If you’re thinking about investing in real estate in Charlotte, Matthews, Mint Hill, Indian Trail, or any of the surrounding areas in North Carolina, you’ll find that there’s a lot of opportunity. Investors from all over the world have taken an interest in our local market, and that’s because prices are relatively low. It’s easy to enter this market, especially compared to other east coast real estate markets like Atlanta, New York, or even anywhere in Florida.
Choose your market carefully when you invest. A market like the Charlotte area offers a great way to earn some recurring and consistent cash flow as well as long term returns.
Risks and rewards can be found in any real estate market, and Charlotte is no different. There are a lot of great reasons to buy real estate here, and we love working with investors to map out a strategy for profit and long term ROI.
Here’s a brief list of what’s rewarding about investing in Charlotte and what’s risky about it.
Let’s Look at the Rewards of Investing in Charlotte Real Estate
Let’s talk about some of the rewards of investing in Charlotte first. The main reward is this: you’re entering a strong rental market. Here’s what that means:
- There’s a strong local economy, which sets the stage for a strong rental market. Plenty of large companies have main offices in Charlotte, including Bank of America, Wells Fargo, Duke Energy, and Honeywell. Small businesses are thriving, too.
- Population is growing. An increase of nearly 3 percent between 2022 and 2023, and an increase of nearly 4 percent between 2021 and 2022.
- Most of the tenant pool is well-qualified. They’re hard workers, looking for a great home, and able to afford the rents that are here.
- Rents have risen in Charlotte and remain comfortably high. This can be a huge reward for investors, who are able to buy reasonably priced properties in our market and still earn consistent rental income as the average rents rise.
There’s a diversity to the tenant pool in Charlotte that creates a lot of opportunity for investors. Anywhere in Mecklenburg, Union, and Cabarrus County will provide you with a strong pool of tenants from which to find renters.
And Then, There are the Risks
There’s always a risk that you’re overpaying for an investment property. While home prices remain lower in and around Charlotte than elsewhere in the country, costs have risen dramatically in the last few years. And, financing an investment property purchase is not always easy. Interest rates have risen, and that means mortgages are more expensive. You may need to be creative in the way you finance your purchase.
There’s also a risk that you won’t make money as fast as you’d like to. If you want to make real money, plan to buy and hold your property for as long as possible. There is really no get-rich-quick strategy when it comes to residential real estate investments. There are investors who focus on buying and flipping properties, but with the costs of materials, labor, and services where they are right now, it’s not easy to make money this way.
Another risk that investors have to consider is that there’s a lot of talk about a new real estate recession coming. Will this actually happen? We don’t know. But, you might have to withstand market forces that include a plummeting home value. That’s going to hurt until the market steadies itself.
When a Risk Can Turn Into a Reward (and vice versa)
When it comes to an investment property, sometimes a risk can pose as a reward. Or, a benefit can actually be a challenge. Here’s what we mean.
- Home Values are a Risk and a Reward
Home values have risen dramatically in the last few years, and that’s a huge reward, especially if you’re ready to sell or you need to access that equity.
But, it also means that you’re facing a more expensive sales market if you decide to invest now. It’s been a pretty crazy market over the last year, with unusual spikes and strengths.
The reward for investors is this: when you’re willing to hold your investment property for the long term, you’ll find you own a property that’s worth significantly more than it was when you bought it. And, you’ll have enjoyed years of tenants paying down your mortgage and covering your property expenses.
There’s a risk that you may be paying more than you want to for a home in the current market. But, that investment will begin making you money immediately. That’s where smart investors find the reward.
- Working with Tenants in Charlotte, Harrisburg, Midland, and Surrounding Areas
Tenants are a risk when they’re unqualified and a reward when they do what you expect them to do.
Even well-screened tenants are going to be a bit risky. There will be wear and tear on your property. They might accidentally or intentionally cause damage. You could find that they don’t pay rent on time, as you expected. There might be a lot of drama, tenant conflicts, and disputes with neighbors to manage.
But, tenants can be a reward too. A good tenant who communicates openly, notifies you of maintenance needs when necessary, pays rent on time, and contributes to the care of your property will help you earn more on your property in the long run.
Work with Charlotte Property Managers
The best way to mitigate your risks and enjoy more rewards when you’re investing is to work with a local property management company. Your property manager will manage much of the risk that you take on as an investor, and we’ll also help you reap better rewards. This is obvious when you are able to reduce vacancy and turnover with professional management, hand over the management of tenant relationships, and relax knowing that a qualified expert is taking care of your investment.
If you’d like to take a deeper dive into the risks and rewards of investing, please contact us at Wess Cason Realty. We provide real estate and property management services in Charlotte and the surrounding areas in Mecklenburg, Union, and Cabarrus County.