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West Virginia may not be the first spot that comes to mind for real estate investments. But, Investing in real estate in West Virginia can be a great business decision, whether you choose to do so actively or passively.
My dad has actually made an income from buying fix-and-flip properties in West Virginia, updated them and reselling them for a profit. This is active real estate investment of course since it requires some work on renovation.
If you’re new to real estate investing, you’ll likely have questions, including how to fund your project, what areas in West Virginia to invest in, and how to minimize your work as an investor.
Check out this ultimate guide to passive real estate investing.
What Is Passive Real Estate Investing?
Investing in real estate involves buying and selling or buying and renting real estate assets to turn a profit.
Passive real estate investing typically involves investing in a shared venture or fund as a hands-off investor, such as real estate investment trusts (REITs).
However, with the right plan, passive real estate investing on a large scale may also be possible. In fact, it can be a great way to gain financial independence.
Should You Invest in West Virginia Real Estate?
There are many reasons to consider investing in West Virginia real estate, including:
- The state shows good economic stability.
- A subtle climate makes the state desirable to out-of-state residents.
- There are a good number of skilled professionals.
- Many large companies are based in West Virginia.
- West Virginia doesn’t experience as many natural disasters as other states.
- Home prices are lower than in other states, requiring less up-front capital investment.
West Virginia is also a popular destination for families, making single-family residential homes a good investment strategy.
Passive Real Estate Investing in West Virginia Tips
The ultimate goal of passive investing is to do as little work as possible and earn as much as you can. Yet, investing in popular passive real estate assets like REITs doesn’t offer as good returns as physical property.
Here are a few ways that you can turn your physical real estate investment into a passive one:
Crowdfunding involves multiple investors sharing in a single asset. By pooling your money with other investors, you can minimize risk and share in the returns.
You own shares of an asset rather than owning physical West Virginia assets. Sometimes, real estate investing companies sell shares to individual investors, which means you own a piece of the business rather than a specific property.
Invest in Real Estate the Easy Way!
Crowdstreet: Earn a return on capital. Make money while you sleep!
Property Management Services
It’s possible to structure your real estate investment so that you do a lot of work upfront and then have minimal to no involvement later.
One way to do this is to hire a property manager. You acquire the asset and manage the contractors to make all necessary repairs and renovations.
Once the home is ready for tenancy, you hire a property manager to handle the rest. From that point on, there is very little work involved for you!
The property manager screens applicants, chooses one based on a background check, and then oversees the property’s day-to-day.
You can have as little or as much involvement as you want in the investment. For example, your property manager can handle lease extensions or outsource contractors for necessary repairs.
Pooling your assets with a trusted partner is another way to enjoy passive profits from physical property.
A silent partner or investor is someone who simply contributes to a project financially but isn’t involved in the day-to-day decisions or operation of the business.
A partnership also allows you to diversify risk and benefit from the skills and knowledge of another person.
How Can You Fund Your First Real Estate Investment?
Are you ready to begin your career in real estate investing, whether as a passive or active investor?
One of the first steps toward acquiring your first investment property is to create a plan and then seek funding.
Consider your financial goals with real estate investing, including location, budget, and how involved you want to be in the project.
Reach out to lenders to consider your financing options. A debt coverage service ratio loan is an excellent option for aspiring West Virginia investors.
Visio Lending offers a DSCR loan West Virginia residents can use to acquire their first investment property.
A DSCR loan allows you to obtain funding for a project even if you have limited income or high debt. Unlike other loan-type providers, a DSCR lender only calculates the potential returns of the investment property.
You should be approved if you can demonstrate that the property is likely to earn.
Choosing the right property is also crucial. You’ll usually get the best returns on a property requiring repairs or renovations.
But, you also want to choose something in an area in high demand in West Virginia. West Virginia cities with ample job opportunities and colleges are usually a good investment. Wheeling and Morgantown, West Virginia, are a couple of great investment options.
West Virginia offers many lucrative real estate investing options, whether you want to be heavily involved or completely passive in the investment.
Choosing the right location and lender are two of the most important things to do when preparing for your first investment. You’ll also want to consider your level of involvement to ensure you choose the right investment.
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