Ultimate West Virginia Real Estate Investing Guide for 2023

The term BRRRR is an illustration of a long-term lease plan — Buy, Rehab, Rent, Refinance, Repeat. BRRRR is a strategy for continuous growth. It is required that you are qualified to obtain a “cash-out” mortgage refinance for the plan to be successful.

When you have concluded rehabbing the rental, its value has to be higher than your complete purchase and renovation expenses. The house is refinanced based on the ARV and the difference, or equity, is given to you in cash. This capital is reinvested into one more investment asset, and so on. You buy additional houses or condos and continually expand your rental revenues.

If your investment real estate portfolio is large enough, you can delegate its management and enjoy passive income. Find good property management companies by looking through our directory.

Factors to Consider

Population Growth

Population rise or shrinking shows you if you can expect reliable returns from long-term property investments. A growing population typically illustrates active relocation which translates to new renters. The city is appealing to businesses and employees to locate, find a job, and create households. An expanding population builds a stable foundation of renters who will stay current with rent increases, and a strong property seller’s market if you need to sell your investment assets.

Property Taxes

Real estate taxes, maintenance, and insurance expenses are investigated by long-term lease investors for calculating costs to assess if and how the investment strategy will work out. Investment property located in high property tax markets will have weaker profits. Unreasonable property tax rates may predict an unstable location where costs can continue to grow and should be treated as a warning.

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 handle. The rate you can charge in an area will affect the amount you are able to pay based on the number of years it will take to pay back those funds. A large p/r signals you that you can set modest rent in that market, a lower p/r says that you can charge more.

Median Gross Rents

Median gross rents demonstrate whether an area’s rental market is dependable. You need to discover a location with regular median rent increases. Declining rents are an alert to long-term rental investors.

Median Population Age

Median population age should be similar to the age of a usual worker if a community has a consistent supply of renters. This can also show that people are migrating into the area. If you discover a high median age, your stream of renters is reducing. That is a weak long-term economic prospect.

Employment Base Diversity

Accommodating multiple employers in the location makes the economy less unpredictable. If workers are concentrated in a couple of dominant enterprises, even a slight disruption in their business could cause you to lose a great deal of tenants and expand your risk substantially.

Unemployment Rate

High unemployment leads to smaller amount of renters and an uncertain housing market. Otherwise profitable companies lose customers when other businesses retrench people. People who continue to keep their workplaces can discover their hours and wages cut. Even people who have jobs may find it challenging to keep up with their rent.

Income Rates

Median household and per capita income data is a useful instrument to help you discover the communities where the renters you are looking for are living. Rising incomes also inform you that rents can be increased over your ownership of the rental home.

Number of New Jobs Created

The more jobs are regularly being provided in a city, the more dependable your renter source will be. A market that produces jobs also increases the amount of players in the housing market. This enables you to purchase more rental assets and replenish current empty units.

School Ratings

School reputation in the city will have a significant influence on the local real estate market. Companies that are considering moving want superior schools for their employees. Business relocation creates more renters. Recent arrivals who purchase a house keep housing values strong. For long-term investing, hunt for highly graded schools in a potential investment market.

Property Appreciation Rates

Robust property appreciation rates are a necessity for a lucrative long-term investment. You have to be positive that your investment assets will grow in price until you decide to dispose of them. You don’t want to allot any time examining regions with substandard property appreciation rates.

Residential units where tenants stay in furnished accommodations for less than four weeks are referred to as short-term rentals. Short-term rental owners charge a higher rate each night than in long-term rental properties. Short-term rental homes may necessitate more frequent maintenance and sanitation.

House sellers standing by to close on a new residence, vacationers, and business travelers who are staying in the area for a few days prefer renting apartments short term. Regular property owners can rent their houses or condominiums on a short-term basis using sites like AirBnB and VRBO. Short-term rentals are deemed as a smart approach to embark upon investing in real estate.

The short-term rental housing business involves dealing with tenants more regularly compared to yearly rental units. Because of this, owners deal with problems repeatedly. Consider controlling your exposure with the help of any of the best real estate attorneys in West Virginia.

Factors to Consider

Short-Term Rental Income

Initially, calculate how much rental income you should earn to meet your estimated return. Understanding the average rate of rent being charged in the community for short-term rentals will help you select a good area to invest.

