units and real estate investors will look somewhere else.

Median Population Age

A vibrant housing market prefers individuals who are initially leasing, then transitioning into homeownership, and then moving up in the residential market. This needs a strong, constant labor pool of residents who are optimistic enough to shift up in the residential market. When the median population age matches the age of working adults, it indicates a favorable property market.

Income Rates

The median household and per capita income should be increasing in a friendly real estate market that investors prefer to work in. Income improvement proves a community that can absorb rental rate and home price increases. Real estate investors have to have this if they are to reach their expected profitability.

Unemployment Rate

Real estate investors whom you offer to buy your contracts will consider unemployment stats to be an essential bit of insight. Delayed rent payments and lease default rates are prevalent in areas with high unemployment. Long-term real estate investors who depend on steady rental income will suffer in these locations. High unemployment causes uncertainty that will stop interested investors from buying a house. Short-term investors won’t risk getting pinned down with a property they cannot liquidate fast.

Number of New Jobs Created

The amount of fresh jobs appearing in the market completes an investor’s assessment of a future investment spot. People relocate into a location that has fresh job openings and they need housing. Employment generation is beneficial for both short-term and long-term real estate investors whom you depend on to acquire your sale contracts.

Average Renovation Costs

Rehab spendings have a strong effect on a real estate investor’s profit. When a short-term investor renovates a building, they need to be able to resell it for more than the combined sum they spent for the purchase and the upgrades. The cheaper it is to rehab a property, the more profitable the community is for your potential contract buyers.

This strategy involves obtaining debt (mortgage note) from a lender for less than the balance owed. By doing so, you become the lender to the initial lender’s client.

When a mortgage loan is being paid as agreed, it is thought of as a performing loan. Performing loans give stable revenue for investors. Non-performing mortgage notes can be re-negotiated or you could pick up the property at a discount through a foreclosure process.

One day, you might accrue a group of mortgage note investments and not have the time to oversee them without assistance. In this case, you can employ one of third party mortgage servicers in San Juan County UT that will basically turn your investment into passive cash flow.

Should you determine that this strategy is best for you, insert your firm in our directory of San Juan County top mortgage note buyers. Being on our list puts you in front of lenders who make profitable investment possibilities available to note investors such as yourself.

Factors to consider

Foreclosure Rates

Performing note purchasers prefer areas that have low foreclosure rates. If the foreclosure rates are high, the community may still be good for non-performing note investors. The neighborhood needs to be active enough so that investors can complete foreclosure and resell properties if needed.

Foreclosure Laws

Investors want to know their state’s laws concerning foreclosure before investing in mortgage notes. Are you faced with a Deed of Trust or a mortgage? While using a mortgage, a court will have to agree to a foreclosure. Investors don’t have to have the judge’s agreement with a Deed of Trust.

Mortgage Interest Rates

Note investors take over the interest rate of the loan notes that they acquire. Your investment return will be influenced by the interest rate. Mortgage interest rates are critical to both performing and non-performing note buyers.

Traditional interest rates can vary by as much as a 0.25% around the United States. The higher risk taken on by private lenders is shown in bigger interest rates for their mortgage loans compared to traditional mortgage loans.

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

Demographics

An effective mortgage note investment plan uses a review of the community by utilizing demographic data. It’s important to find out if a sufficient number of residents in the neighborhood will continue to have reliable jobs and wages in the future.
A young expanding region with a vibrant employment base can provide a consistent income stream for long-term note buyers looking for performing mortgage notes.

Non-performing note buyers are reviewing comparable indicators for other reasons. If non-performing mortgage note investors want to foreclose, they will have to have a stable real estate market to liquidate the repossessed property.

Property Values

As a mortgage note buyer, you will try to find borrowers with a cushion of equity. This improves the likelihood that a potential foreclosure sale will repay the amount owed. As mortgage loan payments reduce the balance owed, and the market value of the property goes up, the homeowner’s equity goes up too.

Property Taxes

Normally, lenders receive the house tax payments from the homebuyer every month. When the property taxes are due, there needs to be sufficient payments in escrow to take care of them. If loan payments aren’t being made, the mortgage lender will have to choose between paying the taxes themselves, or they become delinquent. When taxes are past due, the municipality’s lien leapfrogs all other liens to the head of the line and is taken care of first.

If property taxes keep increasing, the homebuyer’s house payments also keep going up. Homeowners who have difficulty making their mortgage payments could drop farther behind and sooner or later default.

Real Estate Market Strength

A vibrant real estate market showing good value increase is helpful for all categories of note buyers. The investors can be assured that, if necessary, a defaulted collateral can be unloaded at a price that is profitable.

Vibrant markets often open opportunities for private investors to make the first loan themselves. This is a strong stream of income for successful investors.

A trust operating income-generating real estate properties and that sells shares to people is a REIT — Real Estate Investment Trust. REITs were invented to allow ordinary people to invest in real estate. The everyday person has the funds to invest in a REIT.

Shareholders’ investment in a REIT classifies as passive investment. The exposure that the investors are taking is diversified within a collection of investment real properties. Shares in a REIT may be unloaded whenever it’s desirable for the investor. One thing you cannot do with REIT shares is to determine the investment assets. Their investment is limited to the properties chosen by their REIT.

Mutual funds that contain shares of real estate businesses are termed real estate investment funds. The investment properties are not held by the fund — they are held by the companies in which the fund invests. This is an additional way for passive investors to diversify their investments with real estate avoiding the high entry-level expense or exposure. Real estate investment funds aren’t obligated to pay dividends unlike a REIT. As with any stock, investment funds’ values increase and go down with their share value.

Investors are able to select a fund that focuses on specific segments of the real estate business but not specific locations for individual real estate investment. You must depend on the fund’s directors to determine which markets and assets are picked for investment.