Charlotte Housing Market 2021: A Good Investment?

The coronavirus pandemic hasn’t taken as devastating a toll on the Charlotte housing market as some other cities in the US. Though COVID-19 temporarily plummeted the NC housing market as a whole as well as the Charlotte real estate market, Realtor.com’s Housing Market Recovery Index indicates that the Charlotte-Concord-Gastonia metro area has been back on track since July. Not only has the market managed to recover from the pandemic, but it is actually one of the best places to invest in real estate in 2021.

Interested in the Charlotte housing market? In this article, we’ve broken down what makes a Charlotte real estate investment a wise choice for investors in 2021. 

Charlotte Housing Market Statistics 2020

Before looking at the reasons why you should invest in Charlotte real estate in 2021, let’s check out some 2020 statistics. The data below comes from Mashvisor’s real estate investment software:

• Median Property Price: $435,448
• Price per Square Foot: $219
• For Sale Listings: 1,708
• Price to Rent Ratio: 23
• Monthly Traditional Rental Income: $1,561
• Traditional Cash on Cash Return: 2.4%
• Average Airbnb Daily Rate: $134
• Monthly Airbnb Rental Income: $2,180
• Airbnb Cash on Cash Return: 2.4%
• Airbnb Occupancy Rate: 54%

As you can see, Charlotte real estate investors are currently enjoying good returns and monthly cash flow, whether they own a traditional or Airbnb Charlotte investment property. And since the market is managing to do well during the pandemic, it’s no wonder that we can expect 2021 to also be a good year. Let’s dive deeper into this forecast.

Charlotte Housing Market Forecast 2021

Traditional Investment Properties Will Be Profitable

As mentioned, traditional rental properties are currently performing well. And the Charlotte housing market was named one of the top 5 best places to invest in real estate in 2021 in the “Emerging Trends in Real Estate” report, sponsored by the PwC and Urban Land Institute. The report ranks Charlotte as 4th for strong investor demand. This indicates that traditional investments will continue to be profitable in 2021.

The multifamily market in Charlotte is where many experts recommend you turn your attention to in 2021. The PwC report claims that 56% of analysts urge investors to invest in a Charlotte multifamily home, while 36% of analysts recommend that those already invested in multifamily homes in the Charlotte housing market hold onto their investments. 

Construction Projects Will Be Profitable

For real estate investors who dream of purchasing raw land and building new properties, the Charlotte housing market is one to watch. The “Emerging Trends in Real Estate” report ranked Charlotte #11 for homebuilding prospects and #2 for development opportunities. The report also ranks Charlotte #5 for the availability of debt and equity capital, an important consideration for investors who need to raise funds for construction projects.

Charlotte has been labeled as an “18-hour city,” meaning that it is known for its diverse lifestyle, a mix of a big city and suburban feel, and an influx of workers from other cities. All of these factors make it a hot market for new construction and real estate development, as there will continue to be a demand for housing.

Airbnb Laws Are Favorable for Real Estate Investors

Charlotte is a highly Airbnb friendly city with only a few minor Airbnb regulations. 

The Charlotte Police Department keeps a registry for traditional rentals and vacation homes. While it is not required that all landlords register, certain properties must be registered if they meet the criteria for “disorder risk.” Additionally, Charlotte requires all business owners to apply for a business license, which is mandatory for both Airbnb landlords and traditional landlords.

The county of Mecklenburg imposes a room occupancy tax for rentals that are less than 90 days in duration, and North Carolina collects sales tax on short term rental properties. If you are using the Airbnb platform to list your rental, Airbnb will collect and remit these taxes automatically.

Related: Is Airbnb a Good Investment Considering All of the Regulations?

The Best Neighborhoods in Charlotte for Buying an Airbnb Property

The following neighborhoods are those where Airbnb Charlotte investors are enjoying high cash on cash return right now and will likely continue to generate high returns in 2021, thus making these areas the best places to invest in Airbnb.

