Ultimate Union County Real Estate Investing Guide for 2024

The acronym BRRRR is an illustration of a long-term lease strategy — Buy, Rehab, Rent, Refinance, Repeat. This is a strategy to expand your investment portfolio not just purchase a single rental home. This method hinges on your capability to extract cash out when you refinance.

When you are done with renovating the home, the value has to be more than your combined acquisition and fix-up spendings. Next, you pocket the equity you produced from the asset in a “cash-out” mortgage refinance. You employ that money to purchase an additional rental and the process starts again. You add appreciating assets to the balance sheet and rental revenue to your cash flow.

When an investor owns a significant portfolio of investment properties, it is wise to pay a property manager and designate a passive income source. Find the best Union County property management companies by browsing our directory.

Factors to Consider

Population Growth

The increase or decline of a community’s population is an accurate benchmark of the market’s long-term desirability for rental property investors. When you see robust population expansion, you can be certain that the region is attracting potential renters to it. Employers think of this market as an attractive community to move their company, and for employees to relocate their families. Rising populations create a strong renter mix that can handle rent increases and homebuyers who help keep your property prices high.

Property Taxes

Property taxes, ongoing upkeep spendings, and insurance directly impact your bottom line. Excessive real estate tax rates will decrease a real estate investor’s profits. If property tax rates are too high in a particular market, you probably prefer to look somewhere else.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property values and median lease rates that will signal how much rent the market can handle. An investor can not pay a high amount for a rental home if they can only charge a low rent not letting them to repay the investment in a reasonable time. You need to see a lower p/r to be assured that you can price your rental rates high enough for good profits.

Median Gross Rents

Median gross rents let you see whether an area’s lease market is robust. Median rents should be increasing to justify your investment. You will not be able to realize your investment goals in a city where median gross rental rates are shrinking.

Median Population Age

Median population age in a dependable long-term investment environment must mirror the typical worker’s age. This could also illustrate that people are relocating into the region. A high median age illustrates that the existing population is aging out with no replacement by younger people relocating there. That is a poor long-term economic prospect.

Employment Base Diversity

A varied amount of businesses in the location will boost your chances of success. If there are only a couple major hiring companies, and either of such relocates or goes out of business, it can lead you to lose paying customers and your asset market prices to drop.

Unemployment Rate

You can’t reap the benefits of a steady rental cash flow in a community with high unemployment. Non-working individuals won’t be able to pay for goods or services. The still employed people may see their own paychecks cut. This may increase the instances of missed rent payments and defaults.

Income Rates

Median household and per capita income rates show you if an adequate amount of desirable renters dwell in that community. Current income figures will illustrate to you if salary raises will enable you to adjust rental rates to meet your profit calculations.

Number of New Jobs Created

The reliable economy that you are on the lookout for will be producing a large amount of jobs on a constant basis. New jobs mean more tenants. This allows you to purchase more lease real estate and replenish existing vacancies.

School Ratings

School ratings in the district will have a huge effect on the local residential market. When a business owner evaluates a market for possible expansion, they know that first-class education is a must-have for their workers. Moving businesses relocate and draw potential renters. New arrivals who are looking for a residence keep property market worth up. Good schools are a vital requirement for a robust property investment market.

Property Appreciation Rates

Property appreciation rates are an essential component of your long-term investment plan. You have to be certain that your assets will appreciate in value until you want to dispose of them. You don’t need to take any time reviewing areas that have subpar property appreciation rates.

A short-term rental is a furnished residence where a tenant stays for less than a month. Short-term rentals charge a higher rent per night than in long-term rental properties. Short-term rental units may need more continual maintenance and tidying.

Short-term rentals are popular with corporate travelers who are in the region for several days, people who are moving and want transient housing, and backpackers. Anyone can convert their residence into a short-term rental unit with the know-how given by virtual home-sharing platforms like VRBO and AirBnB. Short-term rentals are viewed to be an effective way to start investing in real estate.

Short-term rental properties require engaging with occupants more often than long-term rental units. This dictates that landlords face disagreements more regularly. You might need to cover your legal bases by engaging one of the best Union County real estate law firms.

Factors to Consider

Short-Term Rental Income

You must decide how much income needs to be earned to make your effort worthwhile. A market’s short-term rental income rates will quickly reveal to you if you can anticipate to accomplish your estimated rental income levels.

