Asheville or Charlotte suburbs: where to invest for AirBNB?

Question

I don't have a lot of money but can reno kitchens & bathrooms myself.  What are the advantages / disadvantage of Charlotte / Asheville markets?  I am choosing one soon!

Christian Longacre · Answer

Hi @Colin C Barrett!

First, if you don't have a lot of money but can reno kitchens and bathrooms, why not focus on house hacking?  That should be the biggest and safest bang for your buck.

I like @Mitch Davidson's points about some of the differences between Asheville and Charlotte, and about using AirDNA or PriceLabs to guide your research.  Both Asheville and Charlotte have grown a lot in recent years, and I think both will continue to grow ... there's just a lot to like about NC.  I think you need to consider what type of investment you want to make first (who is your ideal client, what is your ideal property, ideal sub-market, which city do you want to visit on your personal vacation, etc.) because these cities have some very big differences.  Also remember that the key to making profit in an STR is excellent operations, not just the acquisition.  Here's my take as an agent and investor in the Asheville area:

Asheville pros for STR/MTR:  Asheville is a great place to live and vacation!  We have so much to do outdoors (hiking, mountain biking, kayaking, skiing is a short drive away, etc.), there are pretty views almost everywhere, and all these things are easily accessible (Asheville is still a relatively small city).  The people here are very laid back and friendly.  We have 4 nice seasons of equal duration -- we get a few light snowfalls in the winter, springtime is mild, temps are moderate in the summer due to the elevation, and the fall season is especially enchanting.  There are so many good options for food and drinks both in Asheville and the surrounding towns.  The Asheville Regional Airport makes flying super easy, you're just a quick connection to ATL and you can get anywhere in the country easily.  All these things make Asheville a great location to visit, both on STR or MTR timelines (for travel nurses, digital nomads, etc.).  There are also affordable areas just outside of Asheville that can make good STR investments.

Asheville cons: Since Asheville is still a relatively small city, the economy just doesn't compare to Charlotte in many ways. If you want to target STR guests who are traveling for conferences, business trips, sports tournaments, etc. you won't find as much of that here as in Charlotte. If you want big-city nightlife, Asheville will probably disappoint. Asheville attracts some big-name musicians and comedians from time to time, but probably not as much as Charlotte. Asheville also has mostly banned STRs within city limits (homestay only, but there are a few exceptions), but the surrounding areas are mostly STR-friendly.

If I had to sum it up in one sentence: Asheville is a small-but-growing mountain town, while Charlotte is the big city. You should visit both before picking one!

Mitch Davidson · Answer

Hi @Colin C Barrett. You're considering two very different markets. I used to live in Charlotte before moving to Asheville, and have stayed in Charlotte STR's for work many times. Charlotte is quite suburban, so compared to Asheville you'll have a higher frequency of business travelers. In the Asheville area, you'll have less of those type of guests but a higher frequency of vacationers. Thus I think AirDNA or PriceLabs will show that you're income potential can be a little higher in the Asheville area, but that'll come with a slightly higher purchase price (and therefore down payment). And there are other factors to think about, such as resale, pivoting to LTR or MTR if you have to, getting help at the property (likely easier in Charlotte), accessibility by flight, etc.

Mark Huneycutt · Answer

Hey, I live in Asheville and run an RV Airbnb out of my driveway/yard. I live outside city limits so I can pretty much do whatever from what I understand. Inside the city limits, you have more rules such as not being able to buy a home solely to use it for airbnb - you need to live in it. I got the RV in August and it does really well! It's only $99 a night with no cleaning fees. My occupancy rate for September was 60%, October 100%(leaf changing season), November 58%, December 39% so far. These numbers have been great for me as I only put $1000 down on the 2022 RV and have a $250 a month payment with $38/month in insurance. So really I just need it booked 3-4 nights a month to cover my expenses at this point which I think will always happen.It really helps that my RV has an incredible view, too. I'll provide a link below if Biggerpockets allows it:RