When you’re making a real estate investment in Charlotte, NC, you need to consider what your goals are. Some investors are interested in immediate cash flow and others want an appreciation in value. It’s good to pursue a mix of both those objectives. Your best investment opportunity will create cash flow and provide price appreciation.
Choosing the Right Price Range
You will have a very hard time earning cash flow on a property that costs more than $200,000. The rent ratio makes cash flow difficult, and if you look for a home in a lower price range, you’ll be able to earn more on rent and better manage your mortgage payment. Remember that you aren’t looking for rental income that simply covers what you owe; you want to earn enough to cover the entire value. Consider what your cash flow would look like if you sold your property and used the cash to buy a few homes.
Turnover and Rental Price
Turnover will be higher on lower priced properties. High turnover leads to more expenses for you. Look for a property that rents for between $1,000 and $1,500 per month. In this price range, you have a better chance of finding good tenants who will stay in the home longer.
Investing in the Right Neighborhood
Location is important, and if you can buy in a neighborhood with more owner-occupants, you’ll have a more successful investment. These are stable areas where tenants will stay longer, and you’ll have fewer evictions. Look in areas about five miles from Uptown Charlotte. Some of the more desirable neighborhoods right now are NoDa, Revolution Park, and Clanton Park. Plaza-Midwood and Shamrock are also excellent places to invest. You can find homes for less than $100,000. Mooresville is a community near Lake Norman, north of Charlotte. The properties come with higher price tags, but there is a lot of potential for appreciation and you’ll have an easy time attracting tenants.
Competing with Other Investors
New construction and large homes are being purchased by hedge funds and other established investors. Most of the foreclosed properties have also been purchased, but if you find one in a good neighborhood, it will likely make a good investment. You can also look in communities north of Charlotte, such as Davidson, Huntersville, and Cornelius. Uptown Charlotte has opportunities for condos and high rise buildings.
Diversify your investment portfolio, and make strategic decisions that will move you towards your financial goals. If you need help, contact Alarca Property Management.