Ultimate Watauga County Real Estate Investing Guide for 2024

BRRRR means “Buy, Rehab, Rent, Refinance, Repeat”. This is a way to increase your investment portfolio not just own one investment property. A vital component of this formula is to be able to do a “cash-out” mortgage refinance.

The After Repair Value (ARV) of the home has to total more than the combined buying and repair expenses. The asset is refinanced using the ARV and the difference, or equity, is given to you in cash. You utilize that money to purchase an additional house and the procedure begins anew. You acquire more and more houses or condos and continually grow your lease income.

If an investor has a substantial portfolio of investment homes, it seems smart to employ a property manager and create a passive income stream. Find one of the best investment property management companies in Watauga County NC with the help of our complete directory.

Factors to Consider

Population Growth

The rise or downturn of an area’s population is a valuable gauge of the region’s long-term desirability for rental property investors. A growing population often demonstrates vibrant relocation which equals new tenants. The market is attractive to employers and working adults to move, find a job, and have households. An expanding population creates a reliable base of renters who can keep up with rent increases, and a robust property seller’s market if you decide to unload any investment properties.

Property Taxes

Property taxes, maintenance, and insurance spendings are examined by long-term rental investors for determining costs to assess if and how the investment will pay off. High spendings in these areas jeopardize your investment’s profitability. Unreasonable real estate tax rates may indicate an unstable location where expenses can continue to increase and must be treated as a warning.

Price to Rent Ratio

Price to rent ratio (p/r) is a market indicator that informs you how much you can predict to charge for rent. An investor will not pay a high price for an investment property if they can only charge a low rent not allowing them to pay the investment off in a realistic time. You will prefer to discover a lower p/r to be assured that you can establish your rents high enough to reach acceptable profits.

Median Gross Rents

Median gross rents signal whether a community’s lease market is strong. You want to identify a community with stable median rent increases. Shrinking rents are a bad signal to long-term rental investors.

Median Population Age

Median population age should be nearly the age of a normal worker if an area has a consistent stream of renters. If people are moving into the region, the median age will have no challenge remaining at the level of the employment base. If you discover a high median age, your source of renters is reducing. That is a weak long-term economic scenario.

Employment Base Diversity

A diversified employment base is what a smart long-term rental property owner will hunt for. When the citizens are employed by a couple of dominant businesses, even a little interruption in their operations might cause you to lose a lot of renters and increase your risk considerably.

Unemployment Rate

High unemployment leads to fewer renters and an unreliable housing market. The unemployed won’t be able to purchase goods or services. The remaining workers might see their own paychecks marked down. Even people who have jobs will find it tough to keep up with their rent.

Income Rates

Median household and per capita income level is a helpful indicator to help you discover the areas where the renters you are looking for are living. Rising wages also show you that rental payments can be adjusted over the life of the asset.

Number of New Jobs Created

The active economy that you are searching for will generate a high number of jobs on a consistent basis. The employees who are hired for the new jobs will need a residence. This reassures you that you will be able to sustain a high occupancy level and purchase more assets.

School Ratings

Local schools will have a significant influence on the housing market in their neighborhood. Highly-respected schools are a prerequisite for employers that are thinking about relocating. Dependable tenants are a by-product of a strong job market. Real estate values gain thanks to new employees who are buying houses. For long-term investing, hunt for highly respected schools in a potential investment market.

Property Appreciation Rates

High property appreciation rates are a must for a profitable long-term investment. Investing in assets that you expect to hold without being sure that they will grow in price is a formula for disaster. You don’t want to take any time inspecting areas that have depressed property appreciation rates.

A short-term rental is a furnished residence where a renter lives for less than four weeks. Long-term rental units, like apartments, charge lower rental rates per night than short-term rentals. Because of the high rotation of renters, short-term rentals involve more regular repairs and tidying.

Home sellers standing by to close on a new house, backpackers, and individuals traveling on business who are stopping over in the area for a few days prefer renting a residence short term. House sharing portals like AirBnB and VRBO have opened doors to many residential property owners to engage in the short-term rental business. An easy way to enter real estate investing is to rent a residential property you already own for short terms.

Short-term rental landlords require working personally with the occupants to a larger extent than the owners of yearly leased properties. As a result, owners manage problems regularly. Consider controlling your liability with the help of any of the best real estate attorneys in Watauga County NC.

