Charlotte Real Estate Investing 2021: Trends, Opportunities & Properties for Sale

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At RealWealth we’ve recently started recommending the Charlotte, North Carolina housing market to our 53,000 members. We currently work with two rental property teams in the area, one that offers new construction properties and another that sells REAL Income Properties™, which can be a much safer investment than typical “turnkey” properties. 

In this article, we’ll discuss why we believe the Charlotte metropolitan area is a good place for real estate investing in 2021. We’ll also share insights from Charlotte property teams on the ground about what’s happening due to COVID, as well as Charlotte real estate market predictions for the coming year.

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Why We Recommend Charlotte for Real Estate Investing in 2021

RealWealth Investment Counselors are recommending Charlotte for all types of investors, but especially those that are looking for appreciation

This real estate market has a strong growth trajectory, rapid population growth, affordability, and there’s a lack of housing supply, which we believe will continue to drive up demand for rental properties. 

In some neighborhoods, there are also strong opportunities for cash flow. Check out the sample property below to get a better understanding. First, let’s discuss 10 major factors that are driving Charlotte’s strong housing market.

10 Factors That Make Charlotte a Strong Housing Market

1 - Massive Population Growth

The Charlotte metro population is growing more than twice as fast as the national average (181% faster to be exact). The area has experienced a 17% increase in population over the last 10 years and is the largest metro in the state. 

Charlotte is also ranked #5 in places Millennials are moving to most (Smartasset.com). In fact, more than 150 people are moving to the area daily. All of this population growth, particularly among younger demographics, will be great for future rental demand. This is the first indicator that Charlotte has a strong real estate market.

2 - Affordable Real Estate Investments

The average single-family home in the Charlotte metro area is approximately $270,000, which is slightly above the national average. In the last six years, homes around Charlotte have appreciated 36% faster than homes nationwide. Home values and rents should see an increase over the next few years.

This shows us that, while homes are slightly more expensive, there is a great opportunity for investors interested in equity growth. 

In the areas where RealWealth members invest, there are slightly higher rents compared to the Charlotte average. These new construction rental homes are located in good A and B-class neighborhoods. We see stronger appreciation in these areas where there’s a good mix of homeowners and rental homes. It also gives investors the opportunity to secure more favorable financing terms because they are investing in neighborhoods with more homeowners than renters. There’s a strong pride of ownership in these areas, along with good schools and low crime rates. Currently, there’s about a 1.2 month housing supply in the Charlotte area.

Infographic Highlighting - Factors That Make Charlotte a Strong Real Estate Market

3 - Strong Demand For Rental Housing

Almost half of residents in Charlotte rent. Inventory of homes for sale remains extremely low. As a result, potential buyers are encountering multiple bids on properties, which is causing prices to go up.

These higher home values may price out the large and growing demographic of Millennials in the Charlotte area, forcing them to rent. There may also be those who are not ready to buy. because they’re worried about the stability of their jobs and the overall job market with COVID-19. 

There is also a large student population in the Charlotte metro. Higher educational institutions in the area include: Johnson & Wales University (13,000 students), University of North Carolina, Charlotte (30,000+ students), Queens University of Charlotte (1,733 students), Davidson College (1,950 students) and more. With a substantial student population of mostly renters, demand for affordable rental housing in Charlotte is strong.

Additionally, tenants living in downtown apartments in crowded cities seem to be looking for more space. This is driving demand for single-family rental homes.

4 - Landlord Friendly

North Carolina as a whole is considered to be a very landlord-friendly state. The laws for landlords and tenants apply at both a state and local level. Local laws can be more comprehensive than state laws, so landlords typically need to be familiar with both. Fortunately, landlord-tenant laws in Charlotte are the same as state laws.

Charlotte landlord-tenant laws include: 

  • No security deposit required, but it is highly recommended
  • The landlord must return the security deposit to the tenant within 30 days, unless otherwise specified. I.e. deposits are held throughout the lease term and potentially used to pay for damage, unpaid rents, etc. 
  • A rental agreement is only required for tenants staying longer than 12 months. (Investor Tip: It’s always a good idea to have a rental agreement because it protects landlords from a legal standpoint.)
  • Tenants must be at least 18 years of age
  • Landlords have no legal obligation to charge late fees for rent
  • If a landlord charges late fees, they must not exceed a certain amount or percentage specified by North Carolina state landlord laws ($15 or 5% of monthly rent). 
  • Tenants have a five day grace period to pay rent until late fees kick in 
  • There is no notice of entry laws for landlords to enter the property. (…Not great news for tenants)  
  • There is no rent control or limit on how much a landlord can charge in North Carolina.  
  • Landlords may evict a tenant if they: 1) fail to pay rent (10 day Notice to Quit, eviction may be file on day 11); 2) remain on the property after the lease ends and without landlord permission (notice depends on the length of the lease, i.e. month-to-month gets seven days notice; year-to-year gets one month’s notice); 3) lease violations (no minimum notice period required); 4) drug trafficking & other criminal activity (no notice required). 

