Ultimate Union County Real Estate Investing Guide for 2024

BRRRR means “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a system for continuous expansion. A crucial piece of this plan is to be able to take a “cash-out” refinance.

When you are done with fixing the home, its value must be higher than your combined purchase and renovation expenses. The property is refinanced based on the ARV and the balance, or equity, is given to you in cash. You buy your next investment property with the cash-out funds and start all over again. You acquire additional assets and constantly grow your lease revenues.

When you have created a significant collection of income creating properties, you may choose to find others to oversee all rental business while you receive recurring income. Discover top Union County property management companies by looking through our list.

Factors to Consider

Population Growth

The increase or decline of a market’s population is a good benchmark of the area’s long-term desirability for rental property investors. If you find robust population growth, you can be sure that the area is attracting possible renters to it. The location is desirable to businesses and employees to move, work, and raise households. This equates to reliable renters, more lease revenue, and a greater number of likely buyers when you want to sell the property.

Property Taxes

Real estate taxes, similarly to insurance and upkeep expenses, may be different from market to market and must be looked at carefully when predicting possible returns. Excessive expenses in these areas threaten your investment’s profitability. Locations with steep property taxes aren’t considered a reliable environment for short- and long-term investment and need to be bypassed.

Price to Rent Ratio

Price to rent ratio (p/r) is a market signal that shows you the amount you can expect to demand as rent. If median property values are strong and median rents are small — a high p/r, it will take more time for an investment to repay your costs and attain good returns. A higher p/r tells you that you can charge lower rent in that location, a smaller one signals you that you can demand more.

Median Gross Rents

Median gross rents are a significant illustration of the vitality of a lease market. Search for a consistent increase in median rents year over year. You will not be able to realize your investment goals in a region where median gross rents are going down.

Median Population Age

Median population age will be nearly the age of a normal worker if a location has a good stream of renters. This could also illustrate that people are moving into the area. When working-age people are not coming into the region to succeed retirees, the median age will increase. An active real estate market can’t be maintained by retiring workers.

Employment Base Diversity

A varied employment base is what a smart long-term investor landlord will look for. When people are concentrated in only several dominant employers, even a minor issue in their business could cost you a lot of tenants and raise your liability tremendously.

Unemployment Rate

You will not enjoy a secure rental cash flow in a location with high unemployment. People who don’t have a job will not be able to purchase products or services. This can result in too many retrenchments or fewer work hours in the region. Remaining tenants may delay their rent in such cases.

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 information will illustrate to you if income increases will allow you to adjust rental fees to achieve your profit calculations.

Number of New Jobs Created

The more jobs are continually being provided in a region, the more consistent your tenant source will be. An economy that creates jobs also adds more stakeholders in the real estate market. Your strategy of renting and acquiring additional rentals needs an economy that will provide more jobs.

School Ratings

School reputation in the city will have a significant influence on the local residential market. Employers that are interested in moving prefer good schools for their workers. Business relocation provides more renters. Home prices increase thanks to new employees who are buying homes. Quality schools are a key factor for a reliable real estate investment market.

Property Appreciation Rates

The essence of a long-term investment method is to hold the asset. You need to make sure that the chances of your investment increasing in value in that community are good. You don’t want to allot any time examining markets that have below-standard property appreciation rates.

A furnished residence where renters live for less than a month is referred to as a short-term rental. The nightly rental rates are typically higher in short-term rentals than in long-term ones. Because of the increased number of occupants, short-term rentals entail additional frequent repairs and tidying.

Short-term rentals are mostly offered to people on a business trip who are in town for a few days, those who are relocating and want temporary housing, and backpackers. Any homeowner can turn their residence into a short-term rental unit with the know-how offered by virtual home-sharing sites like VRBO and AirBnB. A simple way to enter real estate investing is to rent a property you already own for short terms.

Short-term rental unit owners require dealing personally with the tenants to a larger degree than the owners of annually rented units. That means that property owners deal with disagreements more frequently. Think about covering yourself and your assets by adding one of real estate law experts in Union County KY to your network of professionals.

Factors to Consider

Short-Term Rental Income

Initially, figure out how much rental income you should earn to reach your estimated profits. A city’s short-term rental income rates will promptly show you when you can predict to reach your estimated income range.

Median Property Prices

When buying real estate for short-term rentals, you must figure out the budget you can spend. To find out if an area has possibilities for investment, look at the median property prices. You can also employ median values in targeted neighborhoods within the market to select locations for investment.

