Ultimate Summit County Real Estate Investing Guide for 2024

The abbreviation BRRRR is an illustration of a long-term rental strategy — Buy, Rehab, Rent, Refinance, Repeat. BRRRR is a strategy for consistent expansion. This method hinges on your ability to take cash out when you refinance.

You improve the value of the asset above what you spent buying and renovating it. After that, you extract the value you produced from the property in a “cash-out” refinance. This capital is put into a different property, and so on. You acquire additional houses or condos and constantly increase your rental income.

If an investor owns a large portfolio of investment properties, it makes sense to employ a property manager and designate a passive income source. Discover one of the best investment property management firms in Summit County OH with the help of our exhaustive directory.

Factors to Consider

Population Growth

Population increase or shrinking shows you if you can depend on reliable results from long-term property investments. If the population increase in a community is robust, then new renters are definitely coming into the community. Relocating employers are attracted to growing cities giving reliable jobs to families who relocate there. Growing populations create a dependable renter reserve that can handle rent raises and home purchasers who help keep your property values up.

Property Taxes

Property taxes, just like insurance and upkeep expenses, may vary from place to place and have to be looked at carefully when assessing possible returns. High expenses in these categories jeopardize your investment’s bottom line. If property taxes are excessive in a specific market, you will need to search somewhere else.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property values and median rental rates that will signal how high of a rent the market can allow. An investor can not pay a large price for an investment asset if they can only demand a limited rent not letting them to pay the investment off in a suitable timeframe. You are trying to find a low p/r to be comfortable that you can set your rents high enough for good returns.

Median Gross Rents

Median gross rents are a clear indicator of the vitality of a lease market. Look for a stable increase in median rents year over year. You will not be able to realize your investment goals in a city where median gross rents are shrinking.

Median Population Age

The median citizens’ age that you are on the hunt for in a favorable investment market will be similar to the age of salaried adults. You’ll learn this to be accurate in markets where people are relocating. A high median age means that the existing population is aging out with no replacement by younger people moving in. A dynamic real estate market can’t be supported by retiring workers.

Employment Base Diversity

Having multiple employers in the location makes the economy less unstable. If the citizens are employed by only several significant businesses, even a minor problem in their operations could cause you to lose a lot of renters and increase your exposure significantly.

Unemployment Rate

You won’t reap the benefits of a stable rental cash flow in a community with high unemployment. Non-working people cease being customers of yours and of related companies, which causes a ripple effect throughout the market. The remaining workers might see their own salaries marked down. Existing renters could delay their rent payments in this scenario.

Income Rates

Median household and per capita income will demonstrate if the renters that you are looking for are residing in the city. Your investment research will take into consideration rent and asset appreciation, which will be based on income growth in the region.

Number of New Jobs Created

The strong economy that you are looking for will create enough jobs on a consistent basis. The employees who fill the new jobs will need a place to live. This assures you that you will be able to keep a high occupancy rate and buy additional rentals.

School Ratings

The rating of school districts has a strong effect on property prices across the area. Well-respected schools are a requirement of employers that are thinking about relocating. Business relocation creates more tenants. Real estate market values gain thanks to new workers who are buying houses. You will not find a dynamically growing residential real estate market without quality schools.

Property Appreciation Rates

Strong property appreciation rates are a must for a profitable long-term investment. You have to be confident that your investment assets will appreciate in market value until you decide to dispose of them. Low or decreasing property appreciation rates should remove a market from the selection.

A furnished residence where renters reside for shorter than 30 days is called a short-term rental. The nightly rental prices are usually higher in short-term rentals than in long-term ones. With renters moving from one place to the next, short-term rentals have to be maintained and cleaned on a constant basis.

Home sellers waiting to relocate into a new home, backpackers, and individuals traveling on business who are staying in the area for about week prefer renting a residential unit short term. Regular real estate owners can rent their houses or condominiums on a short-term basis through portals such as AirBnB and VRBO. Short-term rentals are deemed as an effective technique to kick off investing in real estate.

Short-term rental units involve interacting with occupants more often than long-term rental units. Because of this, owners manage issues repeatedly. Ponder protecting yourself and your assets by joining any of property law attorneys in Summit County OH to your team of professionals.

Factors to Consider

Short-Term Rental Income

Initially, compute how much rental revenue you must earn to meet your anticipated profits. A region’s short-term rental income levels will promptly reveal to you if you can anticipate to reach your estimated income levels.

