Real Estate investors from all around the country are making their way to North Carolina to establish rental property portfolios. The Tar Heel State has become a popular choice among real estate investors due to several compelling reasons. These factors encompass a robust economy, reasonable property prices, and consistent rental yields! At Easy Street Capital, we take pride in being a prominent source of loans for rental properties, catering to real estate investors interested in developing rental portfolios in North Carolina!
Types of Loans for Investment Properties
When it comes to real estate investing in North Carolina, there are many markets and types of investment property loans to choose from. For investors that like to get their hands dirty, rehabbing run-down properties, hard money renovation loans are a perfect choice! These loans allow you to buy a property quickly and finance your rehab costs as well! Once you are done, you can either “flip” the property for a quick profit or pursue the BRRRR Strategy by renting it out and then refinancing into a long-term, low-rate DSCR loan!
Long-term DSCR Loans are also great for investing in turnkey rental properties. Turnkey refers to properties that are rent-ready and require no renovations. Move-in ready single-family homes and fully furnished short term rentals are great for cash flow and price appreciation. Most DSCR Loans are fixed rates for thirty years, locking you into a fixed interest rate for the long-term. While, if historical patterns continue, rents and appreciation increase steadily each year. Bottom line, debt costs stay the same while cash flow increases!
Real estate investors in North Carolina appreciate the market’s advantageous feature of no prepayment penalties, allowing them the freedom to refinance without any financial constraints. Although some lenders may adjust interest rates slightly higher to accommodate this flexibility, the ability to refinance presents a significant advantage for investors seeking greater financial freedom.
Where To Invest In Real Estate In North Carolina
North Carolina boasts a diverse array of enticing real estate investment opportunities across its vibrant cities. Among these, Charlotte stands out as a bustling metropolis, offering a multifaceted economy and a continuously expanding population that captivates investors. Along the coast, Wilmington beckons with its coastal charm and strategic location. Salvo, with its serene coastal beauty, presents a unique investment prospect.
In the heart of the state, Raleigh shines as the capital, boasting a thriving population and economic landscape. Fayetteville holds its own as a dynamic city with military influence and growth potential. Greensboro, a hub of activity, offers a mix of urban amenities and suburban tranquility. On the Crystal Coast, Emerald Isle’s allure draws both tourists and investors. Lastly, nestled in the mountains, Asheville’s charm and cultural richness provide a distinctive investment opportunity in North Carolina.
Charlotte
Charlotte, situated in the heart of North Carolina, boasts a population of nearly 900,000 residents. Anchored by a thriving economy driven by sectors like finance, technology, and healthcare, Charlotte offers a robust job market and rental stability. The city hosts prominent Fortune 500 companies like Bank of America, Duke Energy, and Lowe’s, drawing a skilled workforce seeking rental accommodations.
Being a significant cultural and economic center, Charlotte captures the attention of visitors globally. Its acclaimed landmarks like the Levine Center for the Arts, Discovery Place Science, and diverse culinary offerings contribute to its allure as a sought-after tourist spot. These elements contribute to a thriving market for short-term rentals, particularly in the Downtown, Uptown, and NoDa (North Davidson) areas.
This city made Norada Real Estate Invesments’ list of best places to invest in 2024. Investors in Charlotte can capitalize on the city’s steady rental market and quickly growing population. Over the past 20 years, Charlotte’s population has grown roughly 60% according to census data! Rents and sale prices have risen accordingly, but are still relatively affordable in comparison to other major metro areas. According to Zillow, the average market rent in April of 2024 in Charlotte is $1,935 per month, offering favorable returns on investment. Additionally, the average sale price of a single-family home, according to Redfin, is $399,995. Business-friendly and affordable, Charlotte is an attractive market for real estate investors.
Charlotte presents a variety of attractions, such as the Daniel Stowe Botanical Garden, Bechtler Museum of Modern Art, and a plethora of professional sports teams. Natural havens like Freedom Park and entertainment venues like the Spectrum Center contribute to the vibrant demand for a dynamic short-term rental (STR) market.
Wilmington
Wilmington, situated along the coast of North Carolina, thrives as a city with a population exceeding 120,000 residents. This coastal gem is renowned for its unique blend of historic charm and modern amenities. The city boasts a diverse economy, supported by industries like tourism, healthcare, education, and marine sciences. Key employers in Wilmington include New Hanover Regional Medical Center and the University of North Carolina Wilmington. Wilmington’s proximity to the Wilmington International Airport adds to its allure for real estate investors. Serving as a regional gateway, the airport attracts travelers seeking convenient access and accommodations.