Price Per Square Foot

Price per sq ft could be inaccurate if you are comparing different units. If you are examining similar types of property, like condominiums or separate single-family residences, the price per square foot is more reliable. Price per sq ft may be a fast way to analyze different communities or buildings.

Short-Term Rental Occupancy Rate

The need for additional rental units in an area may be seen by studying the short-term rental occupancy rate. A location that requires more rental properties will have a high occupancy level. Weak occupancy rates mean that there are more than too many short-term units in that area.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will show you if the property is a practical use of your own funds. Take your projected Net Operating Income (NOI) and divide it by your investment cash budget. The result you get is a percentage. If an investment is lucrative enough to pay back the amount invested soon, you’ll have a high percentage. Loan-assisted investments will have a stronger cash-on-cash return because you’re spending less of your funds.

Average Short-Term Rental Capitalization (Cap) Rates

This criterion shows the comparability of rental property worth to its yearly income. High cap rates mean that properties are accessible in that region for decent prices. When investment real estate properties in a community have low cap rates, they generally will cost more money. You can get the cap rate for possible investment property by dividing the Net Operating Income (NOI) by the Fair Market Value or purchase price of the property. The result is the yearly return in a percentage.

Local Attractions

Short-term rental apartments are preferred in regions where visitors are attracted by activities and entertainment venues. If a city has sites that regularly produce sought-after events, such as sports coliseums, universities or colleges, entertainment halls, and amusement parks, it can attract people from out of town on a constant basis. At specific times of the year, locations with outside activities in mountainous areas, seaside locations, or along rivers and lakes will attract lots of visitors who require short-term residence.

The fix and flip approach means acquiring a property that requires fixing up or renovation, generating added value by upgrading the property, and then liquidating it for a better market price. The essentials to a successful fix and flip are to pay a lower price for the home than its current market value and to accurately compute the amount needed to make it sellable.

You also want to analyze the resale market where the property is situated. The average number of Days On Market (DOM) for homes listed in the city is vital. To profitably “flip” a property, you need to resell the repaired house before you are required to shell out cash to maintain it.

To help distressed residence sellers locate you, place your business in our directories of cash property buyers in Union County KY and property investment companies in Union County KY.

Also, work with Union County bird dogs for real estate investors. Experts listed here will help you by quickly finding potentially profitable ventures ahead of them being sold.

Factors to Consider

Median Home Price

When you hunt for a profitable area for property flipping, check the median house price in the neighborhood. If purchase prices are high, there might not be a consistent amount of fixer-upper residential units in the area. This is a basic element of a fix and flip market.

When you detect a rapid decrease in property values, this may indicate that there are possibly properties in the neighborhood that qualify for a short sale. Investors who work with short sale negotiators in Union County KY receive continual notices about potential investment properties. You’ll find additional information concerning short sales in our extensive blog post ⁠— How to Buy Short Sale Real Estate.

Property Appreciation Rate

Are real estate values in the market going up, or going down? You need a market where real estate market values are steadily and continuously on an upward trend. Unreliable value changes are not desirable, even if it is a significant and quick increase. Acquiring at an inappropriate period in an unreliable market can be catastrophic.

Average Renovation Costs

You’ll need to evaluate building costs in any future investment area. The time it takes for acquiring permits and the municipality’s requirements for a permit application will also influence your plans. To create an on-target financial strategy, you will need to know whether your plans will be required to involve an architect or engineer.

Population Growth

Population increase is a solid gauge of the potential or weakness of the location’s housing market. When there are buyers for your renovated real estate, the statistics will show a robust population growth.

Median Population Age

The median citizens’ age is an indicator that you may not have thought about. When the median age is equal to the one of the regular worker, it’s a positive sign. A high number of such people shows a substantial pool of homebuyers. People who are preparing to depart the workforce or have already retired have very specific housing needs.

Unemployment Rate

When you find a community showing a low unemployment rate, it’s a good sign of good investment prospects. The unemployment rate in a future investment community should be lower than the nation’s average. If the community’s unemployment rate is lower than the state average, that’s an indicator of a desirable investing environment. To be able to acquire your fixed up property, your prospective buyers need to be employed, and their customers as well.

