Are you looking to invest in residential real estate in a hot market? Are you unsure of what to look for when buying investment property in Charlotte, NC? If so, you're in the right place! That's exactly what we're covering in this comprehensive guide to identifying the highest quality investment properties.
5 Keys to Buying Investment Property in Charlotte, NC
One of the most important factors to consider when buying investment property in Charlotte, NC is the schools. Even if you're not renting to parents, there is a chance that your renters are considering the possibility of having children in the future. They will be pleased to know that some of the elementary and middle schools in Charlotte are among the best in the state.
The closer your investment property is to high-ranking elementary and middle schools, the more likely you will be to find quality tenants quickly. Parents want to be able to walk their kids to school or drop them off quickly in the morning. People considering parenthood in the future want to ensure that they won't have to move in the future to ensure their child gets a quality education.
Another incredibly important factor to consider when purchasing a Charlotte investment property is how close the property is to shopping. Many people living in large cities prioritize walkability because parking can be such a challenge. Fortunately, Charlotte is the 49th most walkable large city in the country: but some neighborhoods are more walkable than others.
It's a good idea to look closely at Fourth Ward, for instance. Properties in this neighborhood are very close to several retailers. This neighborhood is also far more walkable than other neighborhoods.
3. Average Rents
It is also very important for you to consider the average rent price in the neighborhood you want to buy an investment property in. Take a minute to calculate the monthly cost of homeowners insurance, the mortgage on the property, property taxes, HOA fees, projected maintenance and repairs, and any utilities you will be paying for. Then, subtract the total monthly cost of owning the home from the rent price you think the market can bear.
Keep in mind that you may need to pay 2% to 6% of the home's value in maintenance and repairs every year. However, you won't have to pay for repairs every month. When you get your rent money, consider putting your amortized maintenance costs into a separate savings account. This way, you don't have to worry about how you will be able to afford the repairs when they come up.
A Word of Advice
If you're looking to start profiting off of residential real estate investments, North Carolina is a great state to purchase an investment property in. The state does not cap the amount you can increase rent. Therefore, if the property taxes or homeowners insurance for the property increase, you can pass that cost on to your tenant and keep your profit.
However, you should be aware that you cannot increase the rent during the lease term. In other words, if your tenant signed a one-year lease, they are locked into the rent amount until the lease expires. If you rent your property out on a month-to-month basis, you must give your tenant at least a seven-day notice of any increase to the rent.
Looking at vacancies in neighborhoods is also important. The more vacancies there are in the area, the less likely you will be to attract tenants and earn a decent profit. The longer homes sit empty, the lower the rent needs to be to attract people to the home. On the other hand, if there are very few vacancies in a desirable neighborhood, you can charge a lot more for rent.
It is also a good idea to look for a neighborhood with plenty of nearby dining options. Again, Fourth Ward is a great choice, because there are plenty of places to eat and drink in the neighborhood. After all, nobody wants to spend an hour sitting in traffic and finding a parking spot just to get dinner after a long day or week of work. If you invest in a property in the Fourth, Third, or First Ward, your tenants can walk to dinner or a park easily and safely.
There are many factors you must consider when searching for high-quality investment properties. It is important that you put yourself in the shoes of people looking to rent homes and zero in on a neighborhood with many benefits to renters. Among the most important factors to consider are nearby schools, stores, and restaurants. Once you find your ideal investment property, call us at Better Path at 704-802-1097 for purchasing help.