Ultimate Summit County Real Estate Investing Guide for 2024

A long-term investment plan that includes Buying a home, Rehabbing, Renting, Refinancing it, and Repeating the process by employing the capital from the mortgage refinance is called BRRRR. BRRRR is a system for repeated growth. This plan revolves around your ability to remove cash out when you refinance.

The After Repair Value (ARV) of the asset needs to total more than the combined buying and refurbishment expenses. Next, you remove the value you produced from the asset in a “cash-out” refinance. You purchase your next property with the cash-out capital and begin anew. You add income-producing investment assets to your balance sheet and rental revenue to your cash flow.

When your investment property portfolio is substantial enough, you may delegate its oversight and get passive income. Locate good Summit County property management companies by looking through our directory.

Factors to Consider

Population Growth

Population expansion or fall shows you if you can expect sufficient returns from long-term investments. A growing population often illustrates active relocation which translates to additional renters. Businesses consider such a region as an appealing place to move their company, and for employees to move their households. This equals dependable renters, greater rental income, and more potential buyers when you need to liquidate the property.

Property Taxes

Real estate taxes, ongoing maintenance expenditures, and insurance directly decrease your profitability. Unreasonable expenses in these areas jeopardize your investment’s bottom line. Unreasonable real estate taxes may show an unreliable community where costs can continue to rise and must be considered a warning.

Price to Rent Ratio

The price to rent ratio (p/r) is a clue to how high of a rent can be collected in comparison to the market worth of the property. How much you can charge in a community will limit the price you are willing to pay determined by how long it will take to recoup those funds. You will prefer to see a low p/r to be confident that you can price your rental rates high enough to reach good returns.

Median Gross Rents

Median gross rents are an accurate yardstick of the acceptance of a rental market under discussion. Search for a stable increase in median rents during a few years. If rents are shrinking, you can drop that market from discussion.

Median Population Age

Median population age should be close to the age of a typical worker if a city has a strong stream of renters. If people are moving into the city, the median age will not have a problem staying at the level of the workforce. If you find a high median age, your supply of renters is becoming smaller. That is an unacceptable long-term financial picture.

Employment Base Diversity

Having multiple employers in the city makes the market less risky. If there are only one or two major employers, and one of such relocates or closes down, it will make you lose renters and your asset market worth to plunge.

Unemployment Rate

You will not benefit from a secure rental cash flow in a locality with high unemployment. Normally successful businesses lose customers when other employers lay off people. Individuals who continue to keep their workplaces may find their hours and salaries reduced. Existing renters may become late with their rent payments in such cases.

Income Rates

Median household and per capita income rates help you to see if a sufficient number of ideal tenants reside in that city. Historical salary figures will communicate to you if salary raises will allow you to adjust rental rates to achieve your investment return expectations.

Number of New Jobs Created

A growing job market provides a consistent flow of renters. More jobs mean new renters. This enables you to buy additional lease real estate and replenish current vacancies.

School Ratings

School quality in the area will have a significant influence on the local residential market. Companies that are interested in moving require superior schools for their employees. Reliable tenants are a consequence of a strong job market. Homeowners who move to the area have a positive impact on property prices. Highly-rated schools are a key component for a strong property investment market.

Property Appreciation Rates

The basis of a long-term investment plan is to keep the asset. You have to ensure that the odds of your property appreciating in value in that area are likely. You don’t need to take any time looking at communities showing unsatisfactory property appreciation rates.

A short-term rental is a furnished unit where a renter stays for less than one month. Long-term rental units, such as apartments, require lower payment per night than short-term rentals. Short-term rental properties may involve more constant care and tidying.

Home sellers waiting to relocate into a new home, tourists, and people traveling for work who are stopping over in the area for a few days prefer renting a residential unit short term. Any property owner can turn their home into a short-term rental unit with the tools made available by online home-sharing sites like VRBO and AirBnB. This makes short-term rental strategy a feasible technique to endeavor residential property investing.

The short-term rental venture involves interaction with occupants more often compared to annual rental properties. This determines that property owners deal with disputes more regularly. You might need to protect your legal liability by working with one of the best Summit County law firms for real estate.

Factors to Consider

Short-Term Rental Income

You have to find the level of rental revenue you’re looking for according to your investment plan. An area’s short-term rental income rates will quickly tell you if you can expect to accomplish your projected rental income levels.

