Ultimate Will County Real Estate Investing Guide for 2024

The term BRRRR is a description of a long-term lease strategy — Buy, Rehab, Rent, Refinance, Repeat. BRRRR is a strategy for consistent growth. It is critical that you are qualified to obtain a “cash-out” mortgage refinance for the system to work.

When you are done with renovating the rental, the market value has to be more than your total acquisition and renovation expenses. The home is refinanced based on the ARV and the difference, or equity, comes to you in cash. You use that money to buy another asset and the process begins anew. You acquire additional properties and repeatedly increase your lease revenues.

When your investment real estate collection is big enough, you can delegate its management and generate passive income. Locate Will County property management firms when you look through our directory of experts.

Factors to Consider

Population Growth

The increase or decline of a market’s population is an accurate gauge of the area’s long-term attractiveness for rental investors. If you discover good population expansion, you can be certain that the area is pulling potential tenants to it. The location is appealing to companies and workers to situate, work, and have families. Growing populations create a strong renter pool that can afford rent bumps and homebuyers who assist in keeping your asset values high.

Property Taxes

Real estate taxes, similarly to insurance and upkeep expenses, may differ from place to market and must be considered cautiously when assessing possible profits. High property taxes will decrease a property investor’s profits. Communities with steep property taxes are not a stable environment for short- and long-term investment and must be avoided.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property prices and median rental rates that will signal how much rent the market can allow. An investor will not pay a high amount for a property if they can only demand a small rent not letting them to repay the investment within a reasonable time. A high price-to-rent ratio informs you that you can set less rent in that community, a smaller one signals you that you can charge more.

Median Gross Rents

Median gross rents are a significant sign of the vitality of a rental market. Search for a repeating rise in median rents over time. You will not be able to achieve your investment predictions in a location where median gross rental rates are going down.

Median Population Age

Median population age in a strong long-term investment market should reflect the typical worker’s age. If people are moving into the area, the median age will have no challenge remaining at the level of the employment base. If you see a high median age, your supply of renters is shrinking. This isn’t promising for the future financial market of that area.

Employment Base Diversity

A varied employment base is what a smart long-term rental property investor will hunt for. If the region’s workers, who are your tenants, are spread out across a diversified number of employers, you can’t lose all of your renters at once (as well as your property’s value), if a major company in the location goes bankrupt.

Unemployment Rate

You won’t be able to reap the benefits of a steady rental income stream in a location with high unemployment. Historically successful businesses lose clients when other businesses retrench workers. This can result in a large number of retrenchments or reduced work hours in the location. This may result in delayed rents and defaults.

Income Rates

Median household and per capita income will let you know if the renters that you require are living in the city. Your investment research will include rent and asset appreciation, which will be dependent on salary augmentation in the region.

Number of New Jobs Created

The vibrant economy that you are looking for will create a large amount of jobs on a constant basis. A market that generates jobs also boosts the number of stakeholders in the housing market. This allows you to acquire more lease properties and fill current unoccupied units.

School Ratings

School quality in the district will have a huge effect on the local real estate market. When a business assesses a community for possible expansion, they remember that good education is a must-have for their workforce. Moving employers bring and attract potential renters. Recent arrivals who purchase a residence keep housing values strong. You will not discover a vibrantly expanding housing market without quality schools.

Property Appreciation Rates

Robust property appreciation rates are a requirement for a viable long-term investment. You have to have confidence that your investment assets will increase in value until you need to liquidate them. You do not want to spend any time inspecting cities with weak property appreciation rates.

A short-term rental is a furnished apartment or house where a renter lives for shorter than a month. Short-term rental businesses charge a higher rent per night than in long-term rental properties. Because of the increased turnover rate, short-term rentals entail more frequent repairs and cleaning.

Short-term rentals are used by individuals traveling on business who are in the area for several days, people who are migrating and need short-term housing, and people on vacation. Ordinary real estate owners can rent their houses or condominiums on a short-term basis through websites such as AirBnB and VRBO. Short-term rentals are considered an effective approach to embark upon investing in real estate.

The short-term rental housing strategy involves interaction with renters more frequently compared to yearly rental units. This means that landlords deal with disputes more frequently. Ponder covering yourself and your assets by joining one of property law attorneys in Will County IL to your network of professionals.

