Ultimate Washington County Real Estate Investing Guide for 2024

The term BRRRR is a description of a long-term lease plan — Buy, Rehab, Rent, Refinance, Repeat. This is a strategy to expand your investment assets not just acquire one rental home. It is required that you be able to obtain a “cash-out” refinance loan for the method to work.

When you have finished repairing the investment property, its value has to be more than your combined acquisition and fix-up costs. The property is refinanced using the ARV and the balance, or equity, comes to you in cash. This money is put into one more investment asset, and so on. You acquire more and more rental homes and repeatedly expand your rental income.

If an investor has a significant number of real properties, it seems smart to hire a property manager and create a passive income stream. Find Washington County investment property management companies when you go through our list of professionals.

Factors to Consider

Population Growth

The growth or deterioration of a community’s population is an accurate barometer of the area’s long-term desirability for rental property investors. If the population growth in a region is robust, then additional renters are obviously moving into the community. Businesses see such an area as an attractive community to situate their business, and for workers to move their families. This equals stable tenants, greater rental revenue, and a greater number of likely homebuyers when you need to liquidate your asset.

Property Taxes

Property taxes, regular maintenance costs, and insurance specifically decrease your profitability. Unreasonable spendings in these areas threaten your investment’s returns. If property taxes are too high in a specific city, you probably prefer to look in another place.

Price to Rent Ratio

The price to rent ratio (p/r) is a signal of what amount of rent can be demanded in comparison to the purchase price of the investment property. An investor will not pay a large price for a house if they can only collect a low rent not letting them to repay the investment within a appropriate time. You need to find a low p/r to be assured that you can establish your rental rates high enough to reach good returns.

Median Gross Rents

Median gross rents are an accurate yardstick of the desirability of a lease market under discussion. You are trying to discover a location with repeating median rent increases. Shrinking rents are an alert to long-term rental investors.

Median Population Age

Median population age in a strong long-term investment market should reflect the normal worker’s age. If people are migrating into the district, the median age will have no challenge remaining at the level of the workforce. If you see a high median age, your stream of tenants is shrinking. This isn’t advantageous for the forthcoming economy of that area.

Employment Base Diversity

Having a variety of employers in the community makes the economy less unpredictable. When there are only one or two significant hiring companies, and one of such relocates or closes down, it will lead you to lose paying customers and your asset market values to decrease.

Unemployment Rate

High unemployment equals smaller amount of tenants and an unsafe housing market. Normally profitable companies lose customers when other employers retrench people. Workers who continue to have jobs can discover their hours and wages reduced. Remaining tenants may become late with their rent in this scenario.

Income Rates

Median household and per capita income data is a helpful instrument to help you discover the markets where the tenants you need are located. Rising incomes also tell you that rental prices can be increased over your ownership of the rental home.

Number of New Jobs Created

An increasing job market produces a constant supply of tenants. The employees who take the new jobs will have to have a residence. This reassures you that you will be able to retain a high occupancy rate and acquire additional rentals.

School Ratings

School ratings in the community will have a significant effect on the local residential market. When an employer considers a city for potential relocation, they keep in mind that quality education is a must-have for their workforce. Business relocation provides more tenants. Homeowners who relocate to the city have a beneficial effect on home values. Quality schools are an essential ingredient for a reliable property investment market.

Property Appreciation Rates

Real estate appreciation rates are an imperative element of your long-term investment approach. You have to have confidence that your property assets will appreciate in price until you want to dispose of them. Low or decreasing property appreciation rates should eliminate a market from the selection.

Residential units where renters reside in furnished units for less than a month are known as short-term rentals. Short-term rental businesses charge more rent a night than in long-term rental business. With renters moving from one place to the next, short-term rental units need to be repaired and sanitized on a continual basis.

Short-term rentals appeal to business travelers who are in the region for several days, people who are moving and want temporary housing, and tourists. Any property owner can transform their home into a short-term rental with the know-how made available by virtual home-sharing websites like VRBO and AirBnB. Short-term rentals are thought of as a smart way to get started on investing in real estate.

Short-term rentals demand engaging with renters more repeatedly than long-term ones. As a result, owners manage difficulties regularly. Ponder covering yourself and your assets by adding any of real estate law offices in Washington County UT to your network of professionals.

Factors to Consider

Short-Term Rental Income

First, calculate the amount of rental income you should earn to meet your expected profits. Understanding the standard amount of rent being charged in the community for short-term rentals will help you select a good market to invest.

