Ultimate Seward County Real Estate Investing Guide for 2024

BRRRR is an abbreviation of “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a plan for repeated expansion. A critical part of this strategy is to be able to get a “cash-out” mortgage refinance.

The After Repair Value (ARV) of the rental needs to total more than the complete buying and refurbishment costs. The asset is refinanced using the ARV and the difference, or equity, is given to you in cash. You buy your next investment property with the cash-out sum and begin all over again. You add growing investment assets to your portfolio and lease income to your cash flow.

When an investor owns a large portfolio of investment properties, it seems smart to pay a property manager and designate a passive income stream. Find one of the best property management firms in Seward County KS with a review of our comprehensive directory.

Factors to Consider

Population Growth

The increase or fall of the population can tell you whether that location is interesting to landlords. If the population increase in an area is robust, then additional renters are assuredly relocating into the market. Relocating companies are drawn to growing markets providing job security to households who move there. This equates to stable tenants, greater rental income, and a greater number of likely homebuyers when you need to unload your rental.

Property Taxes

Property taxes, regular maintenance spendings, and insurance directly hurt your profitability. Rental property located in high property tax areas will bring lower returns. If property tax rates are too high in a specific location, you will need to look in a different location.

Price to Rent Ratio

The price to rent ratio (p/r) is a contrast of median property values and median lease rates that will indicate how high of a rent the market can allow. The rate you can demand in a community will limit the amount you are willing to pay depending on how long it will take to repay those funds. You want to see a lower p/r to be comfortable that you can set your rents high enough to reach good returns.

Median Gross Rents

Median gross rents are a clear indicator of the stability of a rental market. Look for a stable rise in median rents during a few years. If rental rates are going down, you can eliminate that region from consideration.

Median Population Age

Median population age will be similar to the age of a usual worker if an area has a good source of renters. You’ll find this to be true in areas where workers are moving. If working-age people are not coming into the community to succeed retirees, the median age will increase. This is not good for the impending financial market of that market.

Employment Base Diversity

A varied employment base is something a wise long-term investor landlord will hunt for. When there are only one or two significant employers, and either of them moves or goes out of business, it can lead you to lose paying customers and your property market prices to go down.

Unemployment Rate

High unemployment results in smaller amount of renters and an unreliable housing market. People who don’t have a job cannot buy goods or services. The still employed people might find their own wages reduced. Even people who are employed may find it challenging to keep up with their rent.

Income Rates

Median household and per capita income will tell you if the renters that you are looking for are living in the city. Historical wage records will illustrate to you if income increases will enable you to hike rental fees to meet your investment return expectations.

Number of New Jobs Created

The dynamic economy that you are hunting for will be creating a large amount of jobs on a constant basis. New jobs mean more renters. This assures you that you will be able to keep an acceptable occupancy rate and acquire additional rentals.

School Ratings

Community schools will make a strong influence on the housing market in their locality. When a company evaluates a market for potential relocation, they know that first-class education is a must-have for their employees. Business relocation creates more renters. Property market values gain with additional workers who are purchasing properties. For long-term investing, look for highly ranked schools in a prospective investment location.

Property Appreciation Rates

The essence of a long-term investment plan is to hold the investment property. Investing in properties that you aim to keep without being certain that they will rise in value is a recipe for failure. Small or dropping property appreciation rates should exclude a community from consideration.

A short-term rental is a furnished residence where a tenant lives for shorter than 30 days. Long-term rental units, like apartments, charge lower rental rates per night than short-term ones. Short-term rental apartments could require more constant repairs and tidying.

Usual short-term tenants are backpackers, home sellers who are buying another house, and corporate travelers who require more than a hotel room. Any property owner can convert their property into a short-term rental unit with the services given by online home-sharing sites like VRBO and AirBnB. An easy method to enter real estate investing is to rent a residential property you already possess for short terms.

Vacation rental landlords necessitate interacting one-on-one with the occupants to a greater degree than the owners of yearly rented properties. As a result, investors manage issues repeatedly. You might need to cover your legal exposure by hiring one of the best Seward County law firms for real estate.

Factors to Consider

Short-Term Rental Income

You must determine the range of rental revenue you’re targeting based on your investment budget. A market’s short-term rental income levels will quickly tell you if you can anticipate to reach your estimated income levels.