Median Property Prices

When acquiring real estate for short-term rentals, you need to determine the amount you can allot. To see if a market has possibilities for investment, study the median property prices. You can also employ median values in particular sections within the market to select cities for investment.

Price Per Square Foot

Price per sq ft provides a general picture of property prices when looking at similar properties. If you are examining the same types of property, like condominiums or detached single-family residences, the price per square foot is more consistent. If you take this into consideration, the price per sq ft may provide you a broad idea of real estate prices.

Short-Term Rental Occupancy Rate

A peek into the area’s short-term rental occupancy rate will tell you whether there is a need in the district for more short-term rentals. A high occupancy rate indicates that a fresh supply of short-term rental space is required. When the rental occupancy indicators are low, there isn’t much space in the market and you should search in another location.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return can inform you if the property is a reasonable use of your cash. Take your expected Net Operating Income (NOI) and divide it by your investment cash budget. The resulting percentage is your cash-on-cash return. When an investment is lucrative enough to repay the amount invested promptly, you will receive a high percentage. When you take a loan for a fraction of the investment amount and spend less of your own cash, you will see a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This criterion compares investment property worth to its annual return. High cap rates indicate that income-producing assets are available in that region for decent prices. If investment real estate properties in a community have low cap rates, they typically will cost more money. You can determine the cap rate for potential investment property by dividing the Net Operating Income (NOI) by the market worth or purchase price of the property. The percentage you will obtain is the property’s cap rate.

Local Attractions

Short-term renters are usually travellers who come to a community to attend a yearly special activity or visit unique locations. Tourists visit specific regions to enjoy academic and athletic activities at colleges and universities, be entertained by competitions, cheer for their children as they participate in fun events, have the time of their lives at annual carnivals, and drop by theme parks. Must-see vacation attractions are located in mountain and coastal points, along waterways, and national or state nature reserves.

The fix and flip strategy involves buying a property that needs repairs or rebuilding, putting added value by upgrading the property, and then selling it for its full market worth. The essentials to a lucrative investment are to pay a lower price for real estate than its present market value and to correctly determine the amount needed to make it sellable.

Examine the housing market so that you are aware of the accurate After Repair Value (ARV). You always need to analyze the amount of time it takes for homes to sell, which is illustrated by the Days on Market (DOM) information. Liquidating the home immediately will help keep your expenses low and ensure your profitability.

Help determined real estate owners in finding your business by listing it in our catalogue of the best Union County cash home buyers and top Union County property investment companies.

Additionally, look for bird dogs for real estate investors in Union County IN. These specialists specialize in skillfully uncovering promising investment ventures before they hit the marketplace.

Factors to Consider

Median Home Price

The location’s median housing value will help you find a suitable city for flipping houses. When prices are high, there might not be a stable source of fixer-upper residential units available. You want lower-priced homes for a successful deal.

When market information shows a sharp decline in property market values, this can highlight the accessibility of possible short sale real estate. You’ll learn about potential investments when you join up with Union County short sale specialists. Uncover more concerning this kind of investment by reading our guide How to Buy a Short Sale Property.

Property Appreciation Rate

Are home market values in the area on the way up, or going down? Stable growth in median values demonstrates a robust investment market. Real estate values in the city need to be growing consistently, not quickly. When you’re buying and selling swiftly, an erratic environment can harm your venture.

Average Renovation Costs

A comprehensive analysis of the community’s renovation costs will make a significant difference in your market choice. Other spendings, like certifications, may inflate your budget, and time which may also develop into additional disbursement. You have to be aware if you will be required to use other contractors, such as architects or engineers, so you can get ready for those costs.

Population Growth

Population growth is a good indicator of the strength or weakness of the community’s housing market. Flat or negative population growth is an indicator of a feeble market with not a lot of buyers to justify your investment.

Median Population Age

The median residents’ age is a direct indication of the supply of qualified home purchasers. The median age in the market should be the one of the typical worker. People in the local workforce are the most dependable home buyers. People who are preparing to exit the workforce or are retired have very specific residency requirements.

Unemployment Rate

While checking a location for real estate investment, keep your eyes open for low unemployment rates. An unemployment rate that is lower than the nation’s median is preferred. If it’s also lower than the state average, that is even more preferable. If you don’t have a dynamic employment base, a region can’t provide you with qualified homebuyers.

