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Investment Property Charleston SC | Income Producing Real Estate

CHARLESTON SC INVESTMENT PROPERTIES & INCOME PRODUCING REAL ESTATE

For investors in Charleston SC the real estate game is a tricky one. We all made thousands and — probably millions if you add it all up — flipping houses, leasing offices and renovating condos. Then the real estate market collapsed, throwing the U.S. into the 2007-2009 recession.

Now the prognosis for real estate investments is looking much better, though it’s anything but simple. Some commercial real estate has rebounded, with investors craving income that real estate provides, while Low-country residential Charleston real estate — particularly single-family homes — may be at once-in-a-lifetime bargain prices.

Four top experts were asked for their take on the the opportunities and potential pitfalls facing real estate investors in the coming years. Edited excerpts of their interviews follow:

Jim Sullivan, managing director of REIT research, Green Street Advisors

Every diversified investor should have some exposure to commercial real estate, and REITs [real estate investment trusts] provide a terrific, transparent and liquid way to get that exposure. Operating fundamentals in most property types range from good to great, with good being the shopping center business and industrial business and great being the apartment business. The economy is not doing great, but the silver lining for commercial real estate is how little new supply is coming on the market. Too much new commercial construction is typically what puts a halt to real estate recoveries. This time around, it’s just not an issue.

Multi-Family Income Properties

 

REITs tend to be specialized by property type. You can pick and choose, depending on what your economic outlook might be. If your forecast is a little rosier, you’d want to be in property types that respond well in economic recoveries — hotels, for example, or REITs that own shopping centers with lots of small tenants. If you wanted to be a bit more defensive, health care REITs are a terrific place to be. When investing in Charleston real estate the safe bet would obviously be in tourism based avenues considering that is the most consistent driver of revenue.

The biggest opportunity is buying distressed single-family homes, because that market has been completely beat up. The next biggest opportunity is buying land because very few people have been focused on it. If you have a long-term view, you’ll probably see a significant multiple return. Buying land is a complicated business, though. Mom-and-pop investors should not be buying land.

Lauren Pressman, director of investment research at wealth management firm Aspiriant

The U.S. is in a period of sustained but very slow growth. Job reports are huge factors for real estate, because jobs create demand for housing, for offices, for travel and at retail establishments. We’re wary of things like retail and office, except in very unique circumstances. Multifamily real estate (apartment buildings) arguably had all the tail winds at its back to do the best of all asset classes. However, be careful. There is so much capital chasing multifamily, and that can lift prices beyond a point where your return is commensurate with risk.

No matter what your strategy is always be careful and have a good local agent to help you navigate through the maze of options out there for investing in real estate in Charleston or anywhere. Find a great contractor in Charleston and let them help you with the renovations, and repair necessary to get a C.O. and move onto the next real estate opportunity.

VACATION RENTALS

One of the long tried and true income producing real estate investments popular in Charleston area is in beachfront homes or resort vacation rentals. It’s no mystery that homes in beach communities are very attractive year round and hundreds of thousands of visitors come to our beaches in S.C. to unwind. Homes for sale on the Isle of Palms and in Wild Dunes real estate make big money on weekly vacation rentals for their owners. Many developers and investors will even buy an existing home, tear it down and build a new one just for the returns it can produce. Weekly rentals on Folly Beach, Kiawah, Seabrook Island, and even downtown Charleston garner upwards of $4000 to $7000+. Even with HOA Dues in Wild Dunes, Kiawah Island, and Seabrook Island + monthly regimes for condos/villas these properties can get easily $30,000 yr for one bedroom to $90k+ for beachfront and 3 bedroom units. 

There has never been a better time to pull money out of the equities market and into real estate, rates are low, and prices are too.

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Number of Available Homes For Sale Begin To Keep Up with Demand

As one would expect sellers are testing the waters again as word of price increases gets out. Here in Charleston, South Carolina we are seeing the same trend in housing. The supply of newly listed homes for sale is starting to show signs of keeping pace with buyer activity in some of the nation’s hottest real estate markets, new data suggest.One agent interviewed stated about a new townhouse development in Mount Pleasant, SC: “we are all sold  out before construction even begun. The only one we have available won’t be finished until October, we sold everyone before we even broke ground.”
Charleston SC Home Prices Increasing with Supply

Charleston SC Home Prices Increasing with Supply

According to many Charleston, SC real estate agents; word of multiple offers are becoming the norm and as soon as houses come on the market offers are coming in almost immediately.  In 21 of 24 major metropolitan markets tracked by residential brokerage ZipRealty, new listings outnumbered new sales contracts for the 30 days ended March 15.Other cities seeing the same situation included Phoenix — where January home prices were up 23% year-over-year, Standard & Poor’s Case-Shiller data shows — the San Francisco Bay Area, Denver and Houston. San Francisco home prices followed Phoenix’s gain with an almost 18% pop in January year-over-year. Supply may “finally start to keep pace with frenzied buyer activity,” says Lanny Baker, ZipRealty CEO.In seven of the cities analyzed by ZipRealty, more than one-fourth of the homes listed for sale sold in less than seven days. The Charleston, SC housing market is no different. Charleston, SC real estate broker stated: “one of my buyer clients put in an offer with three others the same day a house came on the market and we had to come in over list price to beat the competition and secure the winning contract.”As existing homes sit longer inventories will inevitably increase as sellers who have been waiting begin to put out feelers and “test the market”.
Info Gathered  from USAToday