Median Property Prices

Meticulously evaluate the amount that you are able to spare for additional investment assets. To see if a region has potential for investment, study the median property prices. You can also make use of median values in particular sub-markets within the market to pick locations for investment.

Price Per Square Foot

Price per sq ft can be misleading when you are examining different buildings. A building with open foyers and high ceilings cannot be contrasted with a traditional-style property with bigger floor space. If you take note of this, the price per square foot may provide you a basic estimation of real estate prices.

Short-Term Rental Occupancy Rate

The necessity for more rental units in an area may be seen by examining the short-term rental occupancy level. A high occupancy rate indicates that an additional amount of short-term rentals is necessary. Weak occupancy rates indicate that there are already enough short-term rental properties in that city.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will show you if the purchase is a wise use of your cash. Take your projected Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The answer will be a percentage. If a venture is profitable enough to recoup the investment budget quickly, you will get a high percentage. If you take a loan for a fraction of the investment and spend less of your funds, you will realize a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This benchmark shows the comparability of rental property value to its per-annum revenue. An income-generating asset that has a high cap rate and charges average market rental rates has a high market value. If properties in a market have low cap rates, they typically will cost more. You can obtain the cap rate for potential investment property by dividing the Net Operating Income (NOI) by the market worth or asking price of the residential property. This shows you a ratio that is the year-over-year return, or cap rate.

Local Attractions

Short-term rental properties are popular in places where sightseers are attracted by events and entertainment venues. If a region has sites that periodically produce must-see events, like sports arenas, universities or colleges, entertainment halls, and amusement parks, it can invite people from outside the area on a regular basis. At certain seasons, areas with outside activities in mountainous areas, seaside locations, or along rivers and lakes will draw a throng of visitors who want short-term housing.

When an investor buys a property for less than the market worth, renovates it so that it becomes more attractive and pricier, and then sells the property for revenue, they are known as a fix and flip investor. To be successful, the flipper needs to pay lower than the market price for the property and determine what it will take to rehab the home.

You also have to evaluate the resale market where the property is situated. Choose a city with a low average Days On Market (DOM) indicator. Selling the house immediately will help keep your expenses low and guarantee your returns.

In order that home sellers who have to sell their home can effortlessly find you, highlight your status by using our catalogue of the best all cash home buyers in Seward County KS along with top real estate investment firms in Seward County KS.

Additionally, hunt for the best bird dogs for real estate investors in Seward County KS. Professionals on our list specialize in securing desirable investment opportunities while they’re still under the radar.

Factors to Consider

Median Home Price

The location’s median home value could help you spot a good neighborhood for flipping houses. You’re seeking for median prices that are modest enough to show investment opportunities in the market. This is a necessary feature of a fix and flip market.

When your review entails a quick weakening in housing values, it might be a heads up that you will uncover real estate that fits the short sale criteria. Real estate investors who work with short sale processors in Seward County KS get regular notices about potential investment properties. You will discover valuable data regarding short sales in our article ⁠— How Can I Buy a Short Sale Home?.

Property Appreciation Rate

Are property prices in the market going up, or moving down? Fixed growth in median prices indicates a strong investment market. Unpredictable market worth fluctuations are not desirable, even if it’s a significant and unexpected surge. Purchasing at an inopportune point in an unstable environment can be problematic.

Average Renovation Costs

You will need to evaluate building expenses in any prospective investment location. The time it will require for getting permits and the municipality’s requirements for a permit request will also impact your decision. If you are required to present a stamped set of plans, you’ll have to include architect’s charges in your budget.

Population Growth

Population growth is a good indication of the strength or weakness of the location’s housing market. Flat or decelerating population growth is a sign of a weak environment with not an adequate supply of purchasers to validate your effort.

Median Population Age

The median citizens’ age is a contributing factor that you may not have thought about. The median age in the region should be the one of the usual worker. Individuals in the local workforce are the most reliable real estate buyers. Individuals who are preparing to leave the workforce or have already retired have very restrictive housing needs.

Unemployment Rate

When you stumble upon a community that has a low unemployment rate, it’s a solid sign of good investment opportunities. It should definitely be lower than the national average. If the city’s unemployment rate is lower than the state average, that is an indication of a good investing environment. If you don’t have a dynamic employment environment, an area won’t be able to supply you with abundant home purchasers.

