Ultimate Wood County Real Estate Investing Guide for 2024

The term BRRRR is an illustration of a long-term rental strategy — Buy, Rehab, Rent, Refinance, Repeat. This is a strategy to grow your investment assets not just own a single income generating property. A crucial piece of this formula is to be able to receive a “cash-out” refinance.

The After Repair Value (ARV) of the home needs to total more than the total acquisition and rehab expenses. Then you extract the equity you created out of the asset in a “cash-out” mortgage refinance. You buy your next investment property with the cash-out funds and do it all over again. You add improving assets to your balance sheet and rental income to your cash flow.

When your investment property collection is substantial enough, you may outsource its management and receive passive cash flow. Locate the best Wood County real estate management companies by browsing our directory.

Factors to Consider

Population Growth

Population rise or decline signals you if you can expect strong returns from long-term investments. When you find good population growth, you can be confident that the area is pulling possible renters to the location. Employers consider this as a desirable region to move their company, and for workers to move their families. This equals reliable renters, higher rental revenue, and more possible homebuyers when you need to unload your property.

Property Taxes

Real estate taxes, similarly to insurance and maintenance costs, may vary from market to place and should be considered cautiously when estimating possible profits. Excessive expenses in these areas jeopardize your investment’s returns. Areas with excessive property taxes are not a stable situation for short- and long-term investment and need to be avoided.

Price to Rent Ratio

The price to rent ratio (p/r) is a signal of what amount of rent can be charged compared to the value of the investment property. An investor will not pay a large sum for a property if they can only demand a low rent not enabling them to repay the investment in a reasonable timeframe. You will prefer to find a low p/r to be assured that you can establish your rents high enough to reach acceptable profits.

Median Gross Rents

Median gross rents are an accurate barometer of the approval of a lease market under discussion. Median rents must be increasing to justify your investment. You will not be able to achieve your investment goals in a location where median gross rents are going down.

Median Population Age

Median population age should be nearly the age of a usual worker if a market has a consistent source of renters. You will discover this to be factual in locations where workers are moving. If working-age people aren’t venturing into the market to replace retiring workers, the median age will rise. That is an unacceptable long-term financial picture.

Employment Base Diversity

A diversified amount of enterprises in the market will improve your prospects for strong profits. When the residents are employed by only several significant companies, even a slight interruption in their operations might cost you a lot of renters and expand your liability enormously.

Unemployment Rate

It is not possible to have a sound rental market if there is high unemployment. Otherwise profitable businesses lose customers when other employers retrench workers. This can create a high amount of retrenchments or fewer work hours in the community. Current tenants may delay their rent in these circumstances.

Income Rates

Median household and per capita income rates show you if a sufficient number of preferred tenants live in that community. Existing income information will show you if income growth will enable you to mark up rental charges to achieve your income expectations.

Number of New Jobs Created

An increasing job market equals a constant source of tenants. A higher number of jobs equal a higher number of renters. This allows you to buy more lease assets and replenish current vacant units.

School Ratings

School reputation in the area will have a huge effect on the local housing market. Well-endorsed schools are a necessity for companies that are considering relocating. Relocating companies bring and draw prospective tenants. New arrivals who purchase a home keep real estate market worth up. Highly-rated schools are a vital requirement for a robust property investment market.

Property Appreciation Rates

Strong real estate appreciation rates are a prerequisite for a profitable long-term investment. You have to be confident that your property assets will increase in price until you need to move them. You don’t want to allot any time reviewing cities showing below-standard property appreciation rates.

A short-term rental is a furnished apartment or house where a renter resides for shorter than one month. Long-term rentals, like apartments, charge lower payment per night than short-term rentals. Short-term rental homes could need more constant repairs and sanitation.

Short-term rentals appeal to corporate travelers who are in the city for a few nights, people who are moving and want transient housing, and holidaymakers. Any homeowner can transform their residence into a short-term rental unit with the know-how provided by online home-sharing sites like VRBO and AirBnB. Short-term rentals are viewed to be an effective technique to get started on investing in real estate.

Short-term rental properties require dealing with occupants more frequently than long-term rentals. This leads to the landlord having to frequently deal with complaints. You may need to defend your legal exposure by engaging one of the top Wood County investor friendly real estate attorneys.