Charleston Real Estate Market Trends and Activity

CHARLESTON, SC—(October 10, 2012) According to preliminary data released today by the Charleston Trident Association of REALTORS® (CTAR) 876 homes sold in September, surpassing last September’s mark by more than 100 sales. Pricing in the Charleston area has made positive gains throughout the year, with September’s closings resulting in a median sale price of $190,000.Real Estate in Charleston SCThe year-to-date and inventory figures show the Charleston market’s continued progression back to a healthy, balanced and sustainable market. Year-to-date, MLS data shows a 10.5% increase in sales and a 5.6% increase in median price for the region. In 2012, 7,879 homes have sold at a median price of $190,000. At this point last year, 7,125 homes had sold at a median price of $179,850.While it is common for inventory to decline heading into the fall and winter months, it is significant that tri-county inventory has dropped below the 6,000 benchmark, with 5,878 homes listed as actively for sale with the Charleston Trident Multiple Listing Service (MLS). MLS data shows 6.7 months of residential inventory—most experts consider 5-6 months a mark of a healthy and balanced market. Charleston SC home builders also report seasonal declines in contracts to build new homes during the winter months.“The available inventory is pushing our market not only towards balance, but slowly back towards the seller’s favor. We’ve been squarely in ‘buyer’s market’ territory for several years now. The market has made its corrections and we’re well-positioned for sustainable positive progress going forward,” said Herb Koger, 2012 President of the Charleston Trident Association of REALTORS®.Average days on market has declined significantly as well, with all three counties reporting 100 days or less to sale, and Charleston County averaging a speedy 87 days in September. The faster pace of buying activity is being encouraged by a significant number of investor buyers in the Charleston market, who deal largely in cash, negating the wait time for lender approval.August Adjustment Preliminary data reported for August 2012 indicated 1,014 homes sold at a median price of $198,757.  Adjusted numbers now show 1,025 sales at a median price of $199,900.Berkeley County Preliminary data shows 197 homes sold at a median price of $175,000 in Berkeley County in September; with an average of 92 days on market.  Year-to-date, sales volume has increased about 1% and prices have grown by 6% compared to last year, with 1,689 sales in the county at a median price of $164,300.Find additional reports on Berkeley County, hereCharleston County, SC Preliminary housing data shows 502 residential transactions in Charleston County in September, at a median price of $216,768.  Days on market dropped to a year-low of 87 days. Year-to-date, sales have increased 17% and pricing has made a healthy 2% gain over 2011 data.  Thus far in 2012, 4,494 homes have sold at a median price of $225,000 in Charleston County.Find additional reports on Charleston County, hereDorchester County Preliminary data shows that 153 homes sold at a median price of $175,000 in September in Dorchester County, in an average of 100 days on market.  Year-to-date, sales volume has grown by 3% and prices have increased by nearly 4%, county-wide, compared to last year.  In 2012, 1,428 homes have sold at a median price of $167,222.
Article By CTAR

Housing Market Still Little Iffy…

Story By USA Today

The National Association of Realtors says sales of previously occupied homes fell 5.4% in June from May, to a seasonally adjusted annual rate of 4.37 million homes. That’s the lowest rate since October.“It is only one month and the rest of the housing indicators have all continued to show improvement,” saidJennifer Lee, senior economist at BMO Capital Markets. “Let’s hope this June decline is a blip.”Where as  here in CHARLESTON, SC—(July 10, 2012) Home sales in the Charleston region maintained their consistent and steady pattern in June, with continued growth in sales volume and ongoing stability in pricing. 1,033 homes sold at a median price of $200,000 in June according to preliminary data released today by the Charleston Trident Association of REALTORS® (CTAR). Last month, adjusted figures show 1,002 homes sold at the same median price.National real estate sales are up 4.5% from a year ago, evidence that the market is recovering. But the annual sales pace is well below the 6 million that economists consider healthy.First-time buyers, critical to a housing recovery, made up just 32% of sales. That’s down from 34% in May. In healthy markets, first-time buyers make up more than 40% of the market.The national median existing-home price for all housing types was $189,400 in June, up 7.9% from a year ago, according to the NAR.Here in Charleston SC – Inventory declined again, with 6,277 homes listed as actively for sale in the Charleston Trident Multiple Listing Service (CTMLS) as of July 10, 2012.