Factors to Consider

Short-Term Rental Income

First, figure out how much rental income you should have to achieve your desired return. A glance at a market’s present typical short-term rental rates will show you if that is the right community for your investment.

Median Property Prices

You also need to determine the budget you can allow to invest. The median market worth of real estate will show you if you can afford to be in that market. You can tailor your property search by evaluating median market worth in the community’s sub-markets.

Price Per Square Foot

Price per square foot gives a basic idea of property values when analyzing comparable properties. When the styles of available homes are very contrasting, the price per sq ft might not show an accurate comparison. You can use the price per square foot data to see a good broad picture of housing values.

Short-Term Rental Occupancy Rate

The necessity for additional rental units in a city may be seen by examining the short-term rental occupancy rate. An area that needs more rental housing will have a high occupancy level. If landlords in the city are having issues renting their current properties, you will have trouble finding renters for yours.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a means to assess the profitability of an investment venture. Divide the Net Operating Income (NOI) by the total amount of cash used. The answer you get is a percentage. High cash-on-cash return demonstrates that you will get back your cash faster and the investment will have a higher return. Funded projects will have a stronger cash-on-cash return because you’re using less of your funds.

Average Short-Term Rental Capitalization (Cap) Rates

Another metric shows the market value of real estate as a revenue-producing asset — average short-term rental capitalization (cap) rate. An income-generating asset that has a high cap rate as well as charges average market rental prices has a good value. When investment properties in an area have low cap rates, they typically will cost more. You can get the cap rate for possible investment property by dividing the Net Operating Income (NOI) by the Fair Market Value or asking price of the investment property. This gives you a ratio that is the yearly return, or cap rate.

Local Attractions

Big public events and entertainment attractions will entice vacationers who will look for short-term rental houses. When a city has places that regularly produce must-see events, like sports coliseums, universities or colleges, entertainment halls, and adventure parks, it can attract visitors from other areas on a regular basis. At specific occasions, regions with outdoor activities in the mountains, oceanside locations, or near rivers and lakes will draw large numbers of visitors who require short-term rental units.

When a home flipper acquires a property cheaper than its market worth, renovates it so that it becomes more valuable, and then liquidates the home for revenue, they are referred to as a fix and flip investor. The keys to a lucrative investment are to pay less for the property than its existing worth and to carefully compute the amount you need to spend to make it sellable.

It is a must for you to figure out what properties are being sold for in the community. You always have to check the amount of time it takes for homes to close, which is illustrated by the Days on Market (DOM) indicator. Disposing of real estate fast will keep your expenses low and secure your profitability.

To help distressed home sellers locate you, enter your firm in our directories of cash property buyers in Will County IL and real estate investors in Will County IL.

Also, hunt for property bird dogs in Will County IL. Specialists in our catalogue specialize in acquiring desirable investments while they’re still under the radar.

Factors to Consider

Median Home Price

Median real estate price data is a key gauge for evaluating a potential investment area. Low median home prices are a sign that there is a good number of real estate that can be bought for less than market value. This is a key ingredient of a successful investment.

If you notice a rapid decrease in real estate market values, this could signal that there are potentially homes in the neighborhood that qualify for a short sale. Real estate investors who work with short sale processors in Will County IL get regular notices regarding potential investment properties. Discover how this happens by reading our explanation ⁠— How to Successfully Buy a Short Sale House.

Property Appreciation Rate

The shifts in real estate market worth in a location are crucial. You’re searching for a consistent growth of the area’s property market values. Rapid property value growth may show a value bubble that is not sustainable. Purchasing at an inappropriate time in an unstable environment can be devastating.

Average Renovation Costs

Look carefully at the potential repair expenses so you will be aware whether you can reach your targets. The way that the local government processes your application will affect your investment as well. You have to understand whether you will need to employ other experts, such as architects or engineers, so you can be prepared for those costs.

Population Growth

Population growth statistics allow you to take a peek at housing need in the city. When the population is not expanding, there isn’t going to be a sufficient supply of homebuyers for your houses.

Median Population Age

The median population age is a simple indication of the supply of possible homebuyers. The median age better not be lower or more than that of the average worker. Individuals in the local workforce are the most dependable real estate buyers. People who are preparing to leave the workforce or have already retired have very particular residency requirements.

Unemployment Rate

You aim to have a low unemployment rate in your investment region. It should always be lower than the US average. If it’s also less than the state average, that’s much more desirable. Non-working individuals can’t purchase your real estate.

