Thinking of becoming a Charleston real estate investor? Well, you are in luck because Charleston is an investment goldmine. Rents are rising, the quality of life is high, the cost of living is low, the economy is stable, and the job market is growing.
Reasons to Buy Investment Property in Charleston, SC
There are a variety of factors that have made Charleston, SC such an attractive investment destination.
First off, the tax climate in South Carolina is attractive. It’s particularly attractive to retirees. According to the U.S. Census Bureau, the Palmetto state offers one of the lowest per capita tax rates in the country.
Secondly, aside from favorable tax rates, retirees also get tons of benefits including moderate sales tax, retirement income deductions, and state tax exemption on Social Security income. Tax deferments are another common reason for investing in Charleston’s real estate. Real estate offers depreciation, appreciation, principal pay down and cash flow.
Third, Charleston is relatively safe. There are many neighborhoods in Charleston, SC that that will provide you with ultimate safety. This makes the city an attractive location for families.
Fourth, 46% of the population are renters. This represents around 60,000 people. The city is the prime rental market for families, students, and millennials. Speaking of millennials, Charleston has been ranked in the top 30 best cities for millennials to live in the country.
Lastly, homes here are relatively affordable for investors while the rate of return is high. The median home value in Charleston is $269,400. A two-bedroom home in Charleston rents for an average price of $1,052 while the average rent nationally for a similar property is $949.
As you already know, location is everything when it comes to property investments. So in the next section, you’ll find some of the best areas to consider investing in Charleston, SC.
5 Best Areas to Buy Investment Property in Charleston, SC
Nestled between Cooper and Ashley Rivers, the Charleston peninsula is an attractive investment destination. The area features hidden alleyways, cobblestone streets, and church steeples.
Easily bikeable and walkable in size, the area is home to a varied population. From college students to born and raised Charlestonians and everyone in between.
Summerville is also another area that Charleston real estate investors should consider investing in. It’s conveniently located along I-26 and offers a quick commute with close proximity to Google, Volvo, Boeing, and many of the area hospitals.
Additionally, Summerville is considered a desirable place to live because it has some of the best school districts around. It’s also known for the impressive successes of their high school football teams.
3. Mount Pleasant
Mount Pleasant is conveniently located between downtown and the popular beaches of Isle of Palms and Sullivan’s Island. It’s readily known for its robust recreation program and its award-winning public schools.
4. Stiles Point
Stiles Point is located on James Island. The neighborhood offers a blend of antebellum architectural style with state-of-the-art upgrades. It was named after the founder of the cotton plantation – Benjamin Stiles.
5. Grimball Gates
Grimball Gates is the ideal neighborhood for “easy living.” Located several miles south of the Charleston peninsula, the neighborhood boasts of stately country homes with pond, marsh, and river views.
5 Real Estate Investing Tips
Purchasing an investment property is a huge financial undertaking. Therefore, you want to make sure that you make the right investment decision. To get you started, here are some investment tips.
1. Understand Your Investment Property’s Financing
Making the decision to buy a Charleston investment property is almost always the easier part. Securing its financing is often the challenge. Choosing the wrong financing company or option can make or break your investment ROI.
Now, there are various financing options available for Charleston property investors. Common financing options include home equity, fix-and-flip loans, and conventional bank loans. Before choosing any one of them, make sure you’ve done your homework.
2. Hire a Team of Professionals
There is a lot of tasks to handle, especially if you are a beginner landlord. That’s why it’s sensible to surround yourself with a team of real estate professionals to help you whenever you need help.
A successful team of real estate professionals includes people to keep properties in top-notch condition, solve legal problems, secure reliable tenants, and to help balance the books.
3. Improve Your Rental Property Investment’s Income
Cash flow is king! Simply put, positive cash flow means that your investment property is profitable. Obviously, this is what you should aim for.
The following are some tips to help you in this regard:
- Improve the appeal of your investment property. You can start by refreshing the paint and upgrading appliances. By doing this, you’ll be able to attract the right tenants.
- Mitigate against vacancy risk. Forge a good relationship with your tenants. Treat them well and adhere to all their demands, when reasonable, to keep them happy.
- Choose the right tenants. A good-quality renter will be a stable source of rental income for you. To find one, you will need to have a good tenant screening process in place.
- Choose positive cash flow areas. If you choose to invest in an unpopular Charleston neighborhood, you’ll incur a high risk of vacancy and high tenant turnover. Thus, buy real estate properties in prime locations with nearby amenities like schools, shops and malls, and parks and recreations.
4. Consider Hiring a Professional Property Management Company
Are you hands-on? If not, then consider hiring a competent Charleston property management company. You can count on your property managers to collect rent, screen prospective tenants, and advertise your property for you, among other things.
In fact, if you hire a good one, he or she may be the only real estate professional you may need.
5. Charge the Right Rent Price
You want to make sure that the rent price is affordable and will attract tenants. One of the easiest ways of determining how much rent to charge is by conducting a comparative market analysis.
A good place to start is finding out what other landlords in the area are charging for similar rentals. You can also use Craigslist and Trulia for this purpose.
Evidently, Charleston, SC offers a great rental property investment opportunity. However, as with any other place, do your homework prior to investing.