Income Rates

Median household and per capita income are an important indication of the robustness of the housing conditions in the location. When families acquire a house, they typically need to take a mortgage for the home purchase. Homebuyers’ ability to take a loan rests on the size of their income. The median income numbers will show you if the community is good for your investment plan. Specifically, income growth is vital if you want to grow your business. When you want to augment the purchase price of your houses, you need to be certain that your home purchasers’ wages are also going up.

Number of New Jobs Created

The number of jobs generated yearly is vital information as you consider investing in a specific location. A higher number of citizens purchase homes when the city’s financial market is creating jobs. Experienced skilled employees taking into consideration purchasing a property and deciding to settle opt for relocating to cities where they will not be unemployed.

Hard Money Loan Rates

People who buy, renovate, and liquidate investment real estate are known to engage hard money instead of regular real estate financing. Hard money financing products enable these investors to move forward on pressing investment projects immediately. Discover top-rated hard money lenders in Seward County KS so you can match their charges.

Anyone who needs to know about hard money loans can discover what they are and the way to employ them by reading our guide titled How Hard Money Lending Works.

Wholesaling is a real estate investment approach that involves locating houses that are attractive to investors and putting them under a purchase contract. A real estate investor then ”purchases” the purchase contract from you. The seller sells the house to the real estate investor instead of the wholesaler. The real estate wholesaler doesn’t sell the residential property — they sell the rights to purchase it.

This strategy includes utilizing a title firm that’s experienced in the wholesale contract assignment operation and is qualified and willing to handle double close deals. Hunt for title services for wholesale investors in Seward County KS in our directory.

Learn more about this strategy from our complete guide — Real Estate Wholesaling 101. As you opt for wholesaling, add your investment company in our directory of the best wholesale real estate investors in Seward County KS. This will help your possible investor customers discover and call you.

Factors to Consider

Median Home Prices

Median home values are essential to locating communities where houses are being sold in your real estate investors’ purchase price range. Since investors prefer investment properties that are on sale for less than market value, you will have to see below-than-average median prices as an implicit hint on the potential source of properties that you could acquire for below market price.

Rapid worsening in property market worth may result in a supply of houses with no equity that appeal to short sale property buyers. Short sale wholesalers often gain advantages using this method. Nonetheless, be aware of the legal challenges. Gather more information on how to wholesale short sale real estate with our comprehensive explanation. When you are keen to begin wholesaling, look through Seward County top short sale real estate attorneys as well as Seward County top-rated property foreclosure attorneys lists to locate the best advisor.

Property Appreciation Rate

Median home price fluctuations explain in clear detail the housing value in the market. Many investors, like buy and hold and long-term rental landlords, particularly need to know that home market values in the community are increasing consistently. A dropping median home price will indicate a poor leasing and home-buying market and will turn off all types of real estate investors.

Population Growth

Population growth information is essential for your potential contract assignment buyers. An increasing population will require new residential units. This combines both leased and ‘for sale’ properties. A region that has a declining community does not interest the real estate investors you want to buy your contracts.

Median Population Age

Investors need to be a part of a thriving housing market where there is a sufficient source of renters, first-time homebuyers, and upwardly mobile citizens purchasing more expensive houses. A community that has a big employment market has a steady supply of renters and purchasers. That’s why the city’s median age needs to be the age of skilled workers in the employment market.

Income Rates

The median household and per capita income in a reliable real estate investment market have to be growing. Increases in lease and purchase prices will be supported by improving salaries in the market. That will be vital to the investors you are looking to work with.

Unemployment Rate

Real estate investors will carefully evaluate the area’s unemployment rate. Delayed rent payments and default rates are prevalent in regions with high unemployment. Long-term investors will not buy a house in a city like this. Investors can’t count on tenants moving up into their properties if unemployment rates are high. Short-term investors won’t take a chance on getting stuck with a house they can’t sell easily.

Number of New Jobs Created

Understanding how frequently fresh employment opportunities are produced in the market can help you determine if the house is positioned in a reliable housing market. Additional jobs produced attract more employees who need spaces to rent and buy. No matter if your purchaser supply consists of long-term or short-term investors, they will be attracted to a community with constant job opening creation.

Average Renovation Costs

An imperative variable for your client investors, especially house flippers, are rehab expenses in the community. When a short-term investor flips a building, they need to be prepared to sell it for more than the whole expense for the purchase and the rehabilitation. The less you can spend to fix up a home, the friendlier the area is for your potential contract buyers.