Income Rates

Median household and per capita income are a reliable gauge of the robustness of the housing market in the community. The majority of people who buy residential real estate have to have a mortgage loan. To be issued a home loan, a home buyer can’t be using for a house payment a larger amount than a specific percentage of their salary. You can determine from the market’s median income whether many individuals in the city can manage to purchase your real estate. You also need to have salaries that are expanding consistently. When you need to increase the price of your homes, you want to be sure that your home purchasers’ income is also growing.

Number of New Jobs Created

The number of jobs created on a regular basis reflects if wage and population increase are viable. An increasing job market indicates that a larger number of prospective home buyers are comfortable with purchasing a home there. With more jobs appearing, more potential buyers also migrate to the city from other cities.

Hard Money Loan Rates

Fix-and-flip property investors regularly employ hard money loans instead of typical loans. Hard money loans allow these investors to take advantage of hot investment projects without delay. Discover hard money lending companies in Union County IN and estimate their rates.

Investors who aren’t well-versed concerning hard money loans can discover what they ought to understand with our resource for newbies — How Do Hard Money Loans Work?.

As a real estate wholesaler, you enter a purchase contract to purchase a home that other real estate investors will want. But you do not buy it: once you control the property, you get someone else to take your place for a price. The investor then finalizes the purchase. You’re selling the rights to the purchase contract, not the home itself.

This method includes utilizing a title firm that’s knowledgeable about the wholesale contract assignment procedure and is qualified and predisposed to coordinate double close purchases. Search for title companies for wholesalers in Union County IN that we collected for you.

To understand how wholesaling works, study our insightful article Complete Guide to Real Estate Wholesaling as an Investment Strategy. As you manage your wholesaling activities, place your firm in HouseCashin’s list of Union County top wholesale property investors. This will help any potential customers to see you and initiate a contact.

Factors to Consider

Median Home Prices

Median home prices in the community will tell you if your ideal price level is possible in that city. A region that has a large source of the below-market-value residential properties that your customers need will show a lower median home purchase price.

A quick depreciation in the price of property could generate the abrupt availability of homes with owners owing more than market worth that are desired by wholesalers. This investment plan regularly carries multiple uncommon perks. Nevertheless, there may be risks as well. Learn about this from our in-depth blog post How Can You Wholesale a Short Sale Property?. When you have resolved to try wholesaling short sale homes, make sure to hire someone on the directory of the best short sale real estate attorneys in Union County IN and the best foreclosure lawyers in Union County IN to help you.

Property Appreciation Rate

Property appreciation rate boosts the median price statistics. Real estate investors who want to resell their properties anytime soon, such as long-term rental landlords, need a location where residential property market values are increasing. A weakening median home value will illustrate a weak leasing and home-buying market and will exclude all sorts of investors.

Population Growth

Population growth figures are essential for your potential contract buyers. An increasing population will need more residential units. They are aware that this will include both rental and owner-occupied housing units. If a location is shrinking in population, it does not require new residential units and real estate investors will not look there.

Median Population Age

A dynamic housing market requires people who start off renting, then transitioning into homeownership, and then moving up in the residential market. A city with a large workforce has a consistent supply of renters and buyers. When the median population age is the age of wage-earning citizens, it shows a vibrant housing market.

Income Rates

The median household and per capita income in a stable real estate investment market should be on the upswing. Income growth shows a location that can keep up with rental rate and real estate listing price increases. That will be crucial to the real estate investors you want to attract.

Unemployment Rate

The city’s unemployment stats are a vital point to consider for any potential contracted house purchaser. High unemployment rate forces more renters to delay rental payments or default altogether. Long-term real estate investors who depend on steady lease income will do poorly in these markets. High unemployment creates concerns that will keep people from buying a property. This is a challenge for short-term investors buying wholesalers’ contracts to fix and resell a property.

Number of New Jobs Created

The amount of jobs produced on a yearly basis is an essential part of the residential real estate framework. More jobs created result in more employees who need homes to lease and purchase. Employment generation is helpful for both short-term and long-term real estate investors whom you count on to take on your contracted properties.

Average Renovation Costs

An imperative variable for your client investors, specifically fix and flippers, are rehab expenses in the area. Short-term investors, like home flippers, don’t earn anything when the price and the rehab expenses equal to a higher amount than the After Repair Value (ARV) of the house. The less you can spend to rehab a home, the better the location is for your potential contract buyers.

