Charlotte Rental Properties: Should You Invest?

Charlotte is a fast-growing city. It has a thriving economy and booming tourism. Hence, investing in Charlotte rental properties is a good idea.

Table of Contents

North Carolina Housing Market 2021-2022
Charlotte Real Estate Market 2021-2022
Reasons to Invest in Charlotte NC
Best Neighborhoods for Traditional Rental in Charlotte
Best Neighborhoods for Airbnb Rental in Charlotte
Invest in Charlotte Rental Properties Through Mashvisor

Many real estate investors wonder if it’s good to invest in rental properties in Charlotte NC. Amid the pandemic, Charlotte made it as one of the top housing markets in the United States in 2021. Being the most populated city in North Carolina, Charlotte is also known as a major commercial hub.

Charlotte is one of the fastest-growing cities in the US. It offers several job opportunities and has a flourishing economy. It is strategically located and is close to other major cities on the East Coast. These are just a few reasons why Charlotte NC is considered an attractive place to live in. In addition to these, Charlotte has a thriving tourism industry, making this place an ideal location for vacation. It makes Charlotte an excellent place for both traditional and vacation rentals.

North Carolina Housing Market 2021-2022

Despite the uncertainty brought upon by the COVID-19 pandemic in the past two years, the North Carolina housing market remains strong. The average home value in North Carolina in November 2021 was around $280,000, up approximately 23% year-over-year. With limited inventory, increasing demand, and uptrend home prices, we can expect that North Carolina real estate will still be a hot market in 2022.

North Carolina, also known as “The Old North State” and “The Tar Heel State,” is an excellent location for real estate investors to own an investment property. It is because North Carolina’s population is growing steadily. The prosperous economy is fueled by diverse industries such as biotechnology, information technology, energy, finance, and other startups. It leads to steady job growth, which is the reason why many people find it appealing to move and live in North Carolina. The new residents are a good market for traditional rentals.

Moreover, with amenities like excellent public transportation, educational opportunities, and quality healthcare, real estate investors can find profitable investment opportunities in The Old North State. While investing in North Carolina is more likely to generate a return on investment, it’s essential to check and understand the real estate market analysis and data first before making any investment decision.

Here is the North Carolina real estate data from Mashvisor as of April 2022:

Number of Listings for Sale: 13,782
Median Property Price: $549,291
Average Price per Square Foot: $299
Days on Market: 103
Number of Traditional Listings: 19,268
Monthly Traditional Rental Income: $1,538
Traditional Cash on Cash Return (%): 1.76%
Traditional Cap Rate (%): 1.82%
Price to Rent Ratio: 30
Number of Airbnb Rental Listings: 23,275
Monthly Airbnb Rental Income: $3,067
Airbnb Cash on Cash Return: 3.76%
Airbnb Cap Rate: 3.86%
Airbnb Daily Rate: $171
Airbnb Occupancy Rate: 58
Walk Score: 45

Charlotte Real Estate Market 2021-2022

The housing supply in the Charlotte real estate market could not keep up with the rising buyer demand. In 2021, values for all for-sale homes, including condos, went up by $71 billion. In fact, Charlotte is one of the top real estate markets in the country. Charlotte’s diverse economy and quality of life make it attractive to movers from other states. It is one of the reasons why there is a high demand for Charlotte housing.

Based on Realtor.com data at the end of 2020, Charlotte NC ranked third among the hottest markets for 2021. The job market and population growth make Charlotte a preferred migration destination for businesses and people looking for job opportunities.

In 2021, Charlotte was seen as a seller’s market. In 2022, the trend is expected to continue. Home values will continue to rise as demand remains high and inventory remains low. According to Mashvisor’s data, as of April 2022, there are currently around 1,051 available properties for sale in Charlotte. Both homebuyers and real estate investors who are looking to buy Charlotte rental properties are competing to get a hold of the listings.

Here is an overview of the Charlotte real estate market data from Mashvisor, as of April 2022:

Number of Listings for Sale: 1,051
Median Property Price: $626,525
Average Price per Square Foot: $335
Days on Market: 84
Number of Traditional Listings: 2.796
Monthly Traditional Rental Income: $2,090
Traditional Cash on Cash Return (%): 1.74%
Traditional Cap Rate (%): 1.78%
Price to Rent Ratio: 25
Number of Airbnb Rental Listings: 2,118
Monthly Airbnb Rental Income: $2,606
Airbnb Cash on Cash Return: 1.86%
Airbnb Cap Rate: 1.91%
Airbnb Daily Rate: $148
Airbnb Occupancy Rate: 55
Walk Score: 36

Reasons to Invest in Charlotte NC

Many investors buy rental properties in Charlotte North Carolina because the city offers excellent opportunities for profitable investments. Charlotte is considered a job hub, which is why it sees a steady population growth. Moreover, it is home to several cool attractions.

