Ultimate Wood County Real Estate Investing Guide for 2024

BRRRR is an abbreviation of “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a system for consistent growth. It is essential that you be able to obtain a “cash-out” refinance for the strategy to be successful.

When you are done with improving the investment property, its market value should be more than your combined purchase and fix-up costs. The property is refinanced using the ARV and the difference, or equity, is given to you in cash. You purchase your next rental with the cash-out money and start all over again. You buy more and more properties and constantly grow your rental revenues.

If an investor has a significant portfolio of investment properties, it is wise to hire a property manager and establish a passive income source. Find top real estate managers in Wood County OH by using our directory.

Factors to Consider

Population Growth

The growth or decrease of the population can tell you if that market is of interest to rental investors. If the population increase in a community is strong, then more tenants are assuredly moving into the area. Employers view such a region as a desirable community to situate their enterprise, and for employees to move their families. Increasing populations maintain a strong tenant mix that can handle rent bumps and homebuyers who assist in keeping your investment property values up.

Property Taxes

Real estate taxes, upkeep, and insurance expenses are investigated by long-term lease investors for determining expenses to predict if and how the efforts will be viable. Excessive costs in these categories jeopardize your investment’s bottom line. If property tax rates are unreasonable in a particular location, you will want to look in another place.

Price to Rent Ratio

The price to rent ratio (p/r) is a clue to how high of a rent can be collected compared to the purchase price of the investment property. The amount of rent that you can collect in an area will limit the sum you are willing to pay determined by the time it will take to recoup those funds. You are trying to see a low p/r to be assured that you can establish your rental rates high enough to reach good profits.

Median Gross Rents

Median gross rents are a critical illustration of the strength of a rental market. Median rents should be expanding to justify your investment. Shrinking rents are a red flag to long-term rental investors.

Median Population Age

Median population age should be similar to the age of a normal worker if a region has a consistent stream of tenants. If people are migrating into the district, the median age will have no problem staying in the range of the workforce. A high median age means that the current population is aging out without being replaced by younger people migrating in. This is not advantageous for the impending economy of that city.

Employment Base Diversity

Having multiple employers in the city makes the market less volatile. If the region’s workpeople, who are your renters, are employed by a diverse combination of businesses, you cannot lose all of your renters at once (and your property’s value), if a dominant employer in town goes out of business.

Unemployment Rate

You will not be able to get a steady rental income stream in a locality with high unemployment. Non-working individuals won’t be able to purchase products or services. Those who still keep their workplaces may find their hours and salaries reduced. This could result in delayed rents and lease defaults.

Income Rates

Median household and per capita income will let you know if the renters that you require are living in the city. Rising wages also tell you that rental payments can be increased over the life of the property.

Number of New Jobs Created

The more jobs are regularly being produced in a city, the more reliable your renter source will be. An economy that provides jobs also increases the amount of people who participate in the property market. This allows you to purchase more rental assets and fill current vacant units.

School Ratings

Local schools can cause a huge impact on the housing market in their area. Companies that are considering relocating prefer high quality schools for their workers. Reliable tenants are a consequence of a steady job market. Homeowners who move to the city have a positive influence on housing prices. For long-term investing, search for highly accredited schools in a potential investment area.

Property Appreciation Rates

Real estate appreciation rates are an integral ingredient of your long-term investment strategy. You need to be assured that your property assets will grow in price until you need to dispose of them. Small or declining property appreciation rates should eliminate a city from the selection.

A short-term rental is a furnished residence where a tenant resides for less than one month. Long-term rentals, like apartments, impose lower payment a night than short-term ones. These apartments might require more periodic upkeep and cleaning.

Short-term rentals serve clients travelling for work who are in town for a few nights, people who are migrating and want temporary housing, and backpackers. Ordinary real estate owners can rent their homes on a short-term basis via sites like AirBnB and VRBO. Short-term rentals are viewed to be a smart way to embark upon investing in real estate.

The short-term rental strategy involves dealing with occupants more often compared to annual rental properties. That determines that property owners deal with disagreements more frequently. You might need to protect your legal exposure by hiring one of the top Wood County real estate lawyers.

Factors to Consider

Short-Term Rental Income

You have to calculate the range of rental revenue you’re looking for according to your investment budget. A glance at a city’s recent typical short-term rental prices will show you if that is an ideal location for you.

