Ultimate Union County Real Estate Investing Guide for 2024

BRRRR stands for “Buy, Rehab, Rent, Refinance, Repeat”. This is a strategy to increase your investment portfolio rather than buy one asset. It is a must that you are qualified to receive a “cash-out” refinance loan for the strategy to work.

The After Repair Value (ARV) of the asset has to equal more than the total acquisition and repair costs. Next, you pocket the equity you produced out of the property in a “cash-out” refinance. You acquire your next investment property with the cash-out amount and begin anew. You buy more and more assets and constantly increase your rental income.

When you’ve built a significant collection of income producing properties, you might decide to find others to manage your operations while you receive mailbox income. Locate Union County property management agencies when you go through our directory of experts.

Factors to Consider

Population Growth

The increase or fall of the population can signal whether that location is appealing to landlords. A growing population typically signals vibrant relocation which equals new renters. Employers view this community as an attractive community to situate their business, and for employees to move their households. This equals dependable renters, greater rental revenue, and a greater number of likely buyers when you need to unload the property.

Property Taxes

Property taxes, maintenance, and insurance expenses are investigated by long-term lease investors for computing expenses to estimate if and how the project will pay off. High spendings in these areas jeopardize your investment’s profitability. If property tax rates are excessive in a specific market, you will need to look elsewhere.

Price to Rent Ratio

The price to rent ratio (p/r) is a contrast of median property prices and median lease rates that will show you how much rent the market can handle. The rate you can charge in a market will determine the sum you are willing to pay based on the time it will take to recoup those costs. You are trying to discover a lower p/r to be assured that you can price your rental rates high enough to reach acceptable returns.

Median Gross Rents

Median gross rents are a critical sign of the strength of a lease market. Median rents must be growing to validate your investment. Dropping rents are a warning to long-term rental investors.

Median Population Age

Median population age should be similar to the age of a typical worker if a market has a good supply of renters. This may also illustrate that people are moving into the area. If you discover a high median age, your supply of tenants is reducing. A vibrant real estate market cannot be sustained by aged, non-working residents.

Employment Base Diversity

A diversified employment base is what an intelligent long-term rental property owner will search for. If the city’s employees, who are your tenants, are spread out across a diversified number of businesses, you can’t lose all of them at the same time (and your property’s value), if a dominant enterprise in the market goes bankrupt.

Unemployment Rate

It is difficult to maintain a secure rental market when there is high unemployment. Unemployed people can’t be clients of yours and of related companies, which creates a domino effect throughout the city. Those who still have jobs can find their hours and wages decreased. This could increase the instances of delayed rent payments and renter defaults.

Income Rates

Median household and per capita income will show you if the renters that you need are residing in the location. Increasing salaries also tell you that rental prices can be adjusted over the life of the asset.

Number of New Jobs Created

The robust economy that you are looking for will create plenty of jobs on a regular basis. More jobs mean a higher number of tenants. This allows you to purchase more lease assets and backfill current empty units.

School Ratings

The quality of school districts has an undeniable influence on real estate market worth across the area. When a company assesses a community for potential expansion, they know that good education is a requirement for their employees. Business relocation provides more tenants. Homeowners who come to the city have a positive impact on housing market worth. Highly-rated schools are a key factor for a strong real estate investment market.

Property Appreciation Rates

Property appreciation rates are an imperative portion of your long-term investment scheme. You want to know that the odds of your investment increasing in value in that community are strong. Low or shrinking property value in an area under assessment is not acceptable.

A furnished residential unit where clients reside for less than 30 days is considered a short-term rental. Short-term rental landlords charge a higher rent a night than in long-term rental properties. These houses may require more continual repairs and tidying.

Short-term rentals serve business travelers who are in town for a couple of days, those who are moving and want short-term housing, and excursionists. Ordinary property owners can rent their homes on a short-term basis using portals like AirBnB and VRBO. This makes short-term rentals a good method to endeavor residential property investing.

The short-term property rental venture involves interaction with occupants more frequently in comparison with annual rental properties. As a result, investors manage issues repeatedly. You may want to protect your legal bases by engaging one of the good Union County real estate lawyers.

Factors to Consider

Short-Term Rental Income

Initially, compute the amount of rental revenue you need to reach your projected profits. An area’s short-term rental income rates will promptly show you if you can look forward to accomplish your projected income figures.