Median Property Prices

You also must know the amount you can allow to invest. To find out if a region has potential for investment, look at the median property prices. You can also use median market worth in specific neighborhoods within the market to pick communities for investing.

Price Per Square Foot

Price per square foot can be affected even by the design and floor plan of residential units. A home with open entrances and vaulted ceilings can’t be contrasted with a traditional-style residential unit with more floor space. You can use the price per sq ft criterion to obtain a good overall idea of property values.

Short-Term Rental Occupancy Rate

The percentage of short-term rentals that are presently rented in an area is vital knowledge for an investor. If almost all of the rental units have few vacancies, that community necessitates new rentals. Low occupancy rates communicate that there are more than enough short-term rental properties in that community.

Short-Term Rental Cash-on-Cash Return

To determine if you should put your money in a specific property or community, evaluate the cash-on-cash return. Take your projected Net Operating Income (NOI) and divide it by your investment cash budget. The percentage you get is your cash-on-cash return. The higher the percentage, the sooner your investment funds will be repaid and you will start making profits. Lender-funded investment ventures can show better cash-on-cash returns because you will be spending less of your own resources.

Average Short-Term Rental Capitalization (Cap) Rates

Another measurement indicates the market value of real estate as a return-yielding asset — average short-term rental capitalization (cap) rate. A rental unit that has a high cap rate as well as charges average market rental prices has a high market value. When investment real estate properties in a region have low cap rates, they typically will cost too much. Divide your estimated Net Operating Income (NOI) by the investment property’s market value or purchase price. The result is the per-annum return in a percentage.

Local Attractions

Important festivals and entertainment attractions will attract visitors who will look for short-term rental properties. Individuals come to specific cities to watch academic and sporting events at colleges and universities, see professional sports, cheer for their kids as they compete in fun events, party at annual carnivals, and stop by theme parks. At certain occasions, locations with outdoor activities in mountainous areas, oceanside locations, or along rivers and lakes will bring in crowds of people who need short-term rentals.

When a home flipper purchases a property cheaper than its market worth, fixes it and makes it more valuable, and then sells the house for a profit, they are referred to as a fix and flip investor. The essentials to a successful investment are to pay a lower price for real estate than its current value and to correctly analyze the amount needed to make it sellable.

Examine the values so that you know the actual After Repair Value (ARV). You always want to check how long it takes for properties to sell, which is shown by the Days on Market (DOM) information. Disposing of the property without delay will keep your expenses low and secure your revenue.

Assist motivated property owners in finding your firm by featuring it in our catalogue of the best Summit County cash house buyers and Summit County property investors.

In addition, look for top real estate bird dogs in Summit County UT. Professionals listed on our website will help you by immediately discovering possibly lucrative deals ahead of the opportunities being sold.

Factors to Consider

Median Home Price

Median real estate price data is an important indicator for evaluating a prospective investment area. If prices are high, there might not be a stable reserve of fixer-upper real estate in the location. This is a key element of a cost-effective investment.

If regional information shows a fast decline in real property market values, this can highlight the availability of potential short sale properties. You’ll hear about potential investments when you join up with Summit County short sale facilitators. Learn how this works by reading our guide ⁠— What Are the Steps to Buying a Short Sale Home?.

Property Appreciation Rate

The shifts in real estate prices in an area are very important. You are looking for a consistent appreciation of the area’s real estate market rates. Unsteady market worth changes aren’t desirable, even if it is a substantial and quick surge. Purchasing at a bad period in an unsteady market condition can be problematic.

Average Renovation Costs

A thorough analysis of the region’s construction expenses will make a significant difference in your area selection. Other spendings, such as authorizations, can shoot up your budget, and time which may also develop into an added overhead. You need to understand whether you will need to hire other experts, like architects or engineers, so you can be prepared for those expenses.

Population Growth

Population growth is a good indicator of the potential or weakness of the location’s housing market. When there are purchasers for your rehabbed real estate, the data will indicate a positive population growth.

Median Population Age

The median citizens’ age can also tell you if there are enough home purchasers in the location. The median age mustn’t be lower or higher than that of the regular worker. A high number of such people indicates a significant supply of home purchasers. Older individuals are planning to downsize, or relocate into senior-citizen or retiree neighborhoods.

Unemployment Rate

You aim to see a low unemployment level in your potential community. The unemployment rate in a prospective investment market should be lower than the country’s average. When the city’s unemployment rate is lower than the state average, that is a sign of a good financial market. In order to purchase your rehabbed property, your prospective buyers have to have a job, and their customers as well.