Median Property Prices

Thoroughly assess the amount that you can spare for new real estate. Look for locations where the purchase price you prefer is appropriate for the current median property values. You can narrow your market search by looking at the median price in specific neighborhoods.

Price Per Square Foot

Price per square foot gives a general idea of market values when analyzing comparable properties. A building with open foyers and high ceilings can’t be compared with a traditional-style property with more floor space. You can use the price per sq ft criterion to see a good broad view of home values.

Short-Term Rental Occupancy Rate

A quick check on the location’s short-term rental occupancy levels will show you if there is demand in the market for more short-term rentals. A high occupancy rate indicates that an extra source of short-term rental space is required. If the rental occupancy indicators are low, there is not much space in the market and you should search in another location.

Short-Term Rental Cash-on-Cash Return

To determine whether it’s a good idea to put your cash in a specific rental unit or community, calculate the cash-on-cash return. You can compute the cash-on-cash return by determining your Net Operating Income (NOI) and dividing it by your cash being invested. The result is a percentage. The higher it is, the sooner your invested cash will be recouped and you will start gaining profits. If you take a loan for a fraction of the investment amount and put in less of your cash, you will receive a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

Another measurement indicates the value of a property as a return-yielding asset — average short-term rental capitalization (cap) rate. Generally, the less money an investment property will cost (or is worth), the higher the cap rate will be. If properties in a market have low cap rates, they generally will cost more money. Divide your estimated Net Operating Income (NOI) by the investment property’s market worth or purchase price. The result is the yearly return in a percentage.

Local Attractions

Important festivals and entertainment attractions will attract vacationers who want short-term rental houses. People come to specific regions to enjoy academic and sporting events at colleges and universities, see professional sports, cheer for their children as they participate in fun events, have fun at yearly fairs, and stop by theme parks. Outdoor scenic attractions such as mountains, lakes, beaches, and state and national parks will also invite potential renters.

The fix and flip investment plan means acquiring a house that requires fixing up or restoration, generating added value by enhancing the building, and then selling it for a higher market worth. Your evaluation of rehab expenses has to be correct, and you need to be capable of buying the home for less than market price.

Assess the prices so that you understand the accurate After Repair Value (ARV). Choose a city with a low average Days On Market (DOM) indicator. To successfully “flip” a property, you must liquidate the rehabbed home before you are required to come up with funds maintaining it.

Help determined property owners in discovering your business by listing your services in our catalogue of Washington County companies that buy houses for cash and Washington County property investors.

Additionally, coordinate with Washington County property bird dogs. These experts specialize in quickly discovering good investment opportunities before they hit the open market.

Factors to Consider

Median Home Price

Median property value data is a valuable tool for evaluating a potential investment region. If values are high, there may not be a reliable reserve of run down houses in the area. This is a key ingredient of a profit-making fix and flip.

If your investigation shows a sharp drop in housing market worth, it may be a sign that you’ll uncover real property that meets the short sale criteria. You will receive notifications about these possibilities by working with short sale negotiation companies in Washington County UT. Find out how this is done by studying our article ⁠— How to Successfully Buy a Short Sale House.

Property Appreciation Rate

The shifts in real estate prices in a region are crucial. You’re looking for a stable growth of the area’s property values. Unreliable market value changes aren’t desirable, even if it is a substantial and sudden growth. Acquiring at a bad period in an unsteady environment can be catastrophic.

Average Renovation Costs

A thorough review of the city’s renovation costs will make a significant influence on your market choice. Other spendings, such as certifications, may shoot up your budget, and time which may also develop into additional disbursement. To make a detailed financial strategy, you’ll have to know whether your construction plans will have to involve an architect or engineer.

Population Growth

Population increase figures let you take a peek at housing demand in the market. When there are buyers for your repaired real estate, the data will demonstrate a strong population increase.

Median Population Age

The median citizens’ age can also show you if there are adequate homebuyers in the region. When the median age is equal to that of the typical worker, it is a good sign. Individuals in the area’s workforce are the most dependable home purchasers. People who are preparing to leave the workforce or are retired have very specific residency needs.

Unemployment Rate

You need to have a low unemployment rate in your considered city. It must definitely be less than the country’s average. When the city’s unemployment rate is lower than the state average, that is a sign of a preferable financial market. If you don’t have a robust employment environment, a location can’t provide you with enough homebuyers.