Median Property Prices

When purchasing real estate for short-term rentals, you must determine the budget you can pay. To find out if a community has possibilities for investment, investigate the median property prices. You can calibrate your property search by evaluating median values in the community’s sub-markets.

Price Per Square Foot

Price per square foot can be affected even by the design and layout of residential properties. A home with open entrances and vaulted ceilings can’t be compared with a traditional-style residential unit with more floor space. If you remember this, the price per square foot can provide you a general estimation of real estate prices.

Short-Term Rental Occupancy Rate

A quick check on the city’s short-term rental occupancy levels will tell you if there is a need in the region for additional short-term rental properties. When most of the rentals have few vacancies, that area demands new rental space. If landlords in the community are having problems renting their existing properties, you will have difficulty renting yours.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will show you if the purchase is a reasonable use of your money. You can compute the cash-on-cash return by taking your Net Operating Income (NOI) and dividing it by your cash investment. The answer is a percentage. When an investment is high-paying enough to return the amount invested fast, you will have a high percentage. Mortgage-based purchases will reap better cash-on-cash returns because you will be using less of your own capital.

Average Short-Term Rental Capitalization (Cap) Rates

This metric compares property value to its annual income. An income-generating asset that has a high cap rate and charges average market rents has a high value. Low cap rates reflect higher-priced rental units. You can get the cap rate for possible investment real estate by dividing the Net Operating Income (NOI) by the Fair Market Value or asking price of the investment property. This presents you a ratio that is the per-annum return, or cap rate.

Local Attractions

Short-term tenants are commonly travellers who visit a community to enjoy a recurrent significant event or visit tourist destinations. This includes top sporting tournaments, kiddie sports contests, schools and universities, big auditoriums and arenas, carnivals, and amusement parks. At certain occasions, places with outdoor activities in mountainous areas, coastal locations, or along rivers and lakes will draw large numbers of visitors who require short-term housing.

To fix and flip a house, you should get it for less than market worth, handle any required repairs and enhancements, then sell the asset for better market value. Your estimate of repair spendings should be accurate, and you have to be capable of purchasing the property below market price.

You also need to know the housing market where the home is positioned. The average number of Days On Market (DOM) for homes sold in the area is critical. Selling real estate fast will keep your costs low and maximize your revenue.

So that property owners who have to liquidate their house can effortlessly find you, highlight your status by utilizing our catalogue of the best real estate cash buyers in West Virginia along with the best real estate investors in West Virginia.

Additionally, search for the best real estate bird dogs in West Virginia. These experts specialize in quickly discovering lucrative investment ventures before they hit the market.

Factors to Consider

Median Home Price

The location’s median home value should help you determine a suitable community for flipping houses. If purchase prices are high, there might not be a stable amount of run down homes in the market. This is a basic component of a fix and flip market.

If area information shows a sharp drop in real estate market values, this can highlight the availability of potential short sale houses. Real estate investors who work with short sale processors in West Virginia receive regular notices regarding potential investment real estate. Discover more concerning this sort of investment described by our guide How to Buy a Short Sale Home.

Property Appreciation Rate

Are property values in the city moving up, or moving down? Fixed upward movement in median values indicates a robust investment environment. Property purchase prices in the area need to be going up constantly, not quickly. You could end up purchasing high and selling low in an unsustainable market.

Average Renovation Costs

You’ll need to analyze building expenses in any prospective investment area. The manner in which the local government goes about approving your plans will have an effect on your investment as well. If you have to show a stamped set of plans, you will have to include architect’s fees in your costs.

Population Growth

Population growth is a good indicator of the potential or weakness of the area’s housing market. If there are buyers for your rehabbed properties, it will indicate a positive population increase.

Median Population Age

The median population age is a contributing factor that you might not have included in your investment study. It better not be lower or more than the age of the usual worker. Workforce can be the people who are probable home purchasers. The needs of retirees will most likely not fit into your investment venture strategy.

Unemployment Rate

While checking a market for investment, look for low unemployment rates. An unemployment rate that is less than the nation’s median is preferred. If the city’s unemployment rate is lower than the state average, that is an indication of a good financial market. If they want to acquire your improved property, your buyers need to be employed, and their clients too.

Income Rates

Median household and per capita income amounts tell you whether you will obtain adequate home purchasers in that region for your residential properties. Most people have to take a mortgage to purchase a house. The borrower’s salary will show how much they can afford and whether they can buy a home. Median income will let you determine if the standard homebuyer can afford the property you plan to market. Specifically, income increase is vital if you prefer to expand your investment business. To stay even with inflation and increasing construction and material costs, you have to be able to periodically mark up your purchase rates.

