When you are in the process of buying an investment property in a competitive market like Charleston, South Carolina, you are bound to consider every aspect that can make your investment profitable. While doing market research, you could come across the question, “Is it the right time to invest in property?”
Like any other business, there is a right time to buy an investment property, which depends on several factors. Top among them depend on your financial readiness, your time and effort, and the Charleston rental market.
Your Financial Readiness
Your financial readiness can help you determine if it is the right time to invest in property. Here are some of the apparent and hidden expenses that you need to consider.
These are the expenses you bear at the time of buying a property like the transfer taxes and government fees, down payment, closing costs, prepaid and escrow payments. Even when it is a buyer’s market, you must be financially ready to meet the criteria for an eligible buyer and cover the upfront costs. Hence, you should be pre-approved by a mortgage lender before you begin the homebuying process.
If you have a high budget, you can buy a property in the costliest Charleston neighborhood like South of Broad, where the median listing price is $2 million. However, if you have a moderate budget, you can start looking through neighborhoods like Ardmore-Sherwood Forest, where the median listing price is $305,000.
If you buy a fixer-upper home, you will have to bear the high costs of essential fixes and renovations to get the home rent-ready.
As a landlord, you will have to pay up for renovations, maintenance, advertisements, tenant screening, property management fees, and taxes. You might also have to bear costly vacancies and tenant turnover costs.
Evaluate all these expenses thoroughly and compare them to your budget. If you have the financial strength to afford these costs now, it is the right time for you to buy an investment property.
Are You Ready to Become a Charleston Landlord?
Rental investment is a business, and it could require a lot of your time and energy. As a landlord, you will have to:
- Comply with the landlord-tenant laws and fair housing laws, among other state and federal laws
- Keep the house habitable
- Respond to tenants’ maintenance requests
- Screen and place qualified tenants
Assessing your willingness and availability to carry out all these tasks will help you identify if it is the right time to invest in property. If you have time to dedicate to growing a rental business, it is a good time for you to invest.
Ups And Downs of the Charleston Real Estate Market
The local market trends keep changing. You need to evaluate the trends well to know if they are suitable for your current financial situation.
Some aspects of the Charleston local market can increase the time required to buy your desired property. For instance, one downside of the local market is the constant imbalance between the demand and supply of houses. It has been a seller’s market since 2006, as new construction hasn’t developed at an expected pace.
However, residential property values in Charleston have increased by more than 54% in the last five years. The overall demand and growth from residential properties are also higher than commercial properties. The reports suggest that the Charleston housing market will remain in the top ten housing markets for the next 5-10 years. So, if you wish to invest in a residential rental, now can be a good time.
When your goals and priorities align with your financial stability and the market conditions, it is the right time for you to buy an investment property. If you have questions about investing in rental property, get help from an expert Charleston property management company like Meridian Residential Group. We have seen the ups and downs of Charleston real estate for over 20 years and can help you understand the rental market trends thoroughly.
Meridian Residential Group provides both single-family and multi-family property management in the Charleston, SC, area, including in North Charleston, Summerville, Goose Creek, and Moncks Corner, among other cities.
For more information, contact us at Meridian Residential Group.