Buying in Charleston, SC

[Joanne Whitlock]

Hey everyone - first time poster here and new to the site. I own property in the D.C. area (Alexandria, VA) that I'm renting out. I'm currently living in Charleston, SC and looking to buy property that I will potentially live in for the next year then turn around and rent out for passive income. I'd love advice on the current market and best areas to look into when it comes to renting it out for the future.

[Bill B.]

You’ll have to pick a different city for that story @David Ginn. I was renting out vegas SFR before during and after the GFC.

In June of 2006 the median home was still $300k. I was buying class b entry level properties for about $200k. I’m not saying your $150k properties didn’t exist, if they did they didn’t meet my criteria  

By March of 2009 the median house was half that, about $150k, I was buying class b entry level for about $100-110k. Same thing with your $50k properties, I’m sure they existed, they just weren’t 2000+ sf, 2 car garages, less than 5 years older, with stucco siding and tile roofs north and west of 15/95 interchange and that’s what I wanted  

In 2006 i was getting about $1100/mo on those $200k houses with 25% down and 4% loans the payments were about $725 + $30-40/mo for insurance and $100 give or take for property taxes. So they cash-flowed about $250/mo. 

BUT, and this is the point that everyone who tells this cautionary tale but didn't invest in Las Vegas SFR at the time makes up…

The properties I bought for $100k in 2008-2010 Were renting out for $1300/mo. Now they were cash-flowing $800/mo. with 25% down. Rents, at least in SFR increased and they increased massively during the GFC, (ok, maybe not massively but at least 10% every year for several years and they certainly did not drop.) I've always assumed it was caused by families that could maintain the illusion their life hadn't changed much as they still lived in a nice house they certainly weren't moving in to an apartment with kids some of these tenants stayed until last year and this year

I don’t know where this idea that rents cratered or that you could rent anything the average person would want to live info for half price. MAYBE class D apartments crashed, or people heard stories of a friend renting for $500 a month from someone who left town and wasn’t making payments and assumed that was normal. I do know people who didn’t make payments for years, and then only moved out because they had bought a new home. They still hadn’t been foreclosed on. so much for learning our lessons. 

Ps. Just so everyone knows how wise the both the common man and the Experts were. Both groups thought I was insane for buying fin 2009. "Properties dropped 50%, what if they drop another 50%…". To which I always said then I'll get to buy twice as many. I was risking a $25k downpayment to make more than $10k a year. Did they really think I could buy something for $12,500 that could make $10k/year? They couldn't build any new homes. Heck they couldn't build any new homes until prices AT LEAST doubled. These were 1-2 year old properties that had a payment under $500/mo PITI.

Pps. In case anyone cares. Same story with Vegas and Covid. Rents are up 10-20% since covid hit with 100% rent collection. 2 tenants moved out last year. Both properties filled in less than 2 weeks with large increases. I can't believe what we got for a new July 1st occupancy, almost 30% increase. And again, this is all class B SFR, I don't pretend to speak for MfR or higher or lower class units.