Here are five reasons why you should buy an investment property in Charlotte, NC:

1. High price to rent ratio

According to the above real estate market data, the price to rent ratio in Charlotte is 25, which is considered high. A high price to rent ratio means buying a home is significantly more expensive than renting a property. It means residents who cannot find a home that they can afford to buy would rather rent instead, opening more business opportunities for investors who plan to buy traditional Charlotte rental properties.

2. Fast population growth

Charlotte is among the fastest-growing areas in the US, with a large number of new residents moving in. According to the Commercial Cafe blog, Charlotte sees an increase of around 20,000 in population per year. With new residents comes new demand for housing. Since inventory is low and home prices are high, most of the new residents will opt to rent, creating strong rental demand. That’s why it’s a wise decision to invest in Charlotte rental properties.

3. Strong job market

The strong job growth is another reason why it’s good to invest in rental properties Charlotte NC. Charlotte is ranked among the best cities to find employment based on its job availability, unemployment rate, and wage growth. With strong job growth, the demand for rentals will also increase.

4. Thriving tourism industry

Aside from traditional rentals, there is also a high demand for short term Charlotte rental properties. Investors also buy investment properties intended for vacation rentals because the city’s tourism industry is booming. It is home to gorgeous historical architecture and delectable cuisine. Charlotte is also a top destination for visitors who want to experience outdoor activities like whitewater rafting, mountain biking, and nature walking.

5. Busy business districts

With diverse industries headquartered in the city, Charlotte is considered a business hub. The short term rental market does not only cover holiday-goers. Some visitors come to the city for business-related reasons. It opens more opportunities for Airbnb rental business.

Are you ready to invest in Charlotte rental properties? Use Mashvisor’s investment property search tool to get started.

Charlotte Airbnb Rules and Regulations

It’s legal to operate an Airbnb property in Charlotte NC. Long-term and short-term rental properties in Charlotte City should be registered with the Charlotte-Mecklenburg Police Department if they meet certain disorder risk thresholds.

You also need to comply with the following:

Zoning: The Zoning Ordinance in Charlotte regulates land usage in the city. Make sure to review the zoning requirements and check if your property is compliant with the existing zoning regulations.
Business License: To operate a short-term rental in Charlotte, you need to obtain a business license. As part of the approval process, a fire inspection is required.
Room Occupancy Tax and Sales Tax: Rent for less than 90 days is subject to room occupancy tax. North Carolina will also assess sales tax on the gross receipts received from such rentals. The taxes apply to hotels, motels, corporate housing, and private owner rental properties in Charlotte NC.

Before investing in Charlotte rental properties for Airbnb, please take note of any other contracts or rules that you should abide by. The rules include leases, condo board, HOA rules, or tenant organization regulations. Make sure that you understand and comply with the said rules and regulations to avoid unnecessary problems in the future.

Best Neighborhoods for Traditional Rental in Charlotte

To ensure that your traditional Charlotte rental properties are profitable, it’s important to choose a good location. The best neighborhoods for traditional rentals are those that are close to where job opportunities are located. Also, consider locations that are near public transport and basic amenities and are generally safe and family-friendly.

According to Mashvisor’s data as of April 2022, here are the five best neighborhoods for traditional rentals based on traditional cash on cash return:

1. Optimist Park

- Number of Listings for Sale: 2
- Median Property Price: $312,000
- Average Price per Square Foot: $335
- Days on Market: 21
- Number of Traditional Listings: 14
- Monthly Traditional Rental Income: $2,053
- Traditional Cash on Cash Return (%): 5.05%
- Traditional Cap Rate (%): 5.20%
- Price to Rent Ratio: 13

2. Third Ward

- Number of Listings for Sale: 6
- Median Property Price: $504,133
- Average Price per Square Foot: $379
- Days on Market: 14
- Number of Traditional Listings: 41
- Monthly Traditional Rental Income: $3,062
- Traditional Cash on Cash Return (%): 4.26%
- Traditional Cap Rate (%): 4.33%
- Price to Rent Ratio: 14