Factors to Consider

Short-Term Rental Income

Initially, find out the amount of rental revenue you need to meet your desired profits. An area’s short-term rental income levels will promptly show you when you can expect to accomplish your estimated income figures.

Median Property Prices

Thoroughly evaluate the amount that you can afford to pay for new investment assets. To see whether a city has possibilities for investment, check the median property prices. You can fine-tune your real estate hunt by evaluating median prices in the community’s sub-markets.

Price Per Square Foot

Price per sq ft gives a general idea of values when analyzing comparable real estate. A building with open entryways and high ceilings can’t be contrasted with a traditional-style residential unit with bigger floor space. You can use this data to get a good overall view of home values.

Short-Term Rental Occupancy Rate

The need for more rental properties in a market may be checked by evaluating the short-term rental occupancy level. A market that needs new rental housing will have a high occupancy rate. When the rental occupancy indicators are low, there is not enough need in the market and you need to explore in a different place.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a means to evaluate the value of an investment plan. Divide the Net Operating Income (NOI) by the total amount of cash invested. The return is a percentage. The higher it is, the quicker your invested cash will be repaid and you will start receiving profits. Sponsored investment ventures can show better cash-on-cash returns as you are using less of your own capital.

Average Short-Term Rental Capitalization (Cap) Rates

Another measurement conveys the market value of an investment property as a cash flow asset — average short-term rental capitalization (cap) rate. Typically, the less a property will cost (or is worth), the higher the cap rate will be. Low cap rates show higher-priced rental units. You can determine the cap rate for potential investment real estate by dividing the Net Operating Income (NOI) by the market worth or asking price of the residential property. The result is the per-annum return in a percentage.

Local Attractions

Important festivals and entertainment attractions will attract tourists who want short-term rental homes. Individuals come to specific places to watch academic and athletic activities at colleges and universities, see competitions, support their kids as they participate in kiddie sports, have the time of their lives at annual fairs, and go to adventure parks. At certain occasions, locations with outside activities in mountainous areas, at beach locations, or near rivers and lakes will attract lots of visitors who need short-term rental units.

When a real estate investor acquires a house for less than the market worth, rehabs it so that it becomes more valuable, and then resells the property for revenue, they are referred to as a fix and flip investor. The secrets to a profitable investment are to pay less for the property than its current market value and to precisely compute what it will cost to make it marketable.

It’s important for you to be aware of the rates houses are being sold for in the community. The average number of Days On Market (DOM) for properties listed in the region is critical. Liquidating the house immediately will help keep your costs low and ensure your revenue.

Help determined real estate owners in locating your business by listing your services in our directory of Watauga County companies that buy homes for cash and top Watauga County real estate investors.

Also, look for top real estate bird dogs in Watauga County NC. Specialists listed here will assist you by immediately discovering potentially profitable ventures prior to them being marketed.

Factors to Consider

Median Home Price

Median home price data is a critical gauge for estimating a prospective investment area. You’re searching for median prices that are low enough to hint on investment possibilities in the city. You have to have lower-priced homes for a lucrative fix and flip.

When you see a sharp drop in home market values, this could indicate that there are possibly homes in the area that qualify for a short sale. You will hear about potential investments when you join up with Watauga County short sale specialists. Uncover more regarding this kind of investment explained in our guide What Is the Process for Buying a Short Sale Home?.

Property Appreciation Rate

The movements in real estate values in a city are critical. You have to have a city where home market values are regularly and continuously going up. Volatile value changes aren’t desirable, even if it’s a significant and quick growth. Acquiring at an inappropriate time in an unsteady market condition can be catastrophic.

Average Renovation Costs

You will have to estimate construction expenses in any prospective investment area. The way that the municipality processes your application will have an effect on your project as well. You have to know whether you will have to use other specialists, such as architects or engineers, so you can get ready for those costs.

Population Growth

Population statistics will tell you if there is a growing need for housing that you can supply. When there are purchasers for your rehabbed homes, it will show a robust population increase.

Median Population Age

The median population age is a straightforward sign of the accessibility of desirable homebuyers. The median age better not be less or more than that of the typical worker. People in the area’s workforce are the most stable house buyers. Individuals who are planning to depart the workforce or are retired have very specific residency requirements.

Unemployment Rate

You aim to have a low unemployment level in your target market. It should certainly be lower than the country’s average. When the community’s unemployment rate is less than the state average, that is an indication of a strong financial market. If you don’t have a dynamic employment base, a region can’t supply you with qualified homebuyers.

