West Virginia might not be the first location that comes to mind for real estate investments, but it can be a smart business decision, whether you’re looking to invest actively or passively.
For example, investing in West Virginia real estate has proven profitable for those who buy properties, renovate them, and sell them for a profit. While this is an active form of real estate investment, requiring involvement in the renovation process, there are also ways to invest passively.
If you’re new to real estate investing, you might have questions about funding, the best areas in West Virginia to invest, and how to minimize your involvement as an investor. This guide will help you navigate passive real estate investing.
What Is Passive Real Estate Investing?
Real estate investing typically involves buying and selling or renting out properties to generate a profit. Passive real estate investing, on the other hand, often means investing in a joint venture or fund, such as real estate investment trusts (REITs), without actively managing properties.
With the right strategy, large-scale passive real estate investing is possible and can be a path to financial independence.
Why Invest in West Virginia Real Estate?
There are several reasons to consider real estate investment in West Virginia:
- Economic stability in the state.
- A moderate climate that attracts out-of-state residents.
- A strong pool of skilled professionals.
- Numerous large companies headquartered in West Virginia.
- Fewer natural disasters compared to other states.
- Lower home prices, which require less initial capital investment.
- The popularity of West Virginia among families, making single-family homes a solid investment choice.
Tips for Passive Real Estate Investing in West Virginia
The goal of passive investing is to minimize your workload while maximizing returns. Although investing in assets like REITs is common, physical property investments can often yield better returns.
Here are some strategies for making your physical real estate investment more passive:
- Crowdfunding Investing: This approach involves multiple investors pooling funds to share ownership of a single asset, reducing risk while allowing shared returns. Platforms like CrowdStreet offer opportunities to invest in real estate without direct property ownership.
- Property Management Services: You can reduce your involvement by hiring a property manager. After acquiring and renovating a property, the property manager takes over, handling tenant screening, daily management, and maintenance.
- Partnership: Partnering with someone can also make real estate investing more passive. A silent partner contributes financially without engaging in day-to-day management, allowing you to benefit from shared expertise and reduced risk.
Funding Your First Real Estate Investment
If you’re ready to start your real estate investing journey, whether active or passive, creating a plan and securing funding are critical first steps. Consider your financial goals, budget, location preferences, and desired level of involvement.
Explore financing options, such as Debt Service Coverage Ratio (DSCR) loans, which are beneficial for new investors in West Virginia. These loans focus on the potential income of the investment property rather than the investor’s income or debt level. Lenders like Visio Lending offer DSCR loans that can help you acquire your first property.
Choosing the right property is also key. Properties needing repairs or renovations often provide the best returns, especially in high-demand areas like Wheeling and Morgantown.
Final Thoughts
West Virginia presents numerous opportunities for profitable real estate investing, whether you prefer to be actively involved or take a more passive approach. Selecting the right location and lender, along with determining your level of involvement, are crucial steps to ensure your success in real estate investing.