Income Rates

Median household and per capita income rates show you whether you will see adequate buyers in that market for your residential properties. Most homebuyers normally obtain financing to purchase a house. To qualify for a home loan, a home buyer can’t be using for a house payment more than a specific percentage of their income. You can see from the region’s median income if enough people in the region can manage to purchase your homes. Search for regions where the income is improving. When you need to augment the purchase price of your houses, you need to be sure that your homebuyers’ salaries are also going up.

Number of New Jobs Created

The number of employment positions created on a continual basis reflects whether salary and population growth are viable. An increasing job market indicates that more prospective home buyers are comfortable with buying a house there. With more jobs created, new prospective homebuyers also move to the region from other cities.

Hard Money Loan Rates

Investors who acquire, repair, and flip investment homes are known to engage hard money instead of normal real estate financing. Hard money funds allow these purchasers to take advantage of hot investment opportunities immediately. Look up Union County real estate hard money lenders and compare lenders’ charges.

Those who aren’t well-versed in regard to hard money financing can discover what they need to understand with our resource for those who are only starting — What Is a Hard Money Lender in Real Estate?.

As a real estate wholesaler, you sign a purchase contract to buy a home that other real estate investors might need. When an investor who approves of the property is found, the sale and purchase agreement is sold to them for a fee. The owner sells the home to the real estate investor instead of the real estate wholesaler. The real estate wholesaler doesn’t sell the residential property itself — they simply sell the purchase agreement.

The wholesaling mode of investing includes the employment of a title company that comprehends wholesale purchases and is informed about and active in double close deals. Locate title companies that work with investors in Union County KY that we selected for you.

Discover more about how wholesaling works from our complete guide — Real Estate Wholesaling 101. As you go about your wholesaling activities, put your name in HouseCashin’s list of Union County top home wholesalers. This will let your future investor clients locate and call you.

Factors to Consider

Median Home Prices

Median home prices are instrumental to locating markets where properties are being sold in your investors’ purchase price range. As investors want investment properties that are on sale below market price, you will have to take note of lower median purchase prices as an indirect tip on the possible supply of homes that you may acquire for less than market value.

Rapid deterioration in real estate market worth might lead to a number of real estate with no equity that appeal to short sale investors. This investment strategy often brings numerous different perks. However, it also raises a legal liability. Learn about this from our extensive explanation Can You Wholesale a Short Sale House?. Once you are ready to begin wholesaling, look through Union County top short sale legal advice experts as well as Union County top-rated foreclosure law firms directories to locate the best advisor.

Property Appreciation Rate

Median home value movements clearly illustrate the housing value picture. Many investors, including buy and hold and long-term rental investors, specifically need to find that residential property prices in the area are going up consistently. Dropping market values indicate an equally poor leasing and housing market and will chase away investors.

Population Growth

Population growth figures are essential for your intended purchase contract purchasers. If they see that the population is multiplying, they will conclude that additional residential units are a necessity. There are more people who lease and plenty of clients who buy real estate. A region that has a shrinking population will not interest the investors you need to buy your purchase contracts.

Median Population Age

Real estate investors have to participate in a steady housing market where there is a considerable supply of tenants, newbie homebuyers, and upwardly mobile citizens switching to more expensive properties. This necessitates a robust, stable labor force of individuals who feel confident enough to step up in the housing market. If the median population age mirrors the age of wage-earning citizens, it demonstrates a robust property market.

Income Rates

The median household and per capita income in a good real estate investment market should be increasing. Income hike shows a market that can manage lease rate and home price raises. That will be vital to the property investors you are looking to draw.

Unemployment Rate

Investors whom you offer to take on your sale contracts will regard unemployment stats to be a crucial piece of knowledge. Tenants in high unemployment cities have a difficult time staying current with rent and some of them will skip rent payments altogether. Long-term real estate investors won’t purchase a home in a place like this. Investors can’t rely on renters moving up into their properties when unemployment rates are high. This can prove to be challenging to find fix and flip real estate investors to purchase your purchase agreements.

Number of New Jobs Created

The number of jobs produced yearly is an essential element of the housing framework. Fresh jobs produced mean a high number of workers who require properties to rent and purchase. Long-term real estate investors, like landlords, and short-term investors such as flippers, are gravitating to places with strong job creation rates.

Average Renovation Costs

Improvement costs will be essential to many real estate investors, as they typically acquire inexpensive distressed properties to fix. When a short-term investor repairs a building, they want to be able to sell it for more money than the total expense for the purchase and the rehabilitation. Look for lower average renovation costs.

