Charleston has seen a population boom in recent years, with many Americans moving to the area thanks to the low cost of living, hot job market, and beautiful coastal location. The city features such a rich culture and history that you’ll feel transported back in time in select areas.
Charleston was recently named the eighth-best small real estate market, and here are some trends we’re seeing that contribute to the high ranking. Charleston may be your best bet if you’re looking for your next investment property or vacation home, so don’t sleep on this coastal slice of history.
1. Increasing Sale Prices
Charleston homes are selling for more money than ever. According to Redfin, the area's sales price has increased nearly 10 percent since last year. Multiple bids can be placed on homes, and they typically sell at or slightly below the original asking price.
On average, it takes about 56 days for a home to go under contract, but in select areas, that time can be reduced to 36 days. The market is competitive and equally favorable to both sellers and buyers.
2. Variety of Property Types
The Charleston real estate market has much to offer potential residents and investors. From single-family homes to multi-family units and industrial complexes to retail storefronts, there is something for everyone in Charleston.
Many families with children can secure properties with yards big enough for their kids to play in. Younger professionals may prefer condos closer to downtown, where they don’t have to worry about property maintenance. You can even pay a premium to be on the water, purchase a historic home, or secure one of the state’s many plantations.
Unlike other real estate markets, Charleston offers many housing options you can only get within the Charleston metropolitan area. Homes that are put on the market sell quickly, and inventory has slightly increased year over year to meet the growing demand.
3. Opportunities for Funding
Unemployment rates in Charleston are below the national average. With such a hot job market, many potential buyers have good credit, putting them in the position of choosing between funding types. Which you will pick depends on what kind of property you are purchasing and what you want to do with it.
Conventional or FHA loans are great for buyers who want to use the property as their primary residence. In contrast, debt service coverage ratio loans in South Carolina may be better for investment properties. As long as you can prove a steady cash flow that covers your monthly mortgage payments, you shouldn’t have an issue securing a DSCR loan if your credit is good.
A financial professional can help you understand your best option based on your finances, your motivation in purchasing the property, and more.
4. Attractive to Renters and Landlords
The New York Times recently named Charleston among the best cities for renters. Compared with other large metropolitan areas, Charleston's economy is strong, the cost of living is lower, and the amenities are attractive to prospective renters.
The presence of universities and local military bases also signals a continued demand for temporary housing that isn’t going anywhere. For investors, that is a great sign. These trends indicate that your rental units won’t stay vacant on the market for long.
South Carolina also has laws in place that favor landlords, giving them more control over their property to help them protect their investments. Examples of these laws include a lack of rent control, eviction rights, and more. As long as landlords maintain their properties and address issues promptly, renting can be mutually beneficial for both parties.
5. Low Taxes
Property taxes in South Carolina are lower, at just 0.52 percent, compared to the national average of 0.99 percent. Additionally, there are no estate or inheritance taxes in South Carolina. Keep in mind that the properties may still be subject to federal taxes. However, you will pay significantly less when you do not have to pay state taxes, too.
Charleston's reduced tax environment makes it an attractive market for long-term investments. By passing your properties down from generation to generation, you can help create generational wealth, and competitive tax rates can help you get started.
Wrapping Up - Charleston Real Estate Investments
Investing in Charleston real estate can be a lucrative decision that yields passive income for generations to come. The city has a growing population, a hot job market, and increasing property demand from people of all ages, including young professionals, families, and retirees. And the best part is that the city shows no signs of slowing down.
Buyers looking for their forever home have plenty of options, while investors looking to turn a profit will see a good overall return. By investing in Charleston real estate, you can capture the southern charm of South Carolina and make money while doing it.
