Troy Gandee, REALTOR®

Market Overview

The Charleston market has experienced a surge of industry in the last few years. We are known to be a very labor-friendly state and that has attracted major manufacturers like Boeing, Volvo, Mercedes and others to enter our market. This has caused a surge of laborers and wages to flood our market. Many buy, but many seek out rental properties as some of them are longer term contractors. In addition to this, Charleston has been a Top 5 City in the World amongst various publications in the last couple of years. The quality of life here is quite high and that encourages droves of transplants to move to the area. We also have nearly a dozen colleges and other higher education organizations in the area, which bolsters student housing. Because of all of these factors, our inventory has been quite thin, but the rental market and sale market has been explosive. Finding great deals has proven to be more challenging than it once was, but because we're in the South, our median home prices are still reasonable and SC is a very landlord-friendly state.

INVESTMENT PRICE POINTS IN CHARLESTON

Entry Level:
Single Family: $75,000
There are many single families that can be purchased between 50-100k and will generally realized 9-10% cap rates. These properties often require more management and experience high turnover, but the cash flow is usually the highest.

Multifamily: $150,000
Investors can also find multifamilies in the entry level price points. Again, these also require more management and experience higher turnover, but the returns are quite strong.

Mid Level:
Single Family: $200,000
For an out of state landlord, this median price point tends to be a better investment. Most of the properties will still achieve an 8-9% cap rate, but they require far less management.

Multifamily: $300,000
There is a larger number of 2-4 unit properties in this price point. They will often experience a 10% cap rate depending on expenses. The location and condition of multifamilies in this price point can vary greatly. Multifamilies in this price range are typically still B-/C+ properties.

Upper Level:
Single Family: $350,000
Because our market is being flooded with transplants, available rentals are at a premium. In markets like Mount Pleasant and Downtown Charleston, SC, tenants are often paying around $2,500 for rentals in this upper level range. The cash flow is a bit lower, but management tends to be much easier in these properties.

Multifamily: $500,000
The Charleston area has a surplus of higher learning institutions, which make for great student rental markets. Most of these institutions are in more desirable neighborhoods and part of the City. Because of this, market values are quite high, but these units can rent for very aggressive numbers. There are many available multifamily properties available in the downtown area near campuses and the city center. While these are expensive and the taxes are quite high, they rent for impressive amounts. Student rentals often require more turnover, but the higher learning institutions usually bring better tenants.