10 High Cap Rate Cities in the North Carolina Housing Market

If you’re going to invest in the North Carolina housing market, do it the smart way. This means knowing what to look for in order to find the best places to invest in real estate. Value and return on investment are what to look for. And one of the best measures of this in real estate investing is the cap rate. So let’s take a look at North Carolina and its high cap rate cities.

North Carolina Real Estate Market

Using Mashvisor’s investment property calculator, we’ve got all the data you need to make a smart real estate investment in the North Carolina housing market. Let’s first give you the state-wide data so you have a general idea of rental property performance in North Carolina.

Median Property Price: $318,366
Price per Square Foot: $151
Price to Rent Ratio: 20
Days on Market: 76
Monthly Traditional Rental Income: $1,300
Traditional Cap Rate: 2%
Monthly Airbnb Rental Income: $2,280
Airbnb Cap Rate: 4%
Airbnb Occupancy Rate: 51%

So the North Carolina housing market is looking pretty good with these numbers. Keep in mind that this is the average performance across multiple cities in the state. Real estate investing is a local industry; so to really get a grasp on the actual performance and profitability of investment property in North Carolina, you need to look at city-level and even neighborhood-level data.

That’s exactly why we’ve used our cap rate calculator to narrow the North Carolina housing market down to the best cities in which you can find high cap rate properties for sale.

But before we get into that, you might have noticed that we listed data for both traditional rentals and Airbnb rentals in the North Carolina housing market. That’s because these are two different rental strategies which perform differently in each market. It’s important for real estate investors to have this type of data on hand to make smart investment decisions. A city which might be full of profitable long-term rentals, might not be as successful with short-term or vacation rentals. And whenever you’re planning on buying a property to list on Airbnb, it’s important to check with your state/county/city regulations beforehand.

Airbnb In North Carolina

It seems the only cities with bans and strict regulations on short term rentals in North Carolina are Asheville and Raleigh. The latter having more recently introduced a serious discussion about new Airbnb regulations in December of 2018. However, there are plenty of other high cap rate cities for Airbnb rentals in North Carolina which don’t come with a long list of rules.

Cap Rates by City- Airbnb Rentals in the North Carolina Housing Market

We’ve divided our list of the best cities in North Carolina based on rental strategy. This first half will include high cap rate cities for investors interested in the Airbnb rental strategy.

All data is provided by Mashvisor’s cap rate calculator.

Jonesville- Yadkin County

Median Property Price: $147,060
Monthly Airbnb Rental Income: $1,792
Airbnb Cap Rate: 11%

Bridgeton- Craven County

Median Property Price: $198,546
Monthly Airbnb Rental Income: $3,553
Airbnb Cap Rate: 10%

Cherokee- Swain County

Median Property Price: $70,000
Monthly Airbnb Rental Income: $1,459
Airbnb Cap Rate: 9%

Carova- Richmond County

Median Property Price: $367,580
Monthly Airbnb Rental Income: $4,512
Airbnb Cap Rate: 9%

Fletcher- Henderson County

Median Property Price: $304,223
Monthly Airbnb Rental Income: $3,943
Airbnb Cap Rate: 9%

If you’re looking for real estate data like this for specific neighborhoods or properties, start out your 14-day free trial with Mashvisor now.

Cap Rates by City- Traditional Rentals in the North Carolina Housing Market

This second half is for those of you following the traditional rental strategy. These cities will be your best shot at finding profitable North Carolina houses for sale for your next investment.

All data is provided by Mashvisor’s cap rate calculator.

Delco- Columbus County

Median Property Price: $79,000
Monthly Traditional Rental Income: $1,230
Traditional Cap Rate: 8%

Garland- Sampson County

Median Property Price: $89,900
Monthly Traditional Rental Income: $1,240
Traditional Cap Rate: 7%

Hollister- Halifax County

Median Property Price: $102,966
Monthly Traditional Rental Income: $1,100
Traditional Cap Rate: 7%

Littleton- Halifax County

Median Property Price: $159,117
Monthly Traditional Rental Income: $1,329
Traditional Cap Rate: 7%

Enfield- Halifax County

Median Property Price: $229,980
Monthly Traditional Rental Income: $1,195
Traditional Cap Rate: 7%

So there you have it. Now you know where to start your search for high cap rate investment properties in the North Carolina housing market. But how should you start searching? By using Mashvisor’s Property Finder Tool! Just sign up for a free account to find an investment property in a matter of minutes.

Now you know where you can find high cap rate properties in the North Carolina housing market, but why is the cap rate important?

Cap Rate in Real Estate Investing

The cap rate (short for capitalization rate) is the rate of return on an investment based on the amount of income it’s expected to generate. It’s a very important factor in determining the value of income-producing properties. Because income levels are included in the calculation, the cap rate is one of the best metrics to use when making investment decisions.

It is also a great way to compare similar properties since all expenses are also taken into account. Different cap rates for seemingly identical properties could be because one generates higher income or has lower expenses.

So there are two main uses for cap rates in real estate investing. Investors can either use it when selling properties; by using market cap rates for other recently sold comparable properties (real estate comps), you can value the property you plan to sell. Or when buying properties, cap rates can be used to determine whether the asking price of your prospective investments are reasonable.

Although this post was mainly focused on cap rates in the North Carolina housing market, before making any investments, you should know cap rates mustn’t be the only deciding factor. There are many other important factors involved in property valuation and property analysis. To make sure you’re really investing in a profitable property, couple the cap rate with other important metrics and measures.

To start looking for and analyzing the best investment properties using all the necessary metrics, click here.

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