Median Property Prices

You also have to decide the amount you can manage to invest. Look for markets where the budget you count on is appropriate for the present median property values. You can customize your location survey by looking at the median price in specific sub-markets.

Price Per Square Foot

Price per sq ft may be misleading if you are comparing different buildings. When the designs of potential homes are very contrasting, the price per square foot may not help you get a correct comparison. If you keep this in mind, the price per sq ft can give you a general estimation of local prices.

Short-Term Rental Occupancy Rate

The ratio of short-term rental units that are presently filled in a city is crucial information for a landlord. When the majority of the rental units have few vacancies, that market demands additional rental space. Low occupancy rates denote that there are more than enough short-term units in that location.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a means to estimate the value of an investment venture. Take your estimated Net Operating Income (NOI) and divide it by your investment cash budget. The result is shown as a percentage. The higher it is, the sooner your investment funds will be repaid and you will begin realizing profits. If you get financing for a portion of the investment amount and use less of your funds, you will receive a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) rates are generally employed by real property investors to assess the worth of rentals. As a general rule, the less money a unit will cost (or is worth), the higher the cap rate will be. Low cap rates show more expensive rental units. You can get the cap rate for possible investment real estate by dividing the Net Operating Income (NOI) by the Fair Market Value or listing price of the property. The answer is the annual return in a percentage.

Local Attractions

Short-term tenants are often travellers who visit a city to attend a yearly major activity or visit tourist destinations. If a community has places that periodically produce sought-after events, such as sports coliseums, universities or colleges, entertainment venues, and adventure parks, it can draw visitors from other areas on a recurring basis. Outdoor scenic spots such as mountains, lakes, beaches, and state and national nature reserves will also draw potential tenants.

To fix and flip a residential property, you should get it for below market price, conduct any necessary repairs and upgrades, then dispose of the asset for better market worth. To keep the business profitable, the flipper must pay lower than the market worth for the property and know what it will take to fix the home.

Examine the values so that you understand the accurate After Repair Value (ARV). You always need to check the amount of time it takes for real estate to close, which is determined by the Days on Market (DOM) information. To successfully “flip” a property, you have to dispose of the repaired home before you are required to shell out a budget to maintain it.

Help determined real property owners in finding your firm by listing it in our directory of Summit County companies that buy houses for cash and the best Summit County real estate investors.

Additionally, coordinate with Summit County property bird dogs. Experts listed here will assist you by immediately locating conceivably lucrative ventures ahead of them being sold.

Factors to Consider

Median Home Price

When you hunt for a profitable market for house flipping, look at the median house price in the district. Modest median home values are a sign that there should be an inventory of residential properties that can be acquired for less than market worth. This is a fundamental feature of a fix and flip market.

When you notice a fast decrease in property values, this could mean that there are conceivably properties in the neighborhood that will work for a short sale. You’ll hear about possible investments when you join up with Summit County short sale negotiation companies. Discover more regarding this type of investment explained in our guide How Do I Buy a Short Sale Property?.

Property Appreciation Rate

Dynamics relates to the route that median home prices are going. You are eyeing for a reliable increase of local property prices. Housing purchase prices in the area should be going up consistently, not rapidly. When you are purchasing and selling fast, an erratic market can harm your investment.

Average Renovation Costs

Look closely at the potential repair expenses so you’ll know if you can achieve your goals. The time it will take for getting permits and the municipality’s requirements for a permit request will also influence your decision. You have to be aware whether you will have to employ other professionals, like architects or engineers, so you can get ready for those costs.

Population Growth

Population increase figures let you take a look at housing demand in the region. If the number of citizens is not increasing, there is not going to be an adequate pool of purchasers for your real estate.

Median Population Age

The median citizens’ age is a clear indication of the presence of possible homebuyers. If the median age is the same as the one of the typical worker, it is a positive sign. A high number of such people shows a substantial pool of homebuyers. People who are about to leave the workforce or have already retired have very restrictive residency needs.

Unemployment Rate

When you find a location having a low unemployment rate, it is a good evidence of good investment possibilities. The unemployment rate in a future investment community should be less than the nation’s average. A really friendly investment market will have an unemployment rate lower than the state’s average. If you don’t have a dynamic employment environment, a region won’t be able to provide you with enough home purchasers.

