Real estate investment is widely regarded as a stable and profitable venture. Unlike volatile markets like stocks, property values rarely drop to zero, as evidenced by the resilience shown during the 2008 financial crisis. Henderson Investment Group, with over three decades of experience in investment management, provides an in-depth look into the attractiveness of North Carolina for real estate investments.
Investing in property offers the possibility of property appreciation and provides a steady source of rental income. This aspect of real estate investment is particularly appealing for those seeking a more predictable and less risky return on their investments, compared to the speculative nature of stock markets.
North Carolina is an appealing destination for property investors due to several reasons. The state enjoys high occupancy rates, indicating a strong demand for rental properties. There is a growing preference among residents to rent rather than own homes, leading to a diverse tenant demographic.
North Carolina has also been witnessing a robust demand for quality rentals and low long-term interest rates. Since 2008, the property market in North Carolina has outperformed broader indices like the S&P 500, showcasing its resilience and potential for growth.
The average home value in North Carolina, as of September 2019, was around $186,000. Closing costs in the state typically range between 2 to 5 percent of the purchase price, with sellers often bearing most of these costs. Regarding rental property profitability, it’s important to calculate metrics such as cash flow, cap rate, and cash-on-cash return. These calculations help assess the actual returns from rental properties, considering the expenses and the initial investment.
When considering real estate investment in North Carolina, several locations emerge as particularly promising due to their unique characteristics and growing market potential. These prime investment locations include:
Charlotte’s rental property market presents a compelling mix of affordability, growth potential, and quality of life, making it a lucrative destination for real estate investors and renters. The city’s economic stability, population dynamics, attractive rental yields, and property value appreciation trends underscore its desirability in the real estate market.
According to Zillow, the median rental price in Charlotte is $1,909, indicating a balanced mix of affordable and premium rental options in the city. This price range extends from as low as $535 to as high as $11,621 per month.
Interestingly, this median rental price has seen a modest year-on-year increase of $41, although it is slightly lower by $5 compared to the previous month. With ~2,957 rental properties total, Charlotte offers various housing options to cater to different needs and preferences.
Charlotte’s rental market is competitively priced when compared to larger U.S. cities. For instance, its median rent is significantly lower than those in New York, Los Angeles, and San Diego, and it is also $51 less than the national median.
The process of acquiring property in North Carolina can be efficiently managed with the following key steps:
In North Carolina, buyers typically face closing costs averaging around 1.1% of the total property purchase price, as reported by ClosingCorp. This figure represents a combination of financing expenses, property-related fees, and documentation costs, which can vary significantly based on the property’s location. For instance, consider a scenario in Raleigh where the median home value is $500,000; a buyer might incur closing costs of about $5,500. In contrast, in a city like Greensboro, with a median home value of $350,000, the closing costs could amount to approximately $3,850.
Regarding rental property profitability, it’s important to calculate metrics such as cash flow, cap rate, and cash-on-cash return. These calculations help assess the actual returns from rental properties, considering the expenses and the initial investment.
In the face of fluctuating market conditions and consistent housing demand, Henderson Investment Group offers a clear, strategic framework for real estate investment during high-interest periods.
Our analysis has identified three key strategies:
North Carolina’s market boasts high occupancy rates, a growing preference for renting, and robust demand for quality rentals, positioning it as a resilient and promising investment destination. Among the prime locations, Charlotte is the #1 rental market, known for affordability, growth prospects, and a high quality of life.
Our seasoned team is here to guide you through the intricacies of property acquisition in North Carolina, ensuring well-informed decisions and a successful investment journey. Sign up now and get started on your investment property journey!