The University of North Carolina Wilmington in Wilmington energizes the city and presents real estate investors with exciting prospects. Investors focusing on student housing can discover promising avenues by catering to the city’s vibrant and diverse student community.
This steadily growing city presents a favorable opportunity for investors to take advantage of capitalize on a growing market. Per Neighborhood Scout’s report (updated Q4 2023), average market rent in Wilmington is $2,270 and the median home value is roughly $438,444. Although both of these figures are above both the state and national averages, investors can justify this to some degree given the rate at which properties in this city are appreciating. According to Redfin, the median sale price of a single-family home went from $280,000 in February 2021 to $403,170 in February 2024. That’s more than a 43% jump in sale price in less than 5 years! Given the city’s trends of growth and availability of economic opportunities, it is quite affordable.
Salvo
This picturesque coastal town on Hatteras Island embraces a close-knit community. Salvo is a census-designated place in Dare County and is a key part of North Carolina’s Outer Banks region. With its tranquil beauty and relaxed atmosphere, Salvo provides an inviting backdrop for residents and visitors alike. The town’s charm is complemented by its fishing heritage and stunning beaches, making it a haven for those seeking a serene coastal lifestyle.
Rich fishing heritage, serene beaches, and local hospitality make it a coastal haven. The Cape Hatteras National Seashore, Pamlico Sound, and Kinnakeet Lifesaving Station add historic and natural landmarks. Amid this scenic canvas, short-term rentals flourish, particularly in the heart of the town and by the inviting shores. AirDNA gave this market an impressive score of 80/100. Shockingly high occupancy rates (71%) and average projected monthly revenues ($5,400) mean that experienced STR operators could expect relatively consistent cashflows year round. According to Zillow, the average home value is currently $684,487 as of April 2024.
Amid Salvo’s coastal allure, burgeoning popularity, and captivating landmarks, it offers a promising prospect for short term rental investors.
Raleigh
Raleigh, nestled in the heart of North Carolina, is a dynamic city with its own unique charm. Renowned for its connection to flight pioneers, the Wright Brothers, Raleigh’s aviation heritage remains influential. The city’s numerous universities infuse a youthful vitality, enriching the cultural and artistic landscape. Exploring history becomes an experience with attractions such as the North Carolina Museum of History and the North Carolina Museum of Natural Sciences.
In addition to its cultural attractions, Raleigh is home to a booming population and a strong, stable economy. The city’s population has grown about 22% in the last 10 years. Major employers such as Cisco Systems, IBM, and North Carolina State University attract a talented workforce in need of housing accommodation.
Investors can find success operating both long-term and short-term rentals in Raleigh. According to Zillow, the median market rent as of April 2024 is $1,850. Although perhaps not traditionally thought of as a prominent STR hub, properties operated as short-term rentals in Raleigh tend to do quite well, all things considered. AirDNA gives this market a grade of 76/100. The biggest factors contributing to this rating is a relatively high seasonality of demand (89/100) and solid projected monthly revenue ($2,500).
Additionally, Raleigh presents an excellent opportunity for investors specializing in medium-term rentals. Although it isn’t home to Fort Liberty like the next city, there are still a number of military-adjacent employers here. As a result, there is a relatively consistent pool of military personnel in need of temporary accommodation.
Fayetteville
Fayetteville, positioned as a prominent city in North Carolina, features a population of approximately 210,000 residents. This vibrant urban center, known for its military heritage and cultural diversity, offers a range of compelling real estate investment opportunities.
As an appealing spot for tourists and business visitors, Fayetteville draws individuals from various locations. The city’s notable events, like the Dogwood Festival and Fayetteville Comic Con, contribute to a thriving market for short-term rentals. Moreover, Fayetteville boasts picturesque outdoor areas for nature enthusiasts, such as Cape Fear River Trail and Veterans Park. The diverse range of attractions contributing to the city’s success in short-term rentals can be seen particularly in areas like Haymount, Downtown, and Cross Creek. Beyond festivities and landmarks, Fayetteville is celebrated for its rich military history and local dining experiences. Fayetteville’s emergence as a key hub for military and defense activities, hosting installations like Fort Liberty and Pope Field, attracts a consistent flow of servicemembers, veterans, and defense professionals. As such, this market poses plenty of promising opportunities for medium-term rental investors.