Median Property Prices

You also need to determine the budget you can afford to invest. The median values of real estate will tell you if you can manage to participate in that city. You can calibrate your area survey by studying the median market worth in specific sub-markets.

Price Per Square Foot

Price per square foot may be inaccurate if you are comparing different buildings. A building with open foyers and high ceilings can’t be contrasted with a traditional-style property with bigger floor space. It may be a quick method to compare several sub-markets or homes.

Short-Term Rental Occupancy Rate

The necessity for more rental properties in a community may be determined by going over the short-term rental occupancy level. A location that requires additional rentals will have a high occupancy rate. When the rental occupancy rates are low, there is not much need in the market and you must search in another location.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will tell you if the property is a smart use of your own funds. Take your projected Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The result comes as a percentage. When an investment is lucrative enough to reclaim the investment budget soon, you’ll get a high percentage. Lender-funded investment purchases will reach better cash-on-cash returns as you are utilizing less of your own cash.

Average Short-Term Rental Capitalization (Cap) Rates

This metric compares property value to its yearly return. High cap rates indicate that rental units are accessible in that region for fair prices. If properties in a region have low cap rates, they typically will cost too much. The cap rate is computed by dividing the Net Operating Income (NOI) by the listing price or market value. This gives you a ratio that is the year-over-year return, or cap rate.

Local Attractions

Short-term rental units are popular in locations where sightseers are attracted by events and entertainment spots. If a region has sites that regularly hold interesting events, like sports arenas, universities or colleges, entertainment centers, and adventure parks, it can invite people from out of town on a constant basis. Outdoor attractions such as mountains, lakes, beaches, and state and national parks can also bring in prospective renters.

To fix and flip a residential property, you have to get it for below market value, handle any required repairs and improvements, then sell the asset for better market price. To get profit, the flipper must pay lower than the market worth for the property and calculate how much it will take to repair the home.

It’s critical for you to know how much homes are going for in the market. You always have to analyze how long it takes for listings to close, which is illustrated by the Days on Market (DOM) information. Liquidating the house promptly will help keep your expenses low and maximize your profitability.

Help determined real property owners in finding your business by featuring your services in our directory of Union County companies that buy homes for cash and top Union County property investment companies.

In addition, search for bird dogs for real estate investors in Union County PA. These professionals concentrate on skillfully discovering lucrative investment prospects before they are listed on the market.

Factors to Consider

Median Home Price

The area’s median home price will help you find a desirable community for flipping houses. Modest median home values are a hint that there must be an inventory of houses that can be purchased below market worth. This is a fundamental ingredient of a fix and flip market.

If market data signals a sharp drop in property market values, this can point to the availability of potential short sale real estate. You’ll hear about possible investments when you join up with Union County short sale processors. You will uncover more information regarding short sales in our article ⁠— What Is the Process of Buying a Short Sale House?.

Property Appreciation Rate

Are home prices in the city moving up, or going down? Stable growth in median prices indicates a strong investment environment. Housing purchase prices in the community should be going up regularly, not abruptly. Acquiring at an inconvenient period in an unstable environment can be devastating.

Average Renovation Costs

Look thoroughly at the potential renovation expenses so you will find out whether you can reach your predictions. Other expenses, such as permits, may increase your budget, and time which may also turn into additional disbursement. You have to be aware if you will have to hire other specialists, like architects or engineers, so you can get prepared for those costs.

Population Growth

Population growth metrics allow you to take a peek at housing need in the area. Flat or declining population growth is a sign of a feeble environment with not enough buyers to validate your effort.

Median Population Age

The median residents’ age is a clear sign of the availability of desirable home purchasers. The median age in the market must equal the age of the typical worker. People in the area’s workforce are the most stable home buyers. Older individuals are preparing to downsize, or move into senior-citizen or retiree neighborhoods.

Unemployment Rate

You aim to see a low unemployment rate in your target market. An unemployment rate that is lower than the US median is a good sign. If the city’s unemployment rate is less than the state average, that is an indication of a good economy. Without a dynamic employment environment, a city won’t be able to provide you with abundant homebuyers.