Mortgage note investing involves buying a loan (mortgage note) from a lender for less than the balance owed. When this happens, the investor takes the place of the client’s lender.

Performing loans mean mortgage loans where the debtor is regularly current on their mortgage payments. Performing loans give you stable passive income. Note investors also obtain non-performing loans that they either modify to assist the debtor or foreclose on to buy the collateral below market worth.

Someday, you could have a large number of mortgage notes and have a hard time finding additional time to service them on your own. In this case, you can opt to hire one of mortgage loan servicers in Union County IN that will basically turn your investment into passive cash flow.

Should you decide to try this investment plan, you should place your business in our directory of the best real estate note buyers in Union County IN. Joining will help you become more visible to lenders offering desirable opportunities to note buyers like yourself.

Factors to consider

Foreclosure Rates

Performing note buyers prefer areas with low foreclosure rates. If the foreclosure rates are high, the community could nevertheless be profitable for non-performing note buyers. If high foreclosure rates are causing a slow real estate market, it might be challenging to resell the property after you seize it through foreclosure.

Foreclosure Laws

Successful mortgage note investors are completely well-versed in their state’s regulations regarding foreclosure. They’ll know if the state requires mortgages or Deeds of Trust. Lenders may need to get the court’s approval to foreclose on a mortgage note’s collateral. Note owners do not need the judge’s agreement with a Deed of Trust.

Mortgage Interest Rates

Purchased mortgage notes come with a negotiated interest rate. This is an important factor in the investment returns that you earn. Interest rates are significant to both performing and non-performing mortgage note investors.

Traditional lenders charge dissimilar mortgage loan interest rates in various regions of the US. Mortgage loans offered by private lenders are priced differently and may be higher than traditional mortgage loans.

Mortgage note investors ought to always be aware of the current local interest rates, private and traditional, in possible investment markets.

Demographics

A lucrative mortgage note investment plan uses a review of the region by using demographic information. Note investors can interpret a great deal by estimating the size of the populace, how many residents are working, how much they earn, and how old the residents are.
A young growing area with a strong employment base can provide a reliable revenue stream for long-term note buyers hunting for performing mortgage notes.

Note investors who purchase non-performing notes can also make use of vibrant markets. If foreclosure is necessary, the foreclosed home is more easily liquidated in a strong market.

Property Values

As a note investor, you must search for borrowers that have a cushion of equity. If the lender has to foreclose on a mortgage loan with little equity, the foreclosure auction may not even repay the amount invested in the note. The combination of loan payments that lessen the loan balance and yearly property market worth appreciation raises home equity.

Property Taxes

Usually, lenders accept the property taxes from the borrower every month. The lender passes on the payments to the Government to make sure they are paid without delay. The lender will need to make up the difference if the house payments stop or they risk tax liens on the property. Property tax liens leapfrog over all other liens.

If an area has a history of growing property tax rates, the total house payments in that region are regularly growing. Past due borrowers might not be able to keep up with rising loan payments and might cease making payments altogether.

Real Estate Market Strength

A community with appreciating property values has good potential for any mortgage note investor. Because foreclosure is a critical component of note investment strategy, increasing real estate values are crucial to finding a good investment market.

Mortgage note investors additionally have a chance to originate mortgage loans directly to borrowers in consistent real estate regions. For successful investors, this is a beneficial part of their investment plan.

A trust owning income-generating real estate and that offers shares to investors is a REIT — Real Estate Investment Trust. Before REITs were created, investing in properties was too costly for the majority of people. The everyday investor is able to come up with the money to invest in a REIT.

Shareholders’ investment in a REIT falls under passive investment. REITs oversee investors’ risk with a diversified group of assets. Shares may be unloaded when it is convenient for you. But REIT investors do not have the ability to choose particular assets or locations. The properties that the REIT picks to buy are the assets you invest in.

Real estate investment funds are essentially mutual funds that specialize in real estate companies, such as REITs. Any actual real estate property is possessed by the real estate companies rather than the fund. Investment funds may be an affordable way to incorporate real estate properties in your allocation of assets without avoidable liability. Whereas REITs must distribute dividends to its members, funds do not. As with other stocks, investment funds’ values increase and fall with their share market value.

You can select a fund that specializes in a selected kind of real estate you’re familiar with, but you do not get to choose the location of each real estate investment. As passive investors, fund participants are happy to allow the directors of the fund determine all investment determinations.