HomeUnion, an online real estate investment management firm, has announced that Charlotte placed in the top 10 of single-family rental markets when ranked by overall cap rates. Cap rates are the relationship between an investment property’s net operating income (rent minus expenses) and the sale price of the property. Furthermore, with employment levels outperforming the nation, and a strong financial services sector, Charlotte continues to maintain favorable conditions for investors.
“Charlotte is an ideal market for first-time single-family rental investors,” explains Steve Hovland, director of research at HomeUnion.
“Investors are drawn to the market because properties achieve average cap rates above 7 percent, while the median sale price is $134,000, which often appeals to new investors. Cash buyers also have an above-average presence in this market, with nearly 70 percent of single-family rentals bought last year using all cash.”
Here are some key takeaways on Charlotte’s investment housing market:
- Single-family rental (SFR) vacancy in Charlotte is expected to increase by 70 basis points to 8.1 percent
- Rents for Charlotte SFRs are anticipated to grow to $1,239 per month, up 3.8 percent from 2016
- Prices for investment homes in Charlotte ended 3Q 2016 at $134,000, with about 77 percent of investors choosing to use leverage