Owning a rental property in a landlord-friendly location can make it much easier for investors.

5 - Low Property Taxes

Property taxes in North Carolina are low compared to the rest of the United States. The average tax rate is 0.77%, which is significantly below the national average of 1.07%. Keep in mind that property tax rates vary between counties and may be higher depending on where a property is located.

6 - Downtown Redevelopment

The greater Charlotte metropolitan area has a number of redevelopment programs. Building and developing inner-city business districts can benefit the health of the economy, community and bolster the surrounding residential neighborhoods. This downtown redevelopment creates jobs and provides goods and services to residents and visitors alike. 

Charlotte’s corridor redevelopment projects are centered around improving and building high-quality transportation systems. Transit Oriented Development (TOD) is a redevelopment program whose goal is to create walkable communities, easy access to public transit with a combination of office, retail and residential buildings. 

There are opportunities to obtain local government grants for real estate developers, property owners and small businesses investing within these urban areas of redevelopment.

7 - Great Place To Live

One of the reasons for Charlotte’s growing population is that it’s a great place to live. While Charlotte is the largest city in North Carolina, it still maintains its old-fashioned feel and southern charm. With so many transplants moving to the city, Charlotte has become a diverse melting pot. 

The climate is mild but has four distinct seasons. In surrounding areas, there are a plethora of mountains with scenic trails for hiking and biking. The closest ocean beach is about a three and a half hour drive from Charlotte. But one of the best beaches nearby is located on Lake Norman. 

There are a number of professional sports teams in Charlotte. The city has a lively downtown nightlife scene, incredible restaurants, music and coffee. Fun fact: most of the major Nascar teams are headquartered in the Charlotte area.

According to U.S. News, Charlotte is ranked #6 in best places to live and #23 in the best places to retire. The cost-of-living is also very affordable, especially compared to Florida and New York. All good signs for future housing demand.

8 - Lots of Companies Moving Here

As of this year, there are six Fortune 500 companies in or around Charlotte with a number of companies headquartered here, including Lowe’s and Bank of America. Something to note is that Lowe’s requires all of its lenders to have a local presence in the Charlotte market. While this initiative doesn’t create jobs, it does put money back into Charlotte’s local economy.  

The Charlotte metro area is the second largest banking center in the country (behind New York City), with financial giants like Wells Fargo, Brighthouse Financial and Bank of America headquartered in the area. It’s also home to two of the largest healthcare providers in the United States, Atrium Health & Novant Health. There are also many jobs in both tech and energy. For example, Duke Energy is a huge electrical power holding company in the Charlotte area.

Known as one of the most-educated metros in the U.S., nearly 44% of Charlotte’s adult population has earned at least a bachelor’s degree–compared to an average of 22% in communities nationwide. 

As you can see, the diverse job market in Charlotte is stable and growing. With more jobs coming back to the local economy and new jobs being created, this metropolitan area should continue to see substantial population growth.

9 - Low Cost-of-Living

Charlotte’s cost of living is slightly less than the national average. Overall cost-of-living is based on eight categories: grocery, health, housing, median home cost, utilities, transportation, and miscellaneous. In all eight categories, Charlotte came in below national averages. 

In suburbs just outside of Charlotte, the price of homes and cost of living are even more appealing. And with the rising population of remote workers, a further commute time won’t play a factor in where you want and/or can afford to live.

10 - Impressive & Expanding Infrastructure

As mentioned in #6 above, downtown Charlotte has been undergoing massive redevelopment. One of the main initiatives being an expansion and creation of a world-class transportation system (known as Transit Oriented Development or TOD).  

As Charlotte’s population continues to soar, the infrastructure has grown in order to meet the demand. TOD aims to create a network of roadways and public transit systems, connecting downtown Charlotte with its surrounding communities. Making for an easier, more efficient and affordable commute.

Don’t forget Charlotte’s bustling airport. The Charlotte-Douglas International Airport has the sixth most flights passing through every year in the U.S. Whether traveling by car, bus, train or plane, getting in, out and around Charlotte is more accessible than ever.

Charlotte Housing Market Predictions for 2021 - What Makes Charlotte a Good Market Beyond 2021?

In this section, we’ll highlight Charlotte’s housing market predictions for 2021. Once again, there are three key indicators that signify a strong real estate market: population growth, job growth and affordable housing. 

In 2021, Charlotte’s metropolitan population should keep growing at a rapid pace, the job market will remain strong and home values will continue rising–but still remain relatively affordable. 

Here are Charlotte’s housing market predictions and trends for 2021 and beyond.