Income Rates

Median household and per capita income rates show you if you will obtain adequate home buyers in that city for your residential properties. Most home purchasers have to get a loan to purchase real estate. The borrower’s income will show how much they can borrow and whether they can buy a house. Median income can help you know whether the standard homebuyer can afford the property you are going to flip. Look for cities where the income is increasing. When you need to raise the purchase price of your residential properties, you want to be certain that your home purchasers’ income is also improving.

Number of New Jobs Created

Finding out how many jobs appear each year in the area adds to your confidence in a city’s real estate market. Houses are more conveniently sold in an area that has a vibrant job market. Experienced skilled workers looking into purchasing a home and settling choose moving to cities where they won’t be out of work.

Hard Money Loan Rates

Investors who acquire, renovate, and liquidate investment real estate like to enlist hard money and not traditional real estate funding. This enables investors to quickly pick up undervalued assets. Review the best Summit County hard money lenders and analyze financiers’ charges.

Someone who wants to understand more about hard money funding options can learn what they are as well as the way to use them by reading our article titled How Hard Money Lending Works.

Wholesaling is a real estate investment approach that entails locating properties that are interesting to investors and signing a purchase contract. A real estate investor then “buys” the sale and purchase agreement from you. The contracted property is bought by the real estate investor, not the real estate wholesaler. The wholesaler doesn’t sell the residential property itself — they simply sell the purchase agreement.

The wholesaling form of investing involves the employment of a title insurance firm that grasps wholesale deals and is informed about and active in double close purchases. Look for title services for wholesale investors in Summit County UT that we collected for you.

To know how real estate wholesaling works, look through our detailed article What Is Wholesaling in Real Estate Investing?. When employing this investing plan, include your business in our directory of the best real estate wholesalers in Summit County UT. This will help your potential investor buyers find and reach you.

Factors to Consider

Median Home Prices

Median home values in the city being assessed will quickly tell you if your real estate investors’ preferred properties are situated there. An area that has a large pool of the reduced-value properties that your investors want will show a below-than-average median home price.

Accelerated weakening in property prices could result in a lot of homes with no equity that appeal to short sale flippers. This investment plan often brings numerous unique perks. Nevertheless, be cognizant of the legal risks. Discover more about wholesaling a short sale property from our extensive explanation. When you are prepared to start wholesaling, look through Summit County top short sale attorneys as well as Summit County top-rated foreclosure law offices lists to discover the appropriate counselor.

Property Appreciation Rate

Median home price trends are also critical. Real estate investors who plan to liquidate their properties in the future, like long-term rental investors, require a market where property purchase prices are growing. Decreasing market values show an equivalently weak rental and home-selling market and will scare away investors.

Population Growth

Population growth information is an important indicator that your potential investors will be familiar with. An expanding population will require additional residential units. This combines both rental and resale properties. When a community is declining in population, it does not require new residential units and real estate investors will not be active there.

Median Population Age

A vibrant housing market needs residents who are initially leasing, then transitioning into homebuyers, and then moving up in the residential market. To allow this to be possible, there has to be a solid employment market of potential renters and homeowners. That is why the area’s median age should be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income should be rising in a friendly housing market that real estate investors want to participate in. If tenants’ and homebuyers’ incomes are growing, they can handle soaring lease rates and real estate purchase costs. Experienced investors avoid places with weak population income growth figures.

Unemployment Rate

The area’s unemployment rates are a vital consideration for any prospective sales agreement buyer. High unemployment rate causes many renters to make late rent payments or miss payments completely. Long-term real estate investors will not purchase a home in a place like this. Renters cannot move up to homeownership and existing homeowners can’t put up for sale their property and go up to a bigger residence. This is a concern for short-term investors buying wholesalers’ contracts to renovate and flip a home.

Number of New Jobs Created

Knowing how often new job openings are created in the community can help you find out if the house is positioned in a dynamic housing market. Job creation means a higher number of workers who have a need for a place to live. Whether your buyer pool is made up of long-term or short-term investors, they will be drawn to a region with consistent job opening generation.

Average Renovation Costs

Rehab expenses have a large effect on an investor’s returns. When a short-term investor improves a building, they have to be prepared to sell it for more than the total cost of the acquisition and the renovations. Give preference to lower average renovation costs.

This strategy involves obtaining a loan (mortgage note) from a mortgage holder at a discount. When this occurs, the note investor takes the place of the borrower’s mortgage lender.