Median Property Prices

Thoroughly evaluate the amount that you can afford to spend on additional investment assets. The median values of real estate will show you if you can manage to invest in that location. You can adjust your area search by analyzing the median values in specific neighborhoods.

Price Per Square Foot

Price per sq ft may be inaccurate when you are examining different properties. When the styles of prospective homes are very different, the price per sq ft might not show a definitive comparison. If you remember this, the price per sq ft may give you a basic estimation of real estate prices.

Short-Term Rental Occupancy Rate

The necessity for more rental units in a community may be checked by examining the short-term rental occupancy level. A high occupancy rate shows that an additional amount of short-term rental space is necessary. If landlords in the market are having issues renting their existing units, you will have trouble filling yours.

Short-Term Rental Cash-on-Cash Return

To know whether it’s a good idea to invest your money in a specific rental unit or area, compute the cash-on-cash return. Take your estimated Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The answer is a percentage. High cash-on-cash return means that you will regain your cash faster and the investment will have a higher return. Financed projects will have a higher cash-on-cash return because you are spending less of your cash.

Average Short-Term Rental Capitalization (Cap) Rates

One metric illustrates the value of a property as a revenue-producing asset — average short-term rental capitalization (cap) rate. In general, the less an investment asset will cost (or is worth), the higher the cap rate will be. Low cap rates reflect higher-priced properties. The cap rate is determined by dividing the Net Operating Income (NOI) by the price or market value. This gives you a percentage that is the year-over-year return, or cap rate.

Local Attractions

Short-term tenants are often people who come to a region to attend a yearly significant activity or visit tourist destinations. This includes top sporting tournaments, kiddie sports competitions, schools and universities, huge auditoriums and arenas, carnivals, and theme parks. Notable vacation attractions are found in mountain and beach points, along waterways, and national or state nature reserves.

To fix and flip a house, you need to get it for below market price, conduct any needed repairs and improvements, then liquidate the asset for full market worth. To keep the business profitable, the flipper has to pay lower than the market price for the property and know the amount it will cost to rehab it.

It is a must for you to understand how much properties are selling for in the city. The average number of Days On Market (DOM) for homes listed in the region is important. To profitably “flip” real estate, you need to liquidate the repaired home before you have to shell out capital to maintain it.

To help distressed property sellers find you, place your business in our lists of companies that buy homes for cash in Wood County OH and property investment firms in Wood County OH.

Additionally, look for top property bird dogs in Wood County OH. Professionals discovered here will assist you by quickly finding possibly profitable ventures prior to them being listed.

Factors to Consider

Median Home Price

When you search for a suitable area for real estate flipping, investigate the median home price in the city. Low median home values are an indicator that there must be an inventory of real estate that can be acquired below market value. This is an essential ingredient of a profit-making investment.

If area data signals a sudden decrease in property market values, this can indicate the availability of possible short sale homes. You can be notified about these opportunities by working with short sale processing companies in Wood County OH. You will uncover additional data concerning short sales in our extensive blog post ⁠— What Is the Process of Buying a Short Sale Home?.

Property Appreciation Rate

The movements in real property values in a city are very important. You’re eyeing for a stable appreciation of the city’s property market rates. Real estate purchase prices in the market should be increasing regularly, not rapidly. Acquiring at an inappropriate time in an unstable market condition can be disastrous.

Average Renovation Costs

Look thoroughly at the potential rehab costs so you will know whether you can achieve your goals. Other costs, such as clearances, can inflate your budget, and time which may also develop into additional disbursement. To make an accurate budget, you will need to know whether your construction plans will be required to use an architect or engineer.

Population Growth

Population increase is a good indication of the reliability or weakness of the location’s housing market. If there are purchasers for your renovated properties, the data will indicate a robust population increase.

Median Population Age

The median residents’ age is a straightforward sign of the presence of ideal home purchasers. The median age in the community needs to equal the age of the average worker. A high number of such residents indicates a substantial pool of home purchasers. The demands of retired people will most likely not fit into your investment venture plans.

Unemployment Rate

While evaluating a city for real estate investment, search for low unemployment rates. The unemployment rate in a prospective investment region should be lower than the national average. When it’s also lower than the state average, that’s much better. Unemployed people cannot acquire your property.