Number of New Jobs Created

Knowing how many jobs are generated per year in the community adds to your confidence in a community’s real estate market. A growing job market indicates that a higher number of people are amenable to investing in a home there. With additional jobs appearing, more potential buyers also relocate to the community from other towns.

Hard Money Loan Rates

Fix-and-flip property investors frequently employ hard money loans rather than typical financing. This lets investors to immediately purchase desirable properties. Discover the best private money lenders in West Virginia so you may compare their fees.

Investors who aren’t experienced in regard to hard money loans can learn what they should learn with our resource for newbies — How Hard Money Loans Work.

In real estate wholesaling, you find a residential property that investors may think is a profitable deal and sign a purchase contract to purchase the property. When a real estate investor who needs the residential property is spotted, the sale and purchase agreement is sold to them for a fee. The seller sells the house to the real estate investor instead of the wholesaler. The wholesaler does not sell the property under contract itself — they simply sell the purchase and sale agreement.

The wholesaling mode of investing involves the employment of a title firm that grasps wholesale deals and is informed about and involved in double close purchases. Locate West Virginia title companies for wholesalers by utilizing our directory.

To know how wholesaling works, study our detailed guide How Does Real Estate Wholesaling Work?. When you select wholesaling, add your investment project in our directory of the best investment property wholesalers in West Virginia. That way your possible clientele will know about your availability and contact you.

Factors to Consider

Median Home Prices

Median home prices are instrumental to locating cities where residential properties are selling in your real estate investors’ purchase price range. Since investors prefer investment properties that are available below market price, you will want to see lower median prices as an indirect hint on the potential source of residential real estate that you could buy for lower than market worth.

A quick decrease in home prices might be followed by a hefty number of ’upside-down’ houses that short sale investors hunt for. Short sale wholesalers can gain benefits using this method. Nevertheless, there might be challenges as well. Find out more concerning wholesaling short sales with our comprehensive explanation. Once you are keen to begin wholesaling, look through West Virginia top short sale attorneys as well as West Virginia top-rated foreclosure law offices directories to locate the right advisor.

Property Appreciation Rate

Property appreciation rate boosts the median price stats. Some investors, including buy and hold and long-term rental landlords, specifically need to find that residential property prices in the city are expanding steadily. Both long- and short-term investors will ignore a region where residential values are depreciating.

Population Growth

Population growth figures are critical for your prospective contract assignment purchasers. When the community is multiplying, new residential units are needed. Real estate investors are aware that this will involve both leasing and purchased housing. A location with a shrinking population will not draw the investors you need to buy your purchase contracts.

Median Population Age

A preferable housing market for real estate investors is active in all aspects, including tenants, who evolve into homeowners, who transition into more expensive real estate. To allow this to happen, there has to be a solid employment market of prospective tenants and homebuyers. If the median population age corresponds with the age of wage-earning adults, it signals a robust residential market.

Income Rates

The median household and per capita income in a strong real estate investment market should be increasing. Increases in rent and sale prices must be sustained by improving income in the market. That will be crucial to the property investors you want to attract.

Unemployment Rate

The community’s unemployment stats are a crucial factor for any future wholesale property buyer. Overdue lease payments and default rates are prevalent in regions with high unemployment. Long-term real estate investors who depend on consistent rental payments will suffer in these markets. High unemployment builds problems that will stop people from buying a property. This is a problem for short-term investors buying wholesalers’ contracts to repair and resell a home.

Number of New Jobs Created

Learning how frequently additional job openings are created in the city can help you see if the home is located in a stable housing market. More jobs appearing draw plenty of employees who require properties to rent and buy. No matter if your client supply is comprised of long-term or short-term investors, they will be drawn to an area with constant job opening generation.

Average Renovation Costs

Rehab costs have a major impact on an investor’s profit. Short-term investors, like home flippers, won’t make a profit if the acquisition cost and the repair expenses equal to more money than the After Repair Value (ARV) of the home. The less you can spend to update a home, the friendlier the location is for your future purchase agreement clients.

Buying mortgage notes (loans) pays off when the loan can be purchased for less than the face value. When this occurs, the note investor becomes the debtor’s lender.