Income Rates

Median household and per capita income amounts advise you whether you will find enough buyers in that location for your houses. Most homebuyers normally take a mortgage to buy real estate. To obtain approval for a mortgage loan, a home buyer should not be using for a house payment more than a specific percentage of their salary. You can determine based on the market’s median income whether a good supply of people in the area can afford to purchase your homes. You also want to have salaries that are going up consistently. To keep pace with inflation and soaring building and material costs, you need to be able to regularly mark up your purchase rates.

Number of New Jobs Created

The number of jobs appearing annually is useful data as you think about investing in a specific region. Homes are more conveniently liquidated in a city with a vibrant job market. With additional jobs generated, new prospective home purchasers also relocate to the community from other towns.

Hard Money Loan Rates

Investors who purchase, renovate, and flip investment real estate opt to employ hard money and not normal real estate funding. This plan lets them complete profitable ventures without hindrance. Look up the best Washington County private money lenders and compare lenders’ fees.

In case you are unfamiliar with this funding vehicle, learn more by studying our article — What Is a Hard Money Loan in Real Estate?.

As a real estate wholesaler, you enter a sale and purchase agreement to buy a property that some other investors will want. But you don’t buy the house: once you control the property, you allow a real estate investor to take your place for a fee. The real estate investor then completes the acquisition. The wholesaler doesn’t sell the residential property — they sell the rights to purchase one.

Wholesaling depends on the involvement of a title insurance firm that’s okay with assignment of purchase contracts and knows how to proceed with a double closing. Locate Washington County title companies for wholesalers by utilizing our directory.

To learn how wholesaling works, read our comprehensive guide How Does Real Estate Wholesaling Work?. As you opt for wholesaling, add your investment business on our list of the best wholesale real estate investors in Washington County UT. This way your possible clientele will know about your location and contact you.

Factors to Consider

Median Home Prices

Median home values in the region will inform you if your required purchase price level is viable in that market. A market that has a large source of the reduced-value residential properties that your clients require will display a below-than-average median home price.

A quick decrease in property prices could be followed by a high number of ‘underwater’ properties that short sale investors hunt for. This investment plan regularly brings several uncommon benefits. Nonetheless, it also presents a legal liability. Learn more about wholesaling a short sale property from our complete instructions. Once you’ve determined to attempt wholesaling these properties, make sure to engage someone on the directory of the best short sale lawyers in Washington County UT and the best real estate foreclosure attorneys in Washington County UT to advise you.

Property Appreciation Rate

Median home price movements clearly illustrate the housing value in the market. Investors who intend to keep investment properties will need to know that home market values are constantly going up. A dropping median home price will illustrate a vulnerable rental and housing market and will disappoint all sorts of real estate investors.

Population Growth

Population growth data is something that your future investors will be knowledgeable in. A growing population will need more housing. This combines both rental and resale real estate. When a region is shrinking in population, it does not require new housing and real estate investors will not look there.

Median Population Age

A vibrant housing market prefers individuals who start off renting, then shifting into homebuyers, and then moving up in the residential market. A community with a huge employment market has a consistent supply of tenants and buyers. That is why the market’s median age needs to be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income show steady improvement historically in communities that are favorable for real estate investment. If renters’ and home purchasers’ wages are improving, they can absorb rising rental rates and real estate purchase prices. That will be critical to the real estate investors you are trying to reach.

Unemployment Rate

The location’s unemployment stats are a critical point to consider for any potential wholesale property buyer. Delayed rent payments and lease default rates are widespread in markets with high unemployment. This impacts long-term investors who intend to rent their investment property. Renters can’t level up to ownership and current owners can’t liquidate their property and go up to a bigger home. This is a concern for short-term investors purchasing wholesalers’ contracts to repair and resell a property.

Number of New Jobs Created

The frequency of more jobs being generated in the local economy completes an investor’s study of a future investment spot. More jobs created result in an abundance of employees who require homes to rent and purchase. This is helpful for both short-term and long-term real estate investors whom you count on to buy your wholesale real estate.

Average Renovation Costs

Updating costs have a major impact on a real estate investor’s returns. Short-term investors, like house flippers, can’t reach profitability when the price and the rehab expenses total to a larger sum than the After Repair Value (ARV) of the house. Below average improvement costs make a place more desirable for your priority clients — flippers and other real estate investors.