Factors to Consider

Short-Term Rental Income

You must find out how much income needs to be earned to make your investment successful. A location’s short-term rental income levels will promptly tell you if you can predict to achieve your estimated rental income levels.

Median Property Prices

When acquiring real estate for short-term rentals, you need to know the amount you can allot. The median market worth of property will tell you if you can manage to participate in that community. You can also utilize median market worth in specific sub-markets within the market to select cities for investing.

Price Per Square Foot

Price per square foot can be misleading if you are looking at different properties. If you are analyzing similar kinds of property, like condominiums or detached single-family homes, the price per square foot is more reliable. You can use this data to obtain a good general idea of home values.

Short-Term Rental Occupancy Rate

The number of short-term rental units that are presently filled in an area is critical data for a landlord. A community that requires more rentals will have a high occupancy level. If the rental occupancy rates are low, there is not enough demand in the market and you should look in another location.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a means to assess the profitability of an investment venture. Take your expected Net Operating Income (NOI) and divide it by your investment cash budget. The percentage you get is your cash-on-cash return. High cash-on-cash return shows that you will recoup your cash more quickly and the purchase will have a higher return. If you get financing for a fraction of the investment amount and spend less of your money, you will receive a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This criterion shows the comparability of property worth to its yearly revenue. Generally, the less a unit costs (or is worth), the higher the cap rate will be. Low cap rates reflect higher-priced real estate. Divide your expected Net Operating Income (NOI) by the investment property’s market worth or listing price. This shows you a ratio that is the per-annum return, or cap rate.

Local Attractions

Short-term rental properties are desirable in places where sightseers are drawn by events and entertainment venues. Vacationers come to specific communities to watch academic and sporting events at colleges and universities, be entertained by competitions, cheer for their kids as they compete in fun events, have fun at yearly carnivals, and drop by theme parks. At certain times of the year, regions with outdoor activities in the mountains, at beach locations, or along rivers and lakes will draw a throng of people who require short-term housing.

To fix and flip a residential property, you need to buy it for less than market price, conduct any needed repairs and improvements, then sell it for better market value. Your evaluation of renovation costs has to be precise, and you should be able to purchase the home below market value.

It’s vital for you to figure out the rates homes are being sold for in the market. The average number of Days On Market (DOM) for houses listed in the city is critical. Liquidating the home fast will help keep your costs low and maximize your returns.

To help distressed home sellers discover you, list your firm in our catalogues of cash home buyers in Wood County WV and real estate investment firms in Wood County WV.

In addition, search for the best property bird dogs in Wood County WV. Specialists in our directory focus on acquiring distressed property investments while they’re still off the market.

Factors to Consider

Median Home Price

When you search for a good area for real estate flipping, look at the median house price in the neighborhood. You’re searching for median prices that are modest enough to suggest investment possibilities in the community. You want lower-priced houses for a profitable fix and flip.

When you notice a sharp drop in property values, this could mean that there are potentially homes in the region that will work for a short sale. You’ll hear about possible investments when you team up with Wood County short sale negotiators. You’ll find more data regarding short sales in our article ⁠— How Do I Buy a Short Sale Home?.

Property Appreciation Rate

Dynamics relates to the route that median home prices are treading. You need a city where home market values are constantly and consistently on an upward trend. Real estate prices in the city should be increasing regularly, not abruptly. Acquiring at an inconvenient period in an unsteady market can be problematic.

Average Renovation Costs

You will have to research building costs in any prospective investment location. The way that the local government goes about approving your plans will affect your venture too. To make a detailed budget, you will want to know whether your construction plans will be required to involve an architect or engineer.

Population Growth

Population statistics will show you if there is an expanding necessity for homes that you can provide. Flat or decelerating population growth is an indication of a sluggish market with not a lot of buyers to justify your effort.

Median Population Age

The median residents’ age is an indicator that you may not have taken into consideration. It better not be less or higher than the age of the regular worker. People in the regional workforce are the most stable home purchasers. The demands of retirees will probably not suit your investment project plans.

Unemployment Rate

You need to see a low unemployment rate in your considered community. It should certainly be lower than the country’s average. When the region’s unemployment rate is lower than the state average, that’s a sign of a strong investing environment. Non-working people won’t be able to purchase your real estate.