Income Rates

Median household and per capita income are a solid sign of the stability of the housing conditions in the location. Most people who purchase residential real estate need a home mortgage loan. Their wage will determine the amount they can afford and whether they can purchase a home. The median income indicators tell you if the location is beneficial for your investment efforts. Particularly, income increase is important if you need to grow your investment business. If you need to raise the price of your houses, you need to be positive that your home purchasers’ income is also going up.

Number of New Jobs Created

The number of jobs created annually is vital data as you contemplate on investing in a particular city. Homes are more effortlessly sold in a community with a strong job environment. With additional jobs appearing, more prospective home purchasers also come to the region from other towns.

Hard Money Loan Rates

People who buy, fix, and resell investment properties opt to employ hard money and not conventional real estate financing. This allows them to immediately buy undervalued real estate. Discover hard money lending companies in Summit County OH and compare their mortgage rates.

If you are inexperienced with this loan vehicle, learn more by studying our guide — Hard Money Loans Guide for Real Estate Investors.

In real estate wholesaling, you find a property that real estate investors may count as a lucrative investment opportunity and sign a contract to buy it. When an investor who needs the property is spotted, the sale and purchase agreement is assigned to them for a fee. The investor then finalizes the transaction. The real estate wholesaler doesn’t sell the property under contract itself — they simply sell the purchase contract.

Wholesaling hinges on the involvement of a title insurance company that is experienced with assigning real estate sale agreements and understands how to deal with a double closing. Locate title companies that specialize in real estate property investments in Summit County OH that we selected for you.

Learn more about the way to wholesale property from our comprehensive guide — Real Estate Wholesaling Explained for Beginners. When pursuing this investing tactic, add your company in our list of the best house wholesalers in Summit County OH. This will help your future investor purchasers find and call you.

Factors to Consider

Median Home Prices

Median home values are essential to locating cities where houses are selling in your real estate investors’ purchase price point. Since real estate investors need properties that are available for lower than market price, you will have to see lower median prices as an implied hint on the potential supply of residential real estate that you could purchase for lower than market price.

Rapid weakening in real estate prices could result in a lot of homes with no equity that appeal to short sale investors. This investment method often brings numerous different advantages. But it also creates a legal risk. Discover details regarding wholesaling short sales from our extensive guide. When you’re prepared to begin wholesaling, look through Summit County top short sale legal advice experts as well as Summit County top-rated real estate foreclosure attorneys directories to discover the best counselor.

Property Appreciation Rate

Property appreciation rate completes the median price statistics. Investors who plan to sit on real estate investment assets will have to find that home prices are constantly going up. A dropping median home value will illustrate a poor rental and home-buying market and will turn off all kinds of real estate investors.

Population Growth

Population growth data is something that real estate investors will analyze thoroughly. An increasing population will require more housing. This combines both leased and resale real estate. A location with a shrinking population will not attract the investors you require to buy your purchase contracts.

Median Population Age

A favorarble residential real estate market for real estate investors is active in all areas, especially tenants, who evolve into homeowners, who move up into more expensive houses. This needs a strong, reliable workforce of individuals who are optimistic enough to move up in the real estate market. That’s why the community’s median age should be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income should be growing in an active housing market that investors prefer to operate in. Income growth shows a location that can keep up with lease rate and home price raises. Investors stay out of places with poor population salary growth statistics.

Unemployment Rate

The location’s unemployment numbers are a key factor for any targeted wholesale property purchaser. Tenants in high unemployment regions have a challenging time staying current with rent and many will stop making rent payments altogether. Long-term investors who rely on consistent lease income will lose money in these places. High unemployment causes problems that will stop interested investors from purchasing a property. This is a challenge for short-term investors buying wholesalers’ agreements to fix and resell a property.

Number of New Jobs Created

The frequency of new jobs being produced in the market completes an investor’s estimation of a future investment location. New jobs generated mean a large number of workers who need spaces to lease and buy. Employment generation is beneficial for both short-term and long-term real estate investors whom you depend on to take on your wholesale real estate.

Average Renovation Costs

Improvement expenses will matter to most real estate investors, as they normally acquire cheap rundown homes to renovate. When a short-term investor rehabs a building, they want to be able to resell it for more money than the entire expense for the acquisition and the repairs. Below average renovation expenses make a market more attractive for your main customers — flippers and landlords.