Note investing involves buying a loan (mortgage note) from a lender for less than the balance owed. This way, you become the lender to the first lender’s borrower.

Performing loans mean mortgage loans where the debtor is consistently on time with their payments. Performing notes bring repeating cash flow for you. Some investors want non-performing notes because when the investor cannot successfully restructure the loan, they can always acquire the property at foreclosure for a below market amount.

At some time, you might grow a mortgage note collection and find yourself needing time to service it by yourself. In this event, you could enlist one of mortgage servicing companies in Union County KY that will basically turn your investment into passive income.

Should you determine to employ this plan, add your project to our directory of real estate note buyers in Union County KY. Being on our list places you in front of lenders who make lucrative investment possibilities accessible to note investors such as you.

Factors to consider

Foreclosure Rates

Low foreclosure rates are an indication that the region has opportunities for performing note investors. Non-performing mortgage note investors can cautiously take advantage of places that have high foreclosure rates too. But foreclosure rates that are high sometimes indicate a slow real estate market where unloading a foreclosed house might be tough.

Foreclosure Laws

Experienced mortgage note investors are completely aware of their state’s regulations concerning foreclosure. Are you faced with a mortgage or a Deed of Trust? A mortgage dictates that the lender goes to court for authority to foreclose. You only have to file a public notice and begin foreclosure process if you are utilizing a Deed of Trust.

Mortgage Interest Rates

The mortgage interest rate is indicated in the mortgage notes that are acquired by note buyers. Your mortgage note investment return will be affected by the interest rate. Interest rates influence the strategy of both types of note investors.

The mortgage loan rates charged by conventional lending companies are not equal everywhere. Loans issued by private lenders are priced differently and may be more expensive than conventional mortgage loans.

Note investors should consistently know the prevailing local interest rates, private and traditional, in potential investment markets.

Demographics

An efficient note investment plan incorporates a research of the region by utilizing demographic information. It’s essential to know whether an adequate number of residents in the market will continue to have reliable jobs and wages in the future.
Performing note investors need borrowers who will pay on time, generating a stable income stream of mortgage payments.

The identical place might also be profitable for non-performing mortgage note investors and their end-game plan. A vibrant regional economy is needed if investors are to locate buyers for properties they’ve foreclosed on.

Property Values

As a note buyer, you should try to find borrowers that have a comfortable amount of equity. This increases the likelihood that a possible foreclosure liquidation will make the lender whole. The combination of mortgage loan payments that lower the loan balance and yearly property value growth increases home equity.

Property Taxes

Payments for real estate taxes are normally given to the mortgage lender simultaneously with the loan payment. The mortgage lender pays the property taxes to the Government to make certain the taxes are paid without delay. The mortgage lender will have to take over if the mortgage payments stop or the investor risks tax liens on the property. If a tax lien is filed, the lien takes a primary position over the lender’s loan.

If property taxes keep increasing, the homeowner’s loan payments also keep growing. Borrowers who are having a hard time handling their mortgage payments might drop farther behind and ultimately default.

Real Estate Market Strength

A place with growing property values has good opportunities for any mortgage note buyer. As foreclosure is an essential component of note investment planning, growing real estate values are critical to finding a desirable investment market.

A vibrant market may also be a potential area for originating mortgage notes. It’s another phase of a mortgage note investor’s career.

A trust buying income-generating real estate properties and that sells shares to people is a REIT — Real Estate Investment Trust. Before REITs were invented, real estate investing used to be too costly for most citizens. REIT shares are affordable to the majority of people.

Shareholders’ participation in a REIT is passive investing. The exposure that the investors are taking is spread among a collection of investment real properties. Participants have the capability to unload their shares at any time. However, REIT investors don’t have the ability to pick individual real estate properties or locations. The assets that the REIT chooses to acquire are the assets you invest in.

Mutual funds that contain shares of real estate companies are termed real estate investment funds. The fund doesn’t own real estate — it owns interest in real estate companies. Investment funds are an affordable way to combine real estate in your allocation of assets without needless liability. Where REITs are meant to distribute dividends to its members, funds do not. Like other stocks, investment funds’ values go up and go down with their share value.

You may select a fund that specializes in a targeted type of real estate you’re expert in, but you do not get to pick the geographical area of every real estate investment. As passive investors, fund participants are content to permit the directors of the fund make all investment choices.