Income Rates

The citizens’ income figures show you if the area’s financial environment is scalable. Most people who purchase a home have to have a mortgage loan. To be approved for a mortgage loan, a borrower should not be spending for a house payment more than a certain percentage of their income. You can determine based on the community’s median income if a good supply of individuals in the region can afford to purchase your homes. You also want to see incomes that are increasing continually. If you want to increase the purchase price of your residential properties, you need to be positive that your customers’ wages are also improving.

Number of New Jobs Created

The number of jobs created on a consistent basis shows if wage and population growth are viable. A larger number of residents buy homes if the local financial market is adding new jobs. Experienced skilled employees looking into buying a property and deciding to settle opt for relocating to regions where they will not be out of work.

Hard Money Loan Rates

Short-term real estate investors regularly use hard money loans rather than conventional financing. This plan allows investors make profitable deals without holdups. Find hard money loan companies in Union County PA and compare their interest rates.

Investors who are not experienced regarding hard money lenders can find out what they should learn with our resource for newbie investors — What Is Private Money?.

Wholesaling is a real estate investment plan that involves finding homes that are desirable to real estate investors and putting them under a sale and purchase agreement. A real estate investor then “buys” the sale and purchase agreement from you. The property under contract is sold to the investor, not the real estate wholesaler. The wholesaler doesn’t sell the residential property itself — they simply sell the rights to buy it.

The wholesaling mode of investing involves the engagement of a title insurance firm that understands wholesale deals and is knowledgeable about and active in double close transactions. Locate Union County title services for real estate investors by reviewing our directory.

To know how wholesaling works, study our detailed guide Complete Guide to Real Estate Wholesaling as an Investment Strategy. When pursuing this investing method, list your firm in our directory of the best property wholesalers in Union County PA. That way your potential clientele will see you and reach out to you.

Factors to Consider

Median Home Prices

Median home values in the region will inform you if your preferred purchase price point is viable in that location. Below average median prices are a valid sign that there are enough properties that might be purchased under market price, which investors have to have.

Rapid deterioration in property market values may result in a supply of homes with no equity that appeal to short sale property buyers. This investment strategy regularly delivers multiple different advantages. Nevertheless, there could be risks as well. Discover details regarding wholesaling a short sale property with our comprehensive guide. Once you’ve decided to attempt wholesaling short sales, make sure to engage someone on the directory of the best short sale law firms in Union County PA and the best foreclosure law offices in Union County PA to assist you.

Property Appreciation Rate

Median home value trends are also important. Real estate investors who plan to liquidate their investment properties later on, such as long-term rental investors, require a market where real estate values are going up. A shrinking median home price will illustrate a poor rental and home-buying market and will turn off all sorts of investors.

Population Growth

Population growth figures are an indicator that real estate investors will look at thoroughly. An expanding population will have to have new housing. There are many individuals who lease and plenty of clients who purchase homes. When a community is not multiplying, it does not require more houses and real estate investors will invest somewhere else.

Median Population Age

A vibrant housing market needs individuals who are initially leasing, then moving into homeownership, and then moving up in the housing market. In order for this to take place, there needs to be a stable employment market of potential tenants and homeowners. That’s why the region’s median age should be the age of skilled workers in the employment market.

Income Rates

The median household and per capita income demonstrate stable increases over time in areas that are desirable for real estate investment. Surges in rent and asking prices have to be backed up by improving salaries in the market. That will be critical to the real estate investors you need to reach.

Unemployment Rate

Investors will pay close attention to the area’s unemployment rate. High unemployment rate triggers a lot of renters to make late rent payments or default completely. This impacts long-term investors who intend to lease their residential property. High unemployment creates uncertainty that will keep people from purchasing a home. This is a concern for short-term investors purchasing wholesalers’ agreements to fix and resell a home.

Number of New Jobs Created

The frequency of more jobs being generated in the city completes an investor’s analysis of a potential investment site. New jobs produced result in more employees who look for homes to lease and buy. Employment generation is helpful for both short-term and long-term real estate investors whom you rely on to acquire your contracted properties.

Average Renovation Costs

Renovation spendings will be important to most real estate investors, as they typically buy inexpensive neglected properties to renovate. Short-term investors, like house flippers, won’t make a profit when the purchase price and the improvement costs equal to more than the After Repair Value (ARV) of the property. Give preference to lower average renovation costs.

Note investing professionals purchase a loan from mortgage lenders when they can purchase the note for a lower price than face value. The client makes future payments to the mortgage note investor who is now their current lender.