Income Rates

The population’s income stats can tell you if the local financial market is strong. Most families have to take a mortgage to purchase real estate. Homebuyers’ ability to be provided a loan depends on the size of their salaries. The median income stats tell you if the city is good for your investment project. You also want to see wages that are increasing consistently. When you want to raise the asking price of your residential properties, you need to be certain that your home purchasers’ wages are also rising.

Number of New Jobs Created

The number of jobs created on a continual basis tells if income and population growth are viable. An expanding job market means that more prospective home buyers are confident in buying a home there. With a higher number of jobs created, new potential buyers also move to the area from other places.

Hard Money Loan Rates

People who purchase, rehab, and sell investment real estate are known to engage hard money and not typical real estate loans. This enables them to immediately pick up distressed properties. Find hard money loan companies in Wood County WV and compare their mortgage rates.

People who are not well-versed regarding hard money lenders can learn what they need to know with our guide for newbie investors — How Does a Hard Money Loan Work?.

As a real estate wholesaler, you sign a purchase contract to purchase a house that other real estate investors will need. A real estate investor then ”purchases” the contract from you. The investor then finalizes the transaction. The wholesaler doesn’t sell the property under contract itself — they only sell the rights to buy it.

The wholesaling form of investing includes the engagement of a title insurance firm that comprehends wholesale deals and is savvy about and engaged in double close transactions. Discover Wood County title companies for wholesalers by utilizing our list.

Our extensive guide to wholesaling can be found here: Property Wholesaling Explained. When pursuing this investing tactic, include your firm in our directory of the best house wholesalers in Wood County WV. This will let your potential investor clients locate and reach you.

Factors to Consider

Median Home Prices

Median home prices in the community under review will quickly show you if your real estate investors’ required real estate are located there. A place that has a sufficient pool of the reduced-value investment properties that your investors need will show a lower median home price.

Accelerated deterioration in real property market values might lead to a number of properties with no equity that appeal to short sale property buyers. This investment method regularly delivers numerous particular benefits. Nevertheless, it also produces a legal liability. Obtain more details on how to wholesale a short sale property in our complete article. Once you’ve resolved to try wholesaling short sales, make sure to employ someone on the list of the best short sale law firms in Wood County WV and the best foreclosure attorneys in Wood County WV to assist you.

Property Appreciation Rate

Median home value movements explain in clear detail the housing value in the market. Investors who want to keep real estate investment assets will have to discover that home prices are steadily appreciating. A weakening median home price will indicate a poor rental and home-buying market and will eliminate all types of real estate investors.

Population Growth

Population growth numbers are essential for your proposed purchase contract purchasers. If the population is growing, additional housing is required. There are more people who rent and plenty of clients who buy homes. If a community is declining in population, it does not necessitate new housing and real estate investors will not look there.

Median Population Age

Real estate investors want to work in a dependable property market where there is a considerable source of tenants, newbie homeowners, and upwardly mobile residents buying better residences. In order for this to happen, there needs to be a solid workforce of potential tenants and homeowners. A place with these characteristics will show a median population age that is equivalent to the employed citizens’ age.

Income Rates

The median household and per capita income in a robust real estate investment market need to be growing. When tenants’ and home purchasers’ wages are increasing, they can manage rising lease rates and home purchase costs. Real estate investors want this in order to reach their anticipated returns.

Unemployment Rate

The region’s unemployment numbers will be a crucial point to consider for any future wholesale property buyer. High unemployment rate prompts many tenants to make late rent payments or default altogether. Long-term investors who depend on stable lease income will lose money in these communities. Investors cannot depend on tenants moving up into their houses when unemployment rates are high. This makes it challenging to find fix and flip real estate investors to close your contracts.

Number of New Jobs Created

The frequency of more jobs appearing in the region completes an investor’s study of a potential investment site. Additional jobs generated result in more employees who need spaces to rent and buy. Long-term real estate investors, like landlords, and short-term investors which include flippers, are gravitating to locations with strong job creation rates.

Average Renovation Costs

An important factor for your client investors, especially house flippers, are renovation expenses in the city. Short-term investors, like house flippers, don’t reach profitability if the purchase price and the improvement expenses equal to a higher amount than the After Repair Value (ARV) of the home. Lower average rehab spendings make a market more profitable for your main customers — flippers and long-term investors.

Mortgage note investing means obtaining debt (mortgage note) from a mortgage holder at a discount. This way, the investor becomes the mortgage lender to the original lender’s debtor.