Likely due to the affordability of real estate relative to other markets in the state, Fayetteville is a highly competitive market. The median sale price of a single-family home was $215,000 in February 2024, according to Redfin. This is up 3.1% year-over-year! Per Zillow, the median market rent in this city is $1,300 as of April 2024. Fayetteville is a fast growing city with affordable properties and a solid market rent that is still below the national average. Investors looking to enter this market have the opportunity to capture significant appreciation in their investments if these upwards trends continue in Fayetteville.
Greensboro
Greensboro, situated in the heart of North Carolina, flourishes as a city with a population exceeding 300,000 residents. The city boasts a varied and resilient economy with significant contributions from sectors like education, healthcare, manufacturing, and finance. It houses prominent employers such as Cone Health, Honda Aircraft Company, and Guilford County Schools.
Greensboro offers a wealth of cultural experiences, showcasing its vibrant history and diverse arts scene. The city’s distinctive landmarks draw numerous visitors each year. Notable attractions encompass the Greensboro Science Center, the International Civil Rights Center & Museum, and the Weatherspoon Art Museum. Furthermore, Greensboro hosts an array of festivals celebrating its multicultural tapestry and rich heritage.
Real estate investors in Greensboro have experienced favorable returns on their investments. According to data from Redfin, the median sales price in Greensboro has shown steady appreciation over time. For instance, the median sale price for a single-family home in February last year was $225,000, and by February 2024, it had increased to $265,000, representing a notable 17.8% year-over-year appreciation.
Emerald Isle
Emerald Isle, nestled along the coast of North Carolina, is a captivating blend of coastal allure and serene beauty. Renowned for its pristine beaches, maritime charm, and seaside architecture, Emerald Isle provides a distinctive retreat for visitors. The town’s rich history is evident at sites like the Emerald Isle History Museum and the Bogue Inlet Fishing Pier. The Bogue Sound draws attention with its peaceful ambiance, water activities, and breathtaking views. Nature lovers can indulge in activities such as kayaking, bird-watching, and exploring the maritime forests of Emerald Isle Woods Park. The real estate market in this coastal haven continues to mirror its unique and captivating essence, offering a diverse range of opportunities for residents and investors alike.
Emerald Isle’s average home value of $716,523 as of April 2024 (Zillow) highlights the overall stability and desirability of the city’s real estate market.
One of Emerald Isle’s most significant strengths is its thriving tourism industry. According to a study published the Town of Emerald Isle, there are around 3,900 permanent residents, but during peak season, the town welcomes more than 50,000 visitors per week. AirDNA gave this town a rental demand score of 78/100. The typical property operated as an STR in Emerald Isle is projected to generate $4,600 per month in revenue. Even though this is a well-established STR market, there are still plenty of opportunities available for investors. Despite Emerald Isle being roughly 90% built-out, there are still more than 600 vacant lots available within city limits!
Asheville
Asheville, nestled amidst the breathtaking Blue Ridge Mountains, enchants visitors with its scenic mountain vistas and abundant natural splendor. The city’s majestic peaks and vibrant fall foliage provide a serene backdrop for residents and visitors to find tranquility. Asheville offers a myriad of outdoor pursuits, such as hiking, mountain biking, and exploring the Great Smoky Mountains National Park. With an array of charming cabins and vacation getaways, Asheville presents an enticing prospect for real estate investors seeking to tap into the thriving short-term rental market.
Asheville garners an impressive Market Score of 87/100 as recognized by AirDNA. This signifies the city’s immense potential for real estate investors seeking lucrative opportunities. By investing in properties in Asheville, investors have the potential to generate a substantial average annual revenue of $44,800. This signifies the potential for vacation rental investors to achieve favorable returns on their investments, given the city’s popularity and consistent inflow of tourists.
In addition to the strong STR market present in this city, there are also plenty of opportunities for investors to invest in cash flowing long-term properties. As of April 2024, the average home value in Asheville was $462,515 and median market rent was $1,990. With many diverse demand drivers, Asheville stands as a strong investor opportunity for both long-term and short-term investments.
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Ready to invest in real estate in North Carolina? Easy Street Capital is top lender for rental loans in North Carolina, both hard money rehabs and long-term or short-term rental properties.
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