Income Rates

Median household and per capita income levels tell you if you will see qualified purchasers in that location for your houses. Most buyers have to obtain financing to purchase real estate. Home purchasers’ capacity to qualify for financing relies on the level of their salaries. You can determine from the community’s median income whether enough people in the location can manage to buy your houses. You also need to have wages that are improving over time. Construction spendings and home purchase prices increase periodically, and you need to know that your potential homebuyers’ wages will also climb up.

Number of New Jobs Created

The number of employment positions created on a regular basis shows if wage and population increase are feasible. Houses are more conveniently liquidated in an area that has a robust job market. Qualified skilled employees looking into purchasing a property and deciding to settle prefer relocating to areas where they won’t be unemployed.

Hard Money Loan Rates

Real estate investors who sell upgraded homes frequently use hard money funding instead of regular loans. This plan enables investors make desirable ventures without hindrance. Locate top-rated hard money lenders in Will County IL so you may match their fees.

Those who aren’t well-versed regarding hard money lenders can uncover what they should understand with our resource for newbies — What Is Hard Money Lending?.

In real estate wholesaling, you locate a house that real estate investors would consider a good deal and sign a contract to purchase it. When a real estate investor who approves of the property is found, the contract is sold to them for a fee. The contracted property is sold to the real estate investor, not the real estate wholesaler. You’re selling the rights to buy the property, not the house itself.

Wholesaling relies on the participation of a title insurance firm that’s comfortable with assigning contracts and comprehends how to work with a double closing. Hunt for wholesale friendly title companies in Will County IL in HouseCashin’s list.

Our comprehensive guide to wholesaling can be found here: Ultimate Guide to Wholesaling Real Estate. When pursuing this investment plan, place your business in our list of the best home wholesalers in Will County IL. That will help any potential clients to see you and initiate a contact.

Factors to Consider

Median Home Prices

Median home prices in the area will inform you if your designated purchase price level is viable in that location. A city that has a good source of the marked-down investment properties that your clients need will have a below-than-average median home purchase price.

A sudden drop in property worth could lead to a high number of ‘underwater’ properties that short sale investors look for. Wholesaling short sale houses often delivers a list of different perks. Nevertheless, it also presents a legal risk. Find out about this from our extensive explanation Can I Wholesale a Short Sale Home?. When you’ve decided to attempt wholesaling short sales, make sure to employ someone on the list of the best short sale real estate attorneys in Will County IL and the best mortgage foreclosure attorneys in Will County IL to assist you.

Property Appreciation Rate

Median home market value fluctuations clearly illustrate the housing value picture. Investors who need to liquidate their properties anytime soon, such as long-term rental landlords, need a market where residential property values are increasing. A weakening median home price will indicate a weak leasing and home-buying market and will eliminate all sorts of real estate investors.

Population Growth

Population growth stats are something that your future investors will be aware of. If they find that the community is expanding, they will conclude that additional residential units are needed. This combines both rental and resale real estate. A community that has a declining community will not interest the real estate investors you want to purchase your contracts.

Median Population Age

A good residential real estate market for real estate investors is agile in all aspects, notably renters, who evolve into homebuyers, who move up into more expensive properties. For this to happen, there needs to be a strong employment market of prospective tenants and homebuyers. That’s why the city’s median age should be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income in a good real estate investment market have to be increasing. If renters’ and homebuyers’ salaries are going up, they can absorb soaring rental rates and residential property purchase costs. That will be crucial to the investors you are trying to reach.

Unemployment Rate

Investors will carefully evaluate the location’s unemployment rate. Tenants in high unemployment places have a tough time making timely rent payments and a lot of them will stop making rent payments completely. This negatively affects long-term investors who intend to rent their property. Investors can’t count on tenants moving up into their homes when unemployment rates are high. This can prove to be difficult to locate fix and flip investors to close your buying contracts.

Number of New Jobs Created

The frequency of more jobs appearing in the region completes an investor’s estimation of a future investment spot. New jobs created lead to a high number of workers who need houses to lease and buy. Long-term investors, like landlords, and short-term investors that include flippers, are drawn to areas with consistent job creation rates.

Average Renovation Costs

Rehabilitation spendings have a important impact on a flipper’s profit. Short-term investors, like house flippers, will not make money if the price and the improvement costs total to a higher amount than the After Repair Value (ARV) of the home. Below average rehab spendings make a place more desirable for your main buyers — rehabbers and rental property investors.