When a mortgage loan is being paid as agreed, it’s thought of as a performing loan. Performing notes are a stable source of passive income. Investors also invest in non-performing mortgages that the investors either restructure to assist the client or foreclose on to acquire the property below actual worth.

One day, you could accrue a number of mortgage note investments and not have the time to oversee the portfolio by yourself. If this happens, you might select from the best note servicing companies in Wood County WV which will designate you as a passive investor.

Should you decide to take on this investment plan, you should include your venture in our list of the best real estate note buying companies in Wood County WV. Being on our list places you in front of lenders who make lucrative investment opportunities available to note buyers such as yourself.

Factors to consider

Foreclosure Rates

Note investors looking for valuable loans to acquire will hope to find low foreclosure rates in the area. High rates might indicate investment possibilities for non-performing note investors, however they have to be careful. The locale needs to be active enough so that mortgage note investors can foreclose and unload collateral properties if called for.

Foreclosure Laws

Successful mortgage note investors are fully well-versed in their state’s regulations regarding foreclosure. Some states require mortgage paperwork and some use Deeds of Trust. Lenders may have to receive the court’s okay to foreclose on a mortgage note’s collateral. A Deed of Trust authorizes you to file a notice and proceed to foreclosure.

Mortgage Interest Rates

Acquired mortgage notes come with a negotiated interest rate. Your mortgage note investment profits will be impacted by the interest rate. No matter the type of investor you are, the mortgage loan note’s interest rate will be critical for your estimates.

Traditional interest rates may vary by up to a 0.25% around the US. Loans issued by private lenders are priced differently and may be more expensive than conventional loans.

Experienced mortgage note buyers continuously check the rates in their area offered by private and traditional mortgage firms.

Demographics

When mortgage note buyers are choosing where to purchase mortgage notes, they examine the demographic dynamics from potential markets. Investors can interpret a great deal by looking at the size of the populace, how many people have jobs, the amount they make, and how old the residents are.
A young expanding market with a diverse employment base can provide a consistent revenue flow for long-term note investors hunting for performing mortgage notes.

Note buyers who buy non-performing notes can also take advantage of dynamic markets. In the event that foreclosure is necessary, the foreclosed collateral property is more conveniently liquidated in a good market.

Property Values

As a note buyer, you must look for deals that have a comfortable amount of equity. This enhances the chance that a potential foreclosure liquidation will repay the amount owed. The combination of mortgage loan payments that lower the loan balance and annual property market worth growth increases home equity.

Property Taxes

Most borrowers pay real estate taxes via lenders in monthly installments along with their mortgage loan payments. This way, the mortgage lender makes sure that the taxes are paid when payable. If mortgage loan payments aren’t current, the mortgage lender will have to either pay the taxes themselves, or the taxes become delinquent. Tax liens go ahead of all other liens.

If property taxes keep increasing, the homebuyer’s mortgage payments also keep rising. Borrowers who are having a hard time affording their loan payments could fall farther behind and sooner or later default.

Real Estate Market Strength

A community with growing property values promises good potential for any mortgage note investor. Because foreclosure is an important element of mortgage note investment planning, growing real estate values are essential to discovering a good investment market.

Mortgage note investors additionally have a chance to make mortgage notes directly to borrowers in strong real estate communities. This is a profitable source of revenue for experienced investors.

Some real estate investment organizations are structured as trusts called Real Estate Investment Trusts or REITs. This was first invented as a way to enable the typical person to invest in real estate. Shares in REITs are not too costly for most people.

Investing in a REIT is classified as passive investing. REITs handle investors’ risk with a varied group of real estate. Shares can be liquidated whenever it is beneficial for the investor. Investors in a REIT aren’t allowed to suggest or select real estate for investment. You are confined to the REIT’s portfolio of assets for investment.

Real estate investment funds are in essence mutual funds that specialize in real estate businesses, including REITs. The investment real estate properties aren’t possessed by the fund — they are owned by the companies in which the fund invests. This is an additional way for passive investors to allocate their portfolio with real estate without the high initial cost or liability. Real estate investment funds aren’t required to pay dividends unlike a REIT. The benefit to the investor is created by changes in the worth of the stock.

You can select a fund that specializes in a targeted category of real estate you’re knowledgeable about, but you don’t get to pick the location of each real estate investment. Your choice as an investor is to choose a fund that you believe in to handle your real estate investments.