Income Rates

Median household and per capita income amounts explain to you if you will get qualified buyers in that community for your homes. The majority of individuals who acquire a home have to have a mortgage loan. Homebuyers’ capacity to be given financing rests on the size of their salaries. The median income data will show you if the region is appropriate for your investment endeavours. You also need to have salaries that are growing over time. Construction expenses and housing purchase prices rise from time to time, and you want to be certain that your potential homebuyers’ income will also improve.

Number of New Jobs Created

Knowing how many jobs are generated every year in the area can add to your assurance in a community’s economy. An expanding job market indicates that more people are comfortable with buying a house there. Experienced trained employees taking into consideration purchasing a home and deciding to settle prefer migrating to locations where they won’t be jobless.

Hard Money Loan Rates

Fix-and-flip investors often utilize hard money loans instead of typical financing. Hard money funds enable these investors to pull the trigger on pressing investment possibilities right away. Discover the best hard money lenders in Watauga County NC so you can review their fees.

Those who aren’t well-versed in regard to hard money loans can find out what they should know with our article for those who are only starting — How Does a Hard Money Loan Work?.

As a real estate wholesaler, you sign a purchase contract to buy a home that some other real estate investors will want. However you do not purchase the home: after you have the property under contract, you get an investor to take your place for a fee. The owner sells the house to the investor not the real estate wholesaler. The real estate wholesaler does not sell the property — they sell the rights to buy it.

This strategy includes employing a title company that is knowledgeable about the wholesale contract assignment procedure and is capable and inclined to handle double close transactions. Discover Watauga County title companies for wholesalers by utilizing our directory.

Our definitive guide to wholesaling can be read here: A-to-Z Guide to Property Wholesaling. When you go with wholesaling, include your investment project on our list of the best wholesale real estate companies in Watauga County NC. This will let your potential investor buyers discover and reach you.

Factors to Consider

Median Home Prices

Median home values are essential to finding places where residential properties are selling in your investors’ price level. As investors want investment properties that are on sale below market price, you will have to find lower median prices as an indirect tip on the possible source of residential real estate that you could buy for lower than market worth.

A quick decrease in housing values might lead to a large selection of ’upside-down’ homes that short sale investors search for. Short sale wholesalers frequently reap advantages using this strategy. However, be aware of the legal risks. Obtain more data on how to wholesale short sale real estate in our extensive instructions. When you are keen to begin wholesaling, look through Watauga County top short sale attorneys as well as Watauga County top-rated property foreclosure attorneys lists to locate the appropriate advisor.

Property Appreciation Rate

Property appreciation rate enhances the median price statistics. Investors who want to maintain investment properties will want to know that home purchase prices are steadily appreciating. Both long- and short-term investors will ignore a community where home market values are dropping.

Population Growth

Population growth data is a contributing factor that your future investors will be familiar with. When the community is expanding, additional housing is needed. This includes both rental and ‘for sale’ real estate. A location that has a declining community does not attract the investors you require to purchase your purchase contracts.

Median Population Age

Real estate investors need to be a part of a strong property market where there is a good source of renters, newbie homebuyers, and upwardly mobile residents purchasing bigger houses. This needs a strong, reliable employee pool of residents who are confident to step up in the real estate market. A location with these characteristics will have a median population age that is equivalent to the employed person’s age.

Income Rates

The median household and per capita income should be improving in a friendly residential market that investors prefer to participate in. Surges in rent and purchase prices will be backed up by improving income in the area. That will be critical to the investors you are trying to draw.

Unemployment Rate

Real estate investors will take into consideration the location’s unemployment rate. High unemployment rate forces a lot of renters to delay rental payments or miss payments altogether. This negatively affects long-term investors who want to rent their property. Investors cannot depend on tenants moving up into their homes when unemployment rates are high. This makes it challenging to reach fix and flip investors to buy your purchase agreements.

Number of New Jobs Created

The number of jobs appearing per annum is an essential element of the housing picture. More jobs appearing draw a high number of employees who look for places to lease and purchase. No matter if your buyer supply consists of long-term or short-term investors, they will be attracted to a place with constant job opening production.

Average Renovation Costs

Rehab expenses have a important impact on a real estate investor’s profit. When a short-term investor repairs a house, they need to be able to unload it for more money than the total sum they spent for the purchase and the repairs. Below average improvement costs make a region more attractive for your priority clients — rehabbers and other real estate investors.