#1. Sugaw Creek-Ritch Ave

• Median Property Price: $256,950
• Price per Square Foot: $183
• Average Airbnb Daily Rate: $167
• Monthly Airbnb Rental Income: $3,757
• Airbnb Cash on Cash Return: 7.8%
• Airbnb Occupancy Rate: 62%

#2. Hidden Valley

• Median Property Price: $192,500
• Price per Square Foot: $141
• Average Airbnb Daily Rate: $158
• Monthly Airbnb Rental Income: $2,334
• Airbnb Cash on Cash Return: 7.5%
• Airbnb Occupancy Rate: 60%

#3. Idlewild Farms

• Median Property Price: $129,900
• Price per Square Foot: $104
• Average Airbnb Daily Rate: $115
• Monthly Airbnb Rental Income: $1,987
• Airbnb Cash on Cash Return: 7.2%
• Airbnb Occupancy Rate: 64%

#4. East Forest

• Median Property Price: $217,389
• Price per Square Foot: $133
• Average Airbnb Daily Rate: $200
• Monthly Airbnb Rental Income: $2,404
• Airbnb Cash on Cash Return: 7.2%
• Airbnb Occupancy Rate: 59%

#5. Stonehaven

• Median Property Price: $376,000
• Price per Square Foot: $191
• Average Airbnb Daily Rate: $230
• Monthly Airbnb Rental Income: $3,746
• Airbnb Cash on Cash Return: 6.9%
• Airbnb Occupancy Rate: 59%

The Renter Population Will Increase 

The “Emerging Trends in Real Estate” report notes that the Charlotte housing market is one of the six “boomtowns” in the US, which are attracting workers from other cities. These markets, including Charlotte, have already begun a strong job recovery and continue bringing in new workers, particularly young people in their twenties and thirties.   

According to Mashvisor’s data, the price to rent ratio in Charlotte is 23, indicating that it will be far more affordable for this influx of young professionals to rent than buy. This is great news for real estate investors, who will not have to worry about low occupancy rates in the Charlotte housing market.

Related: The Best Real Estate Markets to Invest in the US for Price to Rent Ratio

Home Values Will Increase

Currently, the median home price in Charlotte is $435,448, with a cost per square foot of $219. While the Charlotte housing market is not the most affordable market, it is not the most expensive either. This sweet spot in home values makes the Charlotte housing market an excellent investment for 2021 as it is still fairly affordable. Likewise, home values will continue to rise, giving investors the opportunity to build equity through steady real estate appreciation. 

Charlotte has enjoyed real estate appreciation this year, during the pandemic. Over the past year, Charlotte home prices have gone up by 9.7%. For 2021, home values in the Charlotte housing market are expected to increase by 8.5%.

Landlords Will Spend Less on Repairs Than Average

According to Neighborhood Scout, 77.7% of homes in Charlotte were built in 1970-2020, with 30.3% built in 2000-2020. This is good news for investors, as homes will need little repair and maintenance to stay in good rental condition. 

While certain cities are notorious for their old, charming homes, these types of investments can be costly to landlords. Due to the recent surge in construction and youth of the majority of homes, Charlotte rental properties should be easy to maintain and cost real estate investors less money in 2021.

The Best Neighborhoods in Charlotte for Buying a Traditional Property

#1. Lakewood

• Median Property Price: $142,250
• Price per Square Foot: $147
• Price to Rent Ratio: 11
• Monthly Traditional Rental Income: $1,056
• Traditional Cash on Cash Return: 4.7%

#2. Hidden Valley

• Median Property Price: $192,500
• Price per Square Foot: $141
• Price to Rent Ratio: 14
• Monthly Traditional Rental Income: $1,123
• Traditional Cash on Cash Return: 4.4%

#3. Idlewild Farms

• Median Property Price: $129,900
• Price per Square Foot: $104
• Price to Rent Ratio: 10
• Monthly Traditional Rental Income: $1,130
• Traditional Cash on Cash Return: 4.4%

#4. Slater Rd-Hamilton Circle

• Median Property Price: $183,200
• Price per Square Foot: $140
• Price to Rent Ratio: 14
• Monthly Traditional Rental Income: $1,085
• Traditional Cash on Cash Return: 4.1%

#5. North Lake

• Median Property Price: $220,887
• Price per Square Foot: $131
• Price to Rent Ratio: 13
• Monthly Traditional Rental Income: $1,387
• Traditional Cash on Cash Return: 4.0%

Related: How to Calculate Cash on Cash Return Quickly (And Accurately)

The Takeaway

2021 is a great time to invest in Charlotte real estate: The Charlotte housing market 2021 will be one of the best places to invest due to its strong real estate appreciation, hot job market, steady increase in population, and ample renter population.

Want to cash in on a Charlotte investment property? The Charlotte housing market will be a hot market, but before you jump in, make sure you have the right real estate investment tools for conducting real estate investment analysis. Mashvisor’s real estate investment software can help you start looking for and analyzing the best investment properties in Charlotte, NC. To start searching for Charlotte homes for sale, click here.