Purchasing mortgage notes (loans) pays off when the loan can be bought for a lower amount than the remaining balance. When this happens, the investor becomes the debtor’s lender.

Performing loans mean loans where the borrower is always current on their payments. These notes are a consistent generator of cash flow. Some mortgage note investors look for non-performing loans because when they can’t successfully re-negotiate the loan, they can always take the collateral at foreclosure for a low amount.

One day, you could have many mortgage notes and necessitate more time to handle them by yourself. At that juncture, you may need to utilize our list of Summit County top third party mortgage servicers and redesignate your notes as passive investments.

Should you find that this strategy is best for you, place your business in our list of Summit County top mortgage note buyers. When you’ve done this, you will be noticed by the lenders who announce profitable investment notes for purchase by investors such as yourself.

Factors to consider

Foreclosure Rates

Low foreclosure rates are a signal that the community has investment possibilities for performing note investors. High rates might signal investment possibilities for non-performing note investors, however they need to be careful. The neighborhood should be active enough so that mortgage note investors can complete foreclosure and get rid of collateral properties if needed.

Foreclosure Laws

It’s imperative for note investors to know the foreclosure regulations in their state. Are you dealing with a mortgage or a Deed of Trust? A mortgage dictates that the lender goes to court for authority to start foreclosure. A Deed of Trust permits the lender to file a public notice and proceed to foreclosure.

Mortgage Interest Rates

Note investors acquire the interest rate of the mortgage loan notes that they purchase. This is an important factor in the profits that you reach. Mortgage interest rates are important to both performing and non-performing note buyers.

The mortgage loan rates set by traditional mortgage lenders aren’t equal in every market. Private loan rates can be moderately higher than conventional mortgage rates considering the greater risk accepted by private mortgage lenders.

Successful investors continuously check the rates in their community offered by private and traditional mortgage firms.

Demographics

An efficient mortgage note investment strategy incorporates a research of the community by utilizing demographic information. Mortgage note investors can learn a great deal by estimating the extent of the population, how many citizens are employed, how much they make, and how old the people are.
Performing note buyers seek homeowners who will pay as agreed, developing a repeating income source of loan payments.

The same area could also be good for non-performing mortgage note investors and their end-game strategy. If foreclosure is required, the foreclosed property is more easily unloaded in a strong property market.

Property Values

Note holders need to find as much home equity in the collateral property as possible. If the lender has to foreclose on a loan with lacking equity, the sale may not even pay back the amount invested in the note. As loan payments reduce the amount owed, and the market value of the property appreciates, the borrower’s equity grows.

Property Taxes

Escrows for real estate taxes are usually given to the lender along with the loan payment. By the time the property taxes are due, there should be sufficient payments in escrow to take care of them. If mortgage loan payments are not being made, the lender will have to choose between paying the taxes themselves, or they become past due. When taxes are past due, the municipality’s lien jumps over all other liens to the front of the line and is satisfied first.

If an area has a history of growing tax rates, the combined house payments in that municipality are consistently growing. This makes it tough for financially weak borrowers to meet their obligations, and the loan might become delinquent.

Real Estate Market Strength

Both performing and non-performing mortgage note buyers can do business in a vibrant real estate market. It is important to know that if you are required to foreclose on a property, you will not have difficulty getting a good price for the collateral property.

Strong markets often show opportunities for private investors to make the initial mortgage loan themselves. It is an added phase of a mortgage note investor’s career.

A trust owning income-generating real estate and that sells shares to people is a REIT — Real Estate Investment Trust. Before REITs were invented, real estate investing was too expensive for many people. Most people at present are able to invest in a REIT.

Investing in a REIT is classified as passive investing. REITs handle investors’ exposure with a diversified selection of real estate. Shareholders have the option to liquidate their shares at any time. Participants in a REIT are not able to advise or select real estate properties for investment. You are confined to the REIT’s collection of real estate properties for investment.

Mutual funds that hold shares of real estate firms are referred to as real estate investment funds. The fund doesn’t own properties — it holds interest in real estate firms. Investment funds can be an affordable method to incorporate real estate properties in your allocation of assets without unnecessary liability. Investment funds are not required to distribute dividends like a REIT. The return to the investor is generated by increase in the worth of the stock.

You can select a fund that focuses on a specific kind of real estate business, like multifamily, but you can’t suggest the fund’s investment real estate properties or markets. Your choice as an investor is to pick a fund that you rely on to handle your real estate investments.