Buying mortgage notes (loans) pays off when the mortgage note can be bought for a lower amount than the face value. The debtor makes remaining loan payments to the mortgage note investor who is now their new lender.

When a loan is being paid as agreed, it’s considered a performing note. Performing loans are a stable source of cash flow. Investors also buy non-performing loans that the investors either modify to help the borrower or foreclose on to purchase the collateral less than market worth.

Someday, you could produce a selection of mortgage note investments and lack the ability to oversee the portfolio alone. When this happens, you might select from the best mortgage loan servicers in Washington County UT which will make you a passive investor.

Should you want to adopt this investment model, you ought to put your project in our directory of the best real estate note buying companies in Washington County UT. Once you’ve done this, you will be discovered by the lenders who market profitable investment notes for procurement by investors like yourself.

Factors to consider

Foreclosure Rates

Performing loan buyers seek communities having low foreclosure rates. If the foreclosures happen too often, the location may nonetheless be desirable for non-performing note buyers. However, foreclosure rates that are high may signal a weak real estate market where liquidating a foreclosed unit would be a problem.

Foreclosure Laws

Professional mortgage note investors are thoroughly well-versed in their state’s laws for foreclosure. Are you working with a Deed of Trust or a mortgage? A mortgage requires that the lender goes to court for permission to start foreclosure. A Deed of Trust enables the lender to file a notice and continue to foreclosure.

Mortgage Interest Rates

The mortgage interest rate is determined in the mortgage loan notes that are bought by mortgage note investors. This is a big factor in the profits that you earn. No matter which kind of note investor you are, the mortgage loan note’s interest rate will be crucial to your forecasts.

Traditional lenders price different interest rates in various regions of the country. Loans supplied by private lenders are priced differently and can be more expensive than conventional loans.

A mortgage note investor needs to know the private as well as traditional mortgage loan rates in their areas at any given time.

Demographics

A city’s demographics trends help mortgage note buyers to streamline their work and properly use their assets. It is crucial to determine whether a suitable number of residents in the area will continue to have reliable employment and incomes in the future.
Investors who like performing notes search for markets where a large number of younger people have good-paying jobs.

Mortgage note investors who buy non-performing mortgage notes can also take advantage of strong markets. A vibrant regional economy is needed if they are to locate buyers for collateral properties they’ve foreclosed on.

Property Values

The greater the equity that a homebuyer has in their home, the more advantageous it is for the mortgage lender. This enhances the likelihood that a possible foreclosure sale will make the lender whole. Appreciating property values help improve the equity in the collateral as the homeowner lessens the amount owed.

Property Taxes

Payments for real estate taxes are normally paid to the lender along with the loan payment. When the taxes are payable, there should be adequate payments being held to pay them. If mortgage loan payments are not being made, the lender will have to either pay the taxes themselves, or the taxes become delinquent. If a tax lien is filed, the lien takes first position over the mortgage lender’s loan.

Since property tax escrows are collected with the mortgage loan payment, rising taxes mean higher mortgage payments. Delinquent homeowners might not have the ability to keep paying rising loan payments and might cease paying altogether.

Real Estate Market Strength

Both performing and non-performing note buyers can work in a good real estate market. They can be assured that, when need be, a foreclosed collateral can be liquidated at a price that is profitable.

A vibrant real estate market could also be a profitable environment for creating mortgage notes. For successful investors, this is a beneficial segment of their business strategy.

A REIT, or Real Estate Investment Trust, means a company that makes investments in income-producing assets. REITs were developed to allow everyday people to buy into properties. Shares in REITs are affordable for the majority of people.

REIT investing is termed passive investing. The liability that the investors are accepting is spread among a collection of investment real properties. Shares in a REIT can be sold whenever it’s convenient for the investor. However, REIT investors do not have the capability to pick particular investment properties or markets. You are restricted to the REIT’s collection of assets for investment.

Real estate investment funds are in essence mutual funds that specialize in real estate firms, such as REITs. Any actual property is owned by the real estate businesses rather than the fund. This is another method for passive investors to diversify their investments with real estate without the high initial expense or liability. Whereas REITs must disburse dividends to its shareholders, funds don’t. Like any stock, investment funds’ values increase and decrease with their share market value.

You may select a fund that focuses on particular categories of the real estate business but not specific areas for each property investment. You have to rely on the fund’s managers to determine which locations and real estate properties are selected for investment.