Charlotte’s Population Will Keep Growing Rapidly

Charlotte is now the 22nd-largest metro in the country. Over the next 10 years, Charlotte’s population is projected to reach nearly three million by 2030. Although the overall population of North Carolina has been slowly declining over the last several years, both Charlotte and Raleigh have been growing exponentially. With a younger demographic, the number of births far outweighs deaths, which is also contributing to this huge population growth.

Charlotte’s population should continue its rapid growth moving forward, especially because it’s affordable and a great place to live. This is one key factor that makes Charlotte a good real estate market to invest in.

Charlotte’s Job Market Will Remain Strong

When something drastic happens, like a global pandemic, economies that aren’t diversified usually suffer the most. Because of the diversity of Charlotte’s economy, job losses from COVID-19 haven’t been as severe as most other places. In a typical year, unemployment rates are low and jobs are available across a number of sectors. Charlotte has a good mix of workers in management, sales, and office and administrative support. Both blue- and while- collar jobs are abundant.

Looking to the years ahead, Charlotte’s total GDP will continue to grow as more companies move to the area. Charlotte’s job market is another reason it’s a good real estate market.

Charlotte Home Values Will Continue Rising

Housing inventory in the Charlotte area is very low, causing high demand and resulting in an increasingly competitive real estate market. The factors have been and will continue to push home values up. However, the Charlotte metro is still very affordable compared to other cities of similar sizes. 

As discussed in #2 above, average home values in the Charlotte metro are around $270,000, which is slightly above the national average. Although median home prices are a bit higher, it’s been good for investors in these markets because they’ve appreciated quickly over the past decade. And in certain neighborhoods, median rent for a new construction, single-family home is above the Charlotte average.

Charlotte Housing Market COVID-19 Update

Compared to most cities around the country, Charlotte’s job market is stronger and more resilient. The Coronavirus pandemic resulted in major job losses around the country, and Charlotte was no exception. However, it fared better than the majority of metros across the U.S. and is recovering somewhat quickly.   

At the end of 2020, there were 40,000+ job openings in the Charlotte area. More people are relocating to the area due to higher job availability. And since the onset of COVID-19, a lot of people are moving away from the inner, bigger cities and out to the suburbs. Also known as, “The Rise of the Remote Workers”. With fewer people physically tied to their jobs, this migration away from large, crowded cities should continue moving forward.

The housing shortage continues in Charlotte along with many major cities around the nation. With a lack of available inventory in the area, demand continues to soar. Not to mention, the cost of lumber has shot up over the last year. In order to control rising costs, many home builders are switching to steel. Our team in Charlotte now uses steel rather than lumber for home construction, which has helped maintain a solid ROI for RealWealth members investing in the area.

Top Charlotte Neighborhoods for Real Estate Investing 2021

Next, we’ll list the top Charlotte neighborhoods for real estate investing in 2021 and what each of these sub-markets has to offer.

Highest Appreciating Charlotte Neighborhoods Since 2000

Image Highlighting Highest Appreciating Charlotte Neighborhoods Since 2000
Snapshot courtesy of neighborhoodscout.com

Uptown Charlotte Area (For Appreciation)

Neighborhoods in the Uptown Charlotte area have appreciated significantly over the last several years. All of these communities are located just miles from downtown Charlotte and are considered highly attractive places to live due to their proximity to jobs and entertainment. The best neighborhoods in Charlotte for appreciation include:

  • Elizabeth
  • NoDa
  • Clanton Park
  • Plaza Midwood
  • Renaissance Park
  • Revolution Park
  • University City

Steele Creek Area (Fastest Growing)

Steele Creek is one of the fastest growing neighborhoods in Charlotte/Mecklenburg County. This area sits along the Catawba River, which feeds into Lake Wylie. The Steele Creek area attracts buyers and renters alike due to its proximity to a lake, airport and downtown Charlotte.

Charlotte Sample Investment Property Pro Forma

Here’s an example of an investment property sold by a property team we work with. As you can see, it’s possible to generate just under $15,000 a year in cash flow from one Charlotte new construction property, if you pay in cash, or around $3,500 if you finance.

3 beds · 2 baths · 1,316 sqft · Single Family Rental

Image Highlighting Charlotte Sample Investment Property Pro Forma

To view more sample properties, you can join the network by clicking the link in the section below.

Ready To Invest in Charlotte Rental Properties?

At RealWealth we connect investors with property teams in the Charlotte metro area. Currently the teams we work with offer the following rental investments:

(1) Single Family

(2) New Construction

If you’d like to view Sample Property Pro Formas, connect with one of the teams we work with in Charlotte, or speak with one of our Investment Counselors about this or other markets, become a member of RealWealth for free. Click here to get started.

Also, when you connect with one of the Charlotte teams we work with and/or with one of our Investment Counselors, make sure to ask about Charlotte investments that meet our REAL Income Property™ Standards.

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