Investing in mortgage notes (loans) works when the mortgage loan can be obtained for less than the face value. The borrower makes future loan payments to the investor who has become their new mortgage lender.

Performing notes mean loans where the debtor is always on time with their payments. Performing notes earn repeating income for you. Non-performing notes can be restructured or you could pick up the property at a discount via a foreclosure process.

Ultimately, you might have a large number of mortgage notes and require additional time to service them on your own. At that time, you might want to utilize our catalogue of Will County top note servicing companies and reassign your notes as passive investments.

If you decide to pursue this strategy, affix your venture to our directory of companies that buy mortgage notes in Will County IL. This will help you become more visible to lenders offering profitable possibilities to note buyers like yourself.

Factors to consider

Foreclosure Rates

Low foreclosure rates are a sign that the area has opportunities for performing note buyers. If the foreclosures are frequent, the region may still be good for non-performing note investors. The locale ought to be active enough so that note investors can complete foreclosure and liquidate properties if necessary.

Foreclosure Laws

Experienced mortgage note investors are completely well-versed in their state’s laws concerning foreclosure. Are you dealing with a mortgage or a Deed of Trust? A mortgage dictates that the lender goes to court for permission to start foreclosure. Lenders don’t need the judge’s agreement with a Deed of Trust.

Mortgage Interest Rates

Mortgage note investors inherit the interest rate of the mortgage loan notes that they buy. This is a big determinant in the returns that you earn. Interest rates are critical to both performing and non-performing note buyers.

Traditional lenders charge dissimilar interest rates in different regions of the country. Private loan rates can be moderately more than conventional rates considering the larger risk taken on by private lenders.

Profitable investors regularly review the interest rates in their area offered by private and traditional mortgage companies.

Demographics

A community’s demographics trends assist note investors to streamline their efforts and appropriately distribute their assets. The location’s population increase, employment rate, job market increase, wage levels, and even its median age provide valuable data for note investors.
Mortgage note investors who invest in performing notes hunt for regions where a high percentage of younger residents maintain higher-income jobs.

The identical region could also be profitable for non-performing mortgage note investors and their end-game strategy. If these note investors need to foreclose, they will need a strong real estate market when they sell the defaulted property.

Property Values

The more equity that a homebuyer has in their home, the better it is for their mortgage note owner. This enhances the possibility that a potential foreclosure auction will make the lender whole. Appreciating property values help raise the equity in the home as the borrower pays down the amount owed.

Property Taxes

Normally, mortgage lenders collect the property taxes from the customer every month. The lender passes on the taxes to the Government to make certain the taxes are submitted on time. The lender will have to compensate if the mortgage payments cease or the investor risks tax liens on the property. If a tax lien is filed, it takes first position over the lender’s loan.

If a region has a record of increasing property tax rates, the total house payments in that community are consistently increasing. Past due borrowers may not have the ability to keep paying increasing payments and might interrupt paying altogether.

Real Estate Market Strength

A region with growing property values offers strong potential for any note investor. Because foreclosure is an important component of note investment strategy, appreciating real estate values are key to discovering a profitable investment market.

Growing markets often offer opportunities for private investors to make the first mortgage loan themselves. For successful investors, this is a profitable portion of their business plan.

A REIT, or Real Estate Investment Trust, means a company that invests in income-producing real estate. Before REITs existed, investing in properties was considered too costly for the majority of investors. The typical investor can afford to invest in a REIT.

Shareholders’ participation in a REIT classifies as passive investing. Investment risk is spread throughout a package of real estate. Shares in a REIT may be sold whenever it is desirable for you. Something you cannot do with REIT shares is to select the investment real estate properties. Their investment is confined to the real estate properties chosen by their REIT.

A Real Estate Investment Fund is a mutual fund that holds stocks of real estate firms. The fund doesn’t hold properties — it holds shares in real estate businesses. These funds make it possible for additional people to invest in real estate properties. Real estate investment funds are not required to pay dividends like a REIT. As with any stock, investment funds’ values rise and decrease with their share market value.

You can select a fund that specializes in a distinct kind of real estate firm, such as commercial, but you can’t propose the fund’s investment real estate properties or markets. Your decision as an investor is to choose a fund that you trust to supervise your real estate investments.