Income Rates

The residents’ income figures can brief you if the community’s economy is strong. When families acquire a home, they typically have to take a mortgage for the purchase. The borrower’s income will determine how much they can borrow and whether they can buy a home. You can determine based on the city’s median income whether enough individuals in the city can afford to buy your homes. Scout for places where wages are going up. To stay even with inflation and soaring construction and supply expenses, you have to be able to periodically mark up your purchase prices.

Number of New Jobs Created

The number of jobs created on a continual basis reflects whether wage and population growth are sustainable. A larger number of people acquire houses if their local financial market is adding new jobs. Fresh jobs also entice workers relocating to the area from other districts, which also invigorates the property market.

Hard Money Loan Rates

People who acquire, renovate, and flip investment properties are known to engage hard money and not typical real estate financing. This enables investors to rapidly buy undervalued real estate. Discover top hard money lenders for real estate investors in Wood County OH so you can match their costs.

Those who aren’t experienced in regard to hard money loans can learn what they should learn with our article for those who are only starting — How Hard Money Loans Work.

Wholesaling is a real estate investment approach that entails scouting out properties that are appealing to investors and putting them under a purchase contract. A real estate investor then “buys” the contract from you. The property under contract is sold to the real estate investor, not the real estate wholesaler. The wholesaler does not sell the property — they sell the contract to purchase one.

This strategy requires employing a title company that’s familiar with the wholesale contract assignment operation and is capable and predisposed to coordinate double close transactions. Find title services for real estate investors in Wood County OH that we selected for you.

To learn how wholesaling works, look through our comprehensive article What Is Wholesaling in Real Estate Investing?. As you go about your wholesaling venture, place your firm in HouseCashin’s directory of Wood County top wholesale real estate companies. This will help your future investor clients discover and reach you.

Factors to Consider

Median Home Prices

Median home values in the area being considered will quickly notify you whether your real estate investors’ target real estate are located there. As real estate investors want investment properties that are available below market price, you will want to find below-than-average median purchase prices as an implied tip on the possible supply of residential real estate that you could purchase for lower than market price.

A fast decline in real estate worth might be followed by a sizeable number of ’upside-down’ homes that short sale investors search for. This investment method often delivers several particular perks. Nonetheless, be aware of the legal challenges. Gather additional information on how to wholesale a short sale home with our comprehensive explanation. Once you are prepared to begin wholesaling, hunt through Wood County top short sale law firms as well as Wood County top-rated real estate foreclosure attorneys directories to discover the appropriate advisor.

Property Appreciation Rate

Property appreciation rate completes the median price stats. Real estate investors who plan to sell their properties in the future, such as long-term rental landlords, require a market where property values are increasing. Both long- and short-term real estate investors will avoid a location where housing purchase prices are depreciating.

Population Growth

Population growth figures are crucial for your potential purchase contract purchasers. When the population is growing, more residential units are required. There are more individuals who rent and additional clients who buy homes. A market with a shrinking population will not interest the investors you require to purchase your contracts.

Median Population Age

A vibrant housing market requires people who start off leasing, then shifting into homebuyers, and then moving up in the housing market. A location with a large workforce has a strong supply of tenants and purchasers. That is why the location’s median age needs to be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income in a robust real estate investment market need to be improving. Surges in rent and listing prices will be backed up by improving wages in the area. Investors want this if they are to meet their anticipated profits.

Unemployment Rate

The region’s unemployment numbers are a vital aspect for any potential contracted house purchaser. Delayed lease payments and default rates are worse in regions with high unemployment. Long-term investors who count on timely rental income will lose revenue in these places. Real estate investors can’t rely on tenants moving up into their houses when unemployment rates are high. Short-term investors will not risk being pinned down with a property they can’t liquidate fast.

Number of New Jobs Created

Learning how soon new employment opportunities are produced in the market can help you see if the house is located in a dynamic housing market. Job generation signifies more workers who require a place to live. This is beneficial for both short-term and long-term real estate investors whom you depend on to close your contracted properties.

Average Renovation Costs

Rehab costs will matter to many property investors, as they normally purchase bargain neglected homes to fix. The cost of acquisition, plus the costs of rehabilitation, should total to less than the After Repair Value (ARV) of the house to allow for profit. Below average remodeling spendings make a market more profitable for your main clients — rehabbers and long-term investors.