Performing notes mean mortgage loans where the homeowner is regularly current on their payments. Performing loans are a steady provider of passive income. Some investors prefer non-performing loans because if the mortgage investor can’t satisfactorily re-negotiate the mortgage, they can always take the collateral property at foreclosure for a low price.

Eventually, you might have multiple mortgage notes and require additional time to oversee them without help. If this occurs, you might choose from the best mortgage loan servicing companies in West Virginia which will make you a passive investor.

If you decide to attempt this investment method, you should place your project in our directory of the best promissory note buyers in West Virginia. This will help you become more visible to lenders providing desirable possibilities to note buyers like yourself.

Factors to Consider

Foreclosure Rates

Performing loan investors prefer markets that have low foreclosure rates. Non-performing loan investors can cautiously take advantage of locations that have high foreclosure rates as well. If high foreclosure rates are causing a slow real estate market, it might be difficult to liquidate the collateral property after you seize it through foreclosure.

<strong>Foreclosure Laws</strong>

It’s important for note investors to learn the foreclosure laws in their state. They will know if their state requires mortgages or Deeds of Trust. When using a mortgage, a court has to approve a foreclosure. Note owners don’t need the court’s agreement with a Deed of Trust.

<strong>Mortgage Interest Rates</strong>

Mortgage note investors acquire the interest rate of the mortgage loan notes that they acquire. This is a big determinant in the investment returns that lenders reach. No matter which kind of mortgage note investor you are, the mortgage loan note’s interest rate will be crucial for your predictions.

Conventional lenders charge dissimilar mortgage loan interest rates in different parts of the country. The higher risk accepted by private lenders is reflected in higher loan interest rates for their loans in comparison with conventional loans.

Note investors should always know the current market interest rates, private and traditional, in potential investment markets.

<strong>Demographics</strong>

When mortgage note buyers are deciding on where to buy notes, they will review the demographic statistics from potential markets. It is critical to determine whether enough people in the neighborhood will continue to have stable employment and wages in the future.
Performing note investors need homebuyers who will pay without delay, developing a consistent revenue stream of mortgage payments.

Note buyers who seek non-performing mortgage notes can also take advantage of strong markets. If non-performing mortgage note investors need to foreclose, they will have to have a thriving real estate market when they liquidate the collateral property.

<strong>Property Values</strong>

Lenders want to find as much equity in the collateral property as possible. This increases the likelihood that a potential foreclosure liquidation will repay the amount owed. Growing property values help improve the equity in the home as the homeowner pays down the amount owed.

<strong>Property Taxes</strong>

Escrows for house taxes are most often paid to the mortgage lender along with the mortgage loan payment. By the time the taxes are payable, there needs to be adequate funds being held to handle them. If the homebuyer stops paying, unless the note holder remits the property taxes, they will not be paid on time. If a tax lien is put in place, the lien takes first position over the your loan.

Because property tax escrows are included with the mortgage loan payment, increasing property taxes mean higher mortgage payments. Borrowers who have a hard time affording their loan payments could drop farther behind and eventually default.

<strong>Real Estate Market Strength</strong>

Both performing and non-performing mortgage note investors can do well in a vibrant real estate environment. The investors can be confident that, when required, a defaulted collateral can be unloaded at a price that is profitable.

Note investors also have a chance to make mortgage loans directly to borrowers in strong real estate areas. For veteran investors, this is a useful portion of their investment plan.

A REIT, or Real Estate Investment Trust, means a business that invests in income-generating assets. REITs were developed to permit average people to invest in properties. REIT shares are economical to most investors.

Shareholders’ participation in a REIT falls under passive investing. The liability that the investors are assuming is spread among a selection of investment real properties. Shareholders have the right to sell their shares at any moment. One thing you can’t do with REIT shares is to choose the investment assets. You are confined to the REIT’s portfolio of real estate properties for investment.

Mutual funds that own shares of real estate businesses are termed real estate investment funds. Any actual property is owned by the real estate firms, not the fund. This is an additional method for passive investors to allocate their portfolio with real estate avoiding the high startup expense or liability. Fund participants might not collect typical distributions like REIT members do. The worth of a fund to an investor is the anticipated appreciation of the value of the fund’s shares.

You can choose a fund that concentrates on a predetermined type of real estate you are aware of, but you do not get to select the market of every real estate investment. You have to rely on the fund’s managers to determine which locations and properties are selected for investment.