Purchasing mortgage notes (loans) pays off when the mortgage note can be purchased for a lower amount than the face value. The borrower makes subsequent payments to the note investor who is now their new mortgage lender.

Loans that are being repaid on time are thought of as performing loans. These notes are a steady source of passive income. Note investors also purchase non-performing mortgages that they either restructure to help the borrower or foreclose on to acquire the collateral below actual value.

Eventually, you may accrue a number of mortgage note investments and be unable to manage them by yourself. At that point, you might want to utilize our catalogue of Seward County top third party loan servicing companies and reassign your notes as passive investments.

Should you decide to pursue this strategy, add your project to our directory of mortgage note buyers in Seward County KS. When you do this, you’ll be noticed by the lenders who promote profitable investment notes for purchase by investors such as yourself.

Factors to consider

Foreclosure Rates

Mortgage note investors looking for stable-performing mortgage loans to acquire will hope to uncover low foreclosure rates in the market. If the foreclosures happen too often, the market could still be profitable for non-performing note investors. The neighborhood ought to be robust enough so that mortgage note investors can foreclose and liquidate collateral properties if required.

Foreclosure Laws

Professional mortgage note investors are thoroughly well-versed in their state’s laws for foreclosure. Are you working with a mortgage or a Deed of Trust? A mortgage requires that the lender goes to court for approval to foreclose. You do not have to have the court’s permission with a Deed of Trust.

Mortgage Interest Rates

The mortgage interest rate is indicated in the mortgage loan notes that are acquired by note investors. Your mortgage note investment profits will be affected by the interest rate. Interest rates affect the strategy of both kinds of mortgage note investors.

Conventional lenders charge different mortgage loan interest rates in different parts of the country. The higher risk accepted by private lenders is reflected in higher interest rates for their loans in comparison with conventional mortgage loans.

A note investor ought to know the private and traditional mortgage loan rates in their markets all the time.

Demographics

An efficient note investment plan incorporates an assessment of the market by utilizing demographic information. The region’s population increase, unemployment rate, employment market growth, income levels, and even its median age hold valuable facts for investors.
A youthful expanding community with a strong employment base can provide a consistent income stream for long-term note buyers searching for performing notes.

The same area may also be profitable for non-performing mortgage note investors and their end-game plan. In the event that foreclosure is necessary, the foreclosed collateral property is more conveniently liquidated in a strong property market.

Property Values

As a note buyer, you will look for borrowers having a comfortable amount of equity. If the investor has to foreclose on a loan with little equity, the sale may not even pay back the amount invested in the note. The combined effect of mortgage loan payments that lower the loan balance and yearly property market worth growth expands home equity.

Property Taxes

Escrows for house taxes are usually sent to the mortgage lender simultaneously with the loan payment. The lender passes on the taxes to the Government to make sure they are submitted on time. If the homeowner stops paying, unless the mortgage lender remits the property taxes, they will not be paid on time. Property tax liens leapfrog over all other liens.

Because property tax escrows are included with the mortgage loan payment, growing property taxes indicate larger house payments. This makes it difficult for financially strapped borrowers to stay current, so the mortgage loan could become delinquent.

Real Estate Market Strength

Both performing and non-performing note buyers can succeed in a vibrant real estate environment. It is good to know that if you need to foreclose on a property, you won’t have trouble getting an acceptable price for the property.

A vibrant real estate market can also be a lucrative area for initiating mortgage notes. This is a desirable stream of income for successful investors.

A trust owning income-generating real estate and that offers shares to investors is a REIT — Real Estate Investment Trust. This was initially invented as a way to empower the everyday investor to invest in real estate. The typical investor has the funds to invest in a REIT.

REIT investing is classified as passive investing. The exposure that the investors are accepting is distributed within a collection of investment assets. Investors are able to sell their REIT shares anytime they want. Something you cannot do with REIT shares is to determine the investment properties. Their investment is limited to the properties selected by the REIT.

A Real Estate Investment Fund is a mutual fund that possesses stocks of real estate firms. The investment assets aren’t owned by the fund — they’re possessed by the companies the fund invests in. These funds make it easier for a wider variety of people to invest in real estate properties. Whereas REITs must disburse dividends to its shareholders, funds don’t. The return to you is created by growth in the worth of the stock.

Investors can pick a fund that concentrates on particular categories of the real estate business but not specific markets for individual real estate property investment. Your decision as an investor is to pick a fund that you believe in to handle your real estate investments.