Mortgage note investment professionals obtain debt from mortgage lenders when they can purchase it below the outstanding debt amount. The client makes subsequent loan payments to the investor who is now their current lender.

Loans that are being paid off on time are referred to as performing loans. These loans are a consistent source of passive income. Non-performing loans can be rewritten or you can acquire the property for less than face value through a foreclosure process.

At some time, you could grow a mortgage note portfolio and notice you are needing time to oversee it by yourself. If this happens, you might pick from the best loan portfolio servicing companies in Watauga County NC which will make you a passive investor.

If you decide to employ this strategy, add your business to our list of real estate note buyers in Watauga County NC. Once you’ve done this, you’ll be seen by the lenders who market profitable investment notes for procurement by investors like yourself.

Factors to consider

Foreclosure Rates

Low foreclosure rates are a signal that the market has opportunities for performing note investors. If the foreclosure rates are high, the neighborhood might nevertheless be good for non-performing note investors. But foreclosure rates that are high may signal a slow real estate market where selling a foreclosed unit may be a problem.

Foreclosure Laws

Investors are required to know the state’s regulations concerning foreclosure prior to pursuing this strategy. They will know if the law uses mortgages or Deeds of Trust. When using a mortgage, a court has to agree to a foreclosure. You don’t have to have the court’s permission with a Deed of Trust.

Mortgage Interest Rates

The interest rate is determined in the mortgage loan notes that are purchased by note buyers. Your mortgage note investment return will be affected by the interest rate. Mortgage interest rates are critical to both performing and non-performing note buyers.

Traditional interest rates may differ by as much as a 0.25% across the United States. Private loan rates can be a little more than traditional interest rates because of the higher risk dealt with by private mortgage lenders.

A mortgage note investor needs to know the private and traditional mortgage loan rates in their communities all the time.

Demographics

A market’s demographics statistics help mortgage note buyers to focus their efforts and effectively use their assets. Note investors can discover a lot by looking at the size of the populace, how many people are employed, what they make, and how old the residents are.
Performing note buyers need borrowers who will pay as agreed, creating a repeating revenue source of loan payments.

Non-performing mortgage note buyers are interested in similar components for different reasons. A vibrant regional economy is required if investors are to find homebuyers for properties they’ve foreclosed on.

Property Values

As a note investor, you should try to find deals that have a comfortable amount of equity. This increases the possibility that a possible foreclosure auction will repay the amount owed. Appreciating property values help raise the equity in the home as the homeowner pays down the balance.

Property Taxes

Usually borrowers pay real estate taxes via lenders in monthly installments while sending their mortgage loan payments. When the taxes are due, there needs to be enough payments being held to handle them. The lender will have to make up the difference if the payments cease or the investor risks tax liens on the property. If taxes are delinquent, the government’s lien leapfrogs all other liens to the head of the line and is taken care of first.

Because tax escrows are included with the mortgage loan payment, growing taxes mean larger house payments. Homeowners who are having difficulty affording their mortgage payments could fall farther behind and sooner or later default.

Real Estate Market Strength

A growing real estate market showing good value appreciation is beneficial for all types of mortgage note buyers. They can be confident that, when required, a defaulted property can be sold at a price that is profitable.

Growing markets often generate opportunities for note buyers to originate the initial loan themselves. This is a strong source of income for successful investors.

A REIT, or Real Estate Investment Trust, means a business that invests in income-producing properties. REITs are created to permit average people to buy into properties. The typical investor has the funds to invest in a REIT.

Participants in these trusts are completely passive investors. Investment exposure is diversified across a package of investment properties. Shareholders have the right to liquidate their shares at any time. One thing you cannot do with REIT shares is to determine the investment assets. You are confined to the REIT’s portfolio of properties for investment.

Mutual funds containing shares of real estate businesses are termed real estate investment funds. The investment real estate properties aren’t owned by the fund — they’re possessed by the firms in which the fund invests. Investment funds can be a cost-effective way to incorporate real estate properties in your allocation of assets without unnecessary liability. Real estate investment funds aren’t obligated to pay dividends unlike a REIT. The value of a fund to someone is the anticipated increase of the worth of its shares.

You may choose a fund that concentrates on particular segments of the real estate business but not particular markets for individual real estate property investment. Your choice as an investor is to choose a fund that you rely on to supervise your real estate investments.