When a loan is being repaid on time, it is considered a performing note. Performing loans earn you stable passive income. Non-performing notes can be rewritten or you could acquire the collateral at a discount by initiating a foreclosure procedure.

At some time, you might create a mortgage note portfolio and notice you are lacking time to manage your loans on your own. In this case, you can opt to employ one of residential mortgage servicers in Summit County UT that would basically convert your portfolio into passive income.

Should you determine that this model is ideal for you, put your firm in our directory of Summit County top real estate note buying companies. Once you do this, you will be noticed by the lenders who promote profitable investment notes for acquisition by investors such as yourself.

Factors to consider

Foreclosure Rates

Investors searching for valuable loans to buy will hope to see low foreclosure rates in the area. High rates could indicate opportunities for non-performing mortgage note investors, however they have to be cautious. If high foreclosure rates are causing a weak real estate environment, it may be difficult to get rid of the property after you seize it through foreclosure.

Foreclosure Laws

Successful mortgage note investors are thoroughly aware of their state’s regulations for foreclosure. Many states use mortgage documents and others use Deeds of Trust. You may need to receive the court’s permission to foreclose on a mortgage note’s collateral. Note owners don’t have to have the court’s approval with a Deed of Trust.

Mortgage Interest Rates

The interest rate is indicated in the mortgage notes that are bought by mortgage note investors. This is a big component in the investment returns that lenders earn. No matter the type of investor you are, the loan note’s interest rate will be significant for your forecasts.

Conventional lenders charge different mortgage interest rates in different locations of the country. Private loan rates can be moderately higher than traditional loan rates considering the larger risk taken on by private lenders.

Note investors should always be aware of the current market interest rates, private and traditional, in possible note investment markets.

Demographics

A successful mortgage note investment strategy incorporates a research of the community by utilizing demographic information. It is important to know if an adequate number of people in the community will continue to have good paying jobs and incomes in the future.
Performing note investors seek clients who will pay without delay, developing a consistent income source of mortgage payments.

Non-performing mortgage note purchasers are looking at comparable elements for various reasons. If these note buyers have to foreclose, they will require a thriving real estate market when they unload the repossessed property.

Property Values

Note holders want to find as much equity in the collateral as possible. If the property value isn’t significantly higher than the loan balance, and the mortgage lender has to start foreclosure, the house might not sell for enough to payoff the loan. As mortgage loan payments decrease the amount owed, and the market value of the property goes up, the homeowner’s equity increases.

Property Taxes

Usually homeowners pay property taxes to lenders in monthly installments together with their loan payments. When the property taxes are payable, there should be adequate money being held to pay them. If loan payments aren’t being made, the mortgage lender will have to either pay the property taxes themselves, or they become past due. If taxes are past due, the government’s lien leapfrogs any other liens to the head of the line and is satisfied first.

Because tax escrows are combined with the mortgage payment, growing property taxes mean higher mortgage loan payments. This makes it tough for financially strapped homeowners to make their payments, so the loan might become delinquent.

Real Estate Market Strength

Both performing and non-performing mortgage note investors can do business in a good real estate environment. The investors can be assured that, if need be, a defaulted property can be liquidated at a price that makes a profit.

Mortgage note investors additionally have an opportunity to originate mortgage loans directly to borrowers in consistent real estate markets. This is a good stream of income for successful investors.

Some real estate investment firms are formed as trusts termed Real Estate Investment Trusts or REITs. REITs are invented to allow ordinary people to buy into properties. The everyday investor can afford to invest in a REIT.

Participants in such organizations are entirely passive investors. The exposure that the investors are assuming is spread within a selection of investment properties. Investors are able to sell their REIT shares whenever they need. But REIT investors do not have the capability to choose individual assets or markets. You are restricted to the REIT’s portfolio of real estate properties for investment.

A Real Estate Investment Fund is a mutual fund that owns stocks of real estate firms. The investment assets aren’t owned by the fund — they are held by the businesses the fund invests in. This is an additional method for passive investors to spread their investments with real estate avoiding the high startup expense or exposure. Whereas REITs must disburse dividends to its members, funds do not. As with other stocks, investment funds’ values go up and decrease with their share price.

You can select a real estate fund that specializes in a particular category of real estate firm, such as commercial, but you cannot suggest the fund’s investment real estate properties or markets. As passive investors, fund participants are satisfied to permit the administration of the fund make all investment decisions.