3. Chantilly

- Number of Listings for Sale: 5
- Median Property Price: $851,800
- Average Price per Square Foot: $311
- Days on Market: 149
- Number of Traditional Listings: 12
- Monthly Traditional Rental Income: $4,774
- Traditional Cash on Cash Return (%): 3.79%
- Traditional Cap Rate (%): 3.83%
- Price to Rent Ratio: 15

4. Wesley Heights

- Number of Listings for Sale: 3
- Median Property Price: $633,000
- Average Price per Square Foot: $409
- Days on Market: 79
- Number of Traditional Listings: 21
- Monthly Traditional Rental Income: $2,824
- Traditional Cash on Cash Return (%): 3.19%
- Traditional Cap Rate (%): 3.24%
- Price to Rent Ratio: 19

5. Downtown Charlotte

- Number of Listings for Sale: 8
- Median Property Price: $648,125
- Average Price per Square Foot: $425
- Days on Market: 15
- Number of Traditional Listings: 44
- Monthly Traditional Rental Income: $2,767
- Traditional Cash on Cash Return (%): 1.96%
- Traditional Cap Rate (%): 1.99%
- Price to Rent Ratio: 20

Best Neighborhoods for Airbnb Rental in Charlotte

The best place to buy rental property for the Airbnb business is the one that is close to most tourist attractions, with a good walk score, and is near public transport and basic amenities. It’s also essential to consider the safety of the location, the demand for short term rentals, and the occupancy rate.

According to Mashvisor’s 2022 data, here are the best neighborhoods for short-term Charlotte rental properties based on Airbnb cap rate:

1. Elizabeth

- Number of Listings for Sale: 4
- Median Property Price: $690,000
- Average Price per Square Foot: $376
- Days on Market: 66
- Number of Airbnb Rental Listings: 237
- Monthly Airbnb Rental Income: $3,565
- Airbnb Cash on Cash Return: 2.75%
- Airbnb Cap Rate: 2.80%
- Airbnb Daily Rate: $126
- Airbnb Occupancy Rate: 59
- Walk Score: 79

2. McCrorey Heights

- Number of Listings for Sale: 1
- Median Property Price: $635,000
- Average Price per Square Foot: $236
- Days on Market: 176
- Number of Airbnb Rental Listings: 249
- Monthly Airbnb Rental Income: $3,575
- Airbnb Cash on Cash Return: 2.77%
- Airbnb Cap Rate: 2.80%
- Airbnb Daily Rate: $119
- Airbnb Occupancy Rate: 65
- Walk Score: 29

3. Villa Heights

- Number of Listings for Sale: 10
- Median Property Price: $690,590
- Average Price per Square Foot: $341
- Days on Market: 50
- Number of Airbnb Rental Listings: 215
- Monthly Airbnb Rental Income: $3,708
- Airbnb Cash on Cash Return: 2.54%
- Airbnb Cap Rate: 2.57%
- Airbnb Daily Rate: $121
- Airbnb Occupancy Rate: 60
- Walk Score: 50

4. Commonwealth

- Number of Listings for Sale: 4
- Median Property Price: $689,500
- Average Price per Square Foot: $340
- Days on Market: 45
- Number of Airbnb Rental Listings: 243
- Monthly Airbnb Rental Income: $4,058
- Airbnb Cash on Cash Return: 2.42%
- Airbnb Cap Rate: 2.45%
- Airbnb Daily Rate: $152
- Airbnb Occupancy Rate: 45
- Walk Score: 65

5. Belmont

- Number of Listings for Sale: 5
- Median Property Price: $1,103,600
- Average Price per Square Foot: $311
- Days on Market: 82
- Number of Airbnb Rental Listings: 354
- Monthly Airbnb Rental Income: $3,820
- Airbnb Cash on Cash Return: 2.41%
- Airbnb Cap Rate: 2.43%
- Airbnb Daily Rate: $120
- Airbnb Occupancy Rate: 63
- Walk Score: 44

Invest in Charlotte Rental Properties Through Mashvisor

You can start searching for the best Charlotte rental properties through Mashvisor’s database. Use our investment property search tool to find a property based on your preferred neighborhood. Mashvisor will provide you with a list of all the available properties for sale in your chosen area.

Find a Profitable Rental Property

After you click the property you’re interested in, you will get an overview of the real estate market data and analysis for the property listing. The information includes the property details, neighborhood comps, cash on cash return, cap rate, occupancy rate, etc. You can also calculate your potential income using the rental property calculator to determine if such property is worth your time and money. In addition, Mashvisor will help you find the best rental strategy for a specific listing.

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Should You Invest in Charlotte Rental Properties in 2022?