Located in the Piedmont Plateau in south central North Carolina, Charlotte is the largest city in the state and the second largest in the southeastern US after Jacksonville, Florida. With a population of 872,500 people, it is the 16th most populous city in the US. The Charlotte metropolitan area’s population stands at nearly 2.6 million, making it the 23rd largest in the US.
The Charlotte real estate market benefits from the fact that the population growth rate for the city is twice the national growth rate thanks to a strong net migration. Additionally, a high percentage of the population consists of people under the age of 44, which helps boost economic activity in Charlotte. According to NeighborhoodScout, 46.9% of the city’s residents rent rather than buy their own homes, which is a good sign for Charlotte real estate investors since the tenant pool for rental properties is large.
The “Queen City” ranks among the best of the largest US cities for jobs, according to Forbes. It is in fact a major commerce center and the second largest banking center in the US after New York City. It is home to the corporate headquarters for the Bank of America, the nation’s second largest financial institution by total assets, and serves as the regional headquarters for the East Coast operations of Wells Fargo. In total, six Fortune 500 companies and 14 Fortune 1000 companies have their headquarters in the Charlotte region, ranging from foodstuff companies to manufacturing, retail and transportation companies, along with a wide range of other businesses.
The motorsports industry is a major driver of economic development in Charlotte, with dozens of racing teams from NASCAR, Nationwide, and Craftsman Truck series based in the city, as well as hundreds of companies supplying engineering technologies to the teams. Each year, millions of visitors from all over the country and the world are drawn to the city to attend racing events and visit the NASCAR Hall of Fame, among other tourist attractions. In 2017, the Charlotte region hosted approximately 28.3 million visitors.
Known as “The New Energy Capital”, Charlotte is a thriving center for energy-oriented industries, with more than 300 energy companies employing over 35,000 people in the Charlotte area. Charlotte is also a major distribution and transportation hub for the East Coast, owing to its proximity to a wide variety of markets, as well as an excellent interstate highway system, good railway access, and an inland port facility.
The Charlotte housing market was named the 9th most important U.S. Market to Watch by PWC in its annual Emerging Trends in Real Estate: United States and Canada 2019 report. The multiple economic sectors, along with the strong economic growth and huge job market make the city attractive to real estate investors.
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Real estate appreciation in the Charlotte real estate market is tangible as value has risen by 72.96% since Q1 of 2000, which is an average annual home appreciation rate of 2.89% according to NeighborhoodScout. Property value is still climbing in the Charlotte real estate market as Zillow reports an appreciation of 7.3% in 2018. This housing market trend is expected to continue, which makes Charlotte a seller’s market with large opportunities for long-term return on investment.
Nevertheless, Charlotte home prices remain relatively affordable compared to other top markets in the US. That’s why buying an investment property in Charlotte makes for a good real estate investment.
The Airbnb rentals business has been booming in Charlotte, as a result of the city’s position as a hot tourist destination. The Airbnb Charlotte market generated a total of $8.7 million in Airbnb revenue in 2017, accounting for nearly 9% of the state’s total Airbnb income.
Short-term rental rules in Charlotte are governed by the city’s Zoning Ordinance, which regulates most land uses. This means that the first thing Airbnb Charlotte investors need to do is check if their investment property is consistent with the city’s zoning requirements or use definitions. The City of Charlotte also requires everyone planning on operating a short-term rental within its jurisdiction to apply for a business license and pay a business license tax. A fire inspection is required as part of the approval process, and the Planning Department will review the application for compliance with the city’s building and housing standards. In addition to a state sales tax, a room occupancy tax applies to all short-term rentals, i.e. in the case when someone stays in a property for less than 90 days. The Airbnb platform collects and remits those taxes on behalf of its operators.