Investing in mortgage notes (loans) works when the note can be bought for a lower amount than the face value. When this happens, the note investor becomes the borrower’s lender.

Loans that are being repaid on time are called performing notes. These notes are a consistent provider of cash flow. Non-performing loans can be rewritten or you may buy the collateral at a discount via a foreclosure procedure.

At some point, you could grow a mortgage note portfolio and notice you are needing time to manage your loans on your own. At that time, you might want to utilize our list of Wood County top note servicing companies and reclassify your notes as passive investments.

Should you want to take on this investment method, you ought to include your project in our directory of the best real estate note buyers in Wood County OH. Joining will help you become more visible to lenders providing lucrative possibilities to note investors like you.

Factors to consider

Foreclosure Rates

Performing loan investors research areas that have low foreclosure rates. High rates could signal investment possibilities for non-performing loan note investors, but they have to be careful. However, foreclosure rates that are high can signal an anemic real estate market where liquidating a foreclosed unit would be hard.

Foreclosure Laws

It is necessary for note investors to know the foreclosure laws in their state. Are you working with a mortgage or a Deed of Trust? Lenders might have to get the court’s approval to foreclose on a home. A Deed of Trust enables you to file a public notice and proceed to foreclosure.

Mortgage Interest Rates

Note investors acquire the interest rate of the mortgage loan notes that they obtain. This is an important component in the returns that you achieve. Interest rates are critical to both performing and non-performing mortgage note buyers.

Traditional lenders price dissimilar interest rates in various locations of the country. Private loan rates can be slightly higher than traditional rates due to the higher risk taken on by private lenders.

Mortgage note investors ought to always be aware of the current market mortgage interest rates, private and traditional, in possible mortgage note investment markets.

Demographics

An effective note investment plan incorporates a research of the community by utilizing demographic information. The city’s population increase, employment rate, job market growth, wage levels, and even its median age provide usable facts for mortgage note investors.
A youthful expanding market with a vibrant job market can contribute a consistent revenue flow for long-term investors hunting for performing mortgage notes.

Non-performing note purchasers are looking at related components for various reasons. If these note buyers have to foreclose, they’ll need a strong real estate market when they unload the defaulted property.

Property Values

As a mortgage note investor, you will look for borrowers with a comfortable amount of equity. When the investor has to foreclose on a loan with little equity, the foreclosure sale might not even repay the amount invested in the note. Growing property values help improve the equity in the property as the homeowner lessens the amount owed.

Property Taxes

Payments for property taxes are typically sent to the mortgage lender along with the loan payment. When the taxes are due, there should be enough funds being held to handle them. If loan payments are not current, the lender will have to either pay the taxes themselves, or the taxes become past due. When property taxes are delinquent, the municipality’s lien supersedes all other liens to the head of the line and is satisfied first.

Because property tax escrows are included with the mortgage payment, increasing property taxes mean higher mortgage payments. Borrowers who have difficulty affording their mortgage payments may fall farther behind and eventually default.

Real Estate Market Strength

Both performing and non-performing note investors can be profitable in an expanding real estate environment. It’s crucial to know that if you need to foreclose on a collateral, you won’t have trouble getting a good price for it.

Note investors additionally have an opportunity to make mortgage loans directly to borrowers in strong real estate markets. For veteran investors, this is a useful segment of their business plan.

A REIT, or Real Estate Investment Trust, is a company that invests in income-producing assets. This was originally done as a way to allow the everyday investor to invest in real estate. Shares in REITs are economical for the majority of people.

Shareholders’ involvement in a REIT falls under passive investing. Investment liability is diversified throughout a portfolio of properties. Investors are able to sell their REIT shares anytime they need. Members in a REIT aren’t able to recommend or pick real estate for investment. You are restricted to the REIT’s selection of real estate properties for investment.

Real estate investment funds are in essence mutual funds focusing on real estate businesses, including REITs. The investment real estate properties are not held by the fund — they are owned by the firms in which the fund invests. Investment funds may be a cost-effective way to combine real estate properties in your allotment of assets without needless liability. Funds are not required to distribute dividends unlike a REIT. The worth of a fund to someone is the projected appreciation of the price of its shares.

You can pick a fund that concentrates on particular segments of the real estate industry but not particular markets for individual real estate property investment. Your decision as an investor is to pick a fund that you trust to oversee your real estate investments.