Investing in North Carolina

[Rohini Parab]

Hi Everyone. Hope all is well. I'm shifting my focus to Raliegh, NC to buy my next rental property. I want to buy and hold for 5+ years. But completely unaware of neighborhoods. Please help me understand where I should be buying before it turns out to be another Austin. So far I figured Cary, Morrisville, Durham, Chapel Hill, and Raleigh are better bets being closer to the Research triangle but prices are already looking higher. My focus is Growth areas that are likely to boom after more people start moving there as more Tech Companies get up and running in the Research triangle. Thanks in advance. God bless.

[Chris London]

@Rohini Parab Most of the cities you mention depending on how you assign cap-x, repairs, and vacancy you should be able to find turnkey properties off the MLS that leave you slightly cash flow positive each month and over the past year have I personally seen 20%+ property appreciation increases. With the high number of out-of-state people moving here for tech/pharma jobs rents have skyrocketed as well increasing as much as 20% YoY.

Cary/Apex: IMO the best cities for long-term appreciation with the strong development plans for their downtown areas. Many investors don't like these cities due to the higher prices of starter homes ($310K + for a 3/2 ranch house) but at $1800+ rent I think you'll find the best long-term buy-and-hold plays here.

Durham: no question South Durham is the ideal central location for residential neighborhood homes near RTP. Check out Central Durham if you are looking to flip something from the 1950s with deferred maintenance and downtown Durham if you want to transform something old into a trendy urban home.

Chapel Hill: Beautiful city and if you're moving here a must-see but you'll pay at least 1% more in property tax than the other cities and that can add up to at least $250 more per month in expense than you would be paying in any of the other cities and for this reason, I don't look here for investments.

Raleigh: NC State (34K students) if you are looking to get involved in student housing.

Holly Springs/ Fuquay Varina/ Knightdale/ Clayton/ Wake Forest: Some of the most popular cities on the outskirts of the Triangle to invest in. Prices are a little more affordable and with the building of new highways, there are big bets that rapid appreciation is to follow. Personally, I prefer to invest closer to the heart of the Triangle while the prices are still somewhat affordable and may eventually look out here in the future. An SFH in Cary/Apex is really only $25K or so more than an apples-to-apples home in some of these cities and with a 20% down payment that really only translates to another $5K downpayment.

For anyone that wants to learn more about the Triangle, I suggest signing up to get news from WRAL TechWire. Great daily information about the job market as well as occasional info about the housing market and how the two relate.