When a mortgage loan is being repaid on time, it’s thought of as a performing note. Performing loans are a consistent generator of cash flow. Note investors also buy non-performing loans that they either restructure to help the borrower or foreclose on to obtain the property below market value.

Eventually, you may accrue a group of mortgage note investments and lack the ability to manage the portfolio alone. In this case, you can hire one of loan portfolio servicing companies in Union County PA that will basically turn your portfolio into passive income.

If you decide to follow this investment strategy, you should include your venture in our list of the best mortgage note buying companies in Union County PA. Being on our list sets you in front of lenders who make profitable investment possibilities accessible to note investors such as yourself.

Factors to consider

Foreclosure Rates

Investors looking for valuable mortgage loans to purchase will hope to uncover low foreclosure rates in the area. If the foreclosures happen too often, the market could still be profitable for non-performing note investors. If high foreclosure rates have caused an underperforming real estate environment, it could be tough to liquidate the collateral property if you foreclose on it.

Foreclosure Laws

Successful mortgage note investors are fully well-versed in their state’s regulations concerning foreclosure. Are you dealing with a mortgage or a Deed of Trust? You may need to receive the court’s approval to foreclose on a home. You only have to file a public notice and proceed with foreclosure steps if you are utilizing a Deed of Trust.

Mortgage Interest Rates

Mortgage note investors inherit the interest rate of the mortgage loan notes that they buy. Your mortgage note investment return will be influenced by the interest rate. Interest rates affect the strategy of both kinds of note investors.

Conventional lenders charge dissimilar mortgage interest rates in different regions of the United States. Private loan rates can be a little higher than conventional rates considering the larger risk taken by private mortgage lenders.

Profitable note investors continuously review the rates in their region set by private and traditional mortgage companies.

Demographics

If mortgage note buyers are determining where to buy notes, they will look closely at the demographic statistics from reviewed markets. The market’s population increase, employment rate, employment market growth, pay standards, and even its median age provide pertinent data for mortgage note investors.
Performing note investors want customers who will pay as agreed, developing a consistent income stream of loan payments.

Mortgage note investors who acquire non-performing mortgage notes can also make use of growing markets. A vibrant local economy is needed if investors are to locate homebuyers for properties on which they have foreclosed.

Property Values

As a mortgage note investor, you must try to find borrowers having a cushion of equity. This increases the possibility that a possible foreclosure auction will repay the amount owed. The combined effect of mortgage loan payments that reduce the loan balance and yearly property value appreciation raises home equity.

Property Taxes

Most often, lenders receive the house tax payments from the homeowner each month. That way, the lender makes certain that the taxes are submitted when payable. The mortgage lender will need to compensate if the house payments stop or the lender risks tax liens on the property. If taxes are delinquent, the government’s lien leapfrogs any other liens to the front of the line and is taken care of first.

Because tax escrows are included with the mortgage payment, rising property taxes mean larger mortgage loan payments. Overdue clients might not have the ability to maintain increasing loan payments and might interrupt paying altogether.

Real Estate Market Strength

A location with growing property values offers excellent potential for any mortgage note buyer. It is critical to understand that if you have to foreclose on a property, you won’t have trouble obtaining an acceptable price for it.

Vibrant markets often present opportunities for private investors to generate the initial mortgage loan themselves. For veteran investors, this is a profitable part of their business strategy.

A REIT, or Real Estate Investment Trust, means a business that makes investments in income-generating assets. REITs were invented to empower everyday people to invest in properties. Shares in REITs are economical for most people.

Shareholders in real estate investment trusts are entirely passive investors. The risk that the investors are taking is diversified among a group of investment properties. Investors can sell their REIT shares anytime they want. Something you can’t do with REIT shares is to determine the investment assets. You are restricted to the REIT’s collection of properties for investment.

Mutual funds owning shares of real estate companies are termed real estate investment funds. Any actual real estate property is owned by the real estate firms rather than the fund. These funds make it feasible for a wider variety of people to invest in real estate properties. Whereas REITs must distribute dividends to its shareholders, funds do not. The profit to you is generated by increase in the worth of the stock.

You can pick a fund that focuses on a predetermined category of real estate you are expert in, but you do not get to determine the geographical area of every real estate investment. You must count on the fund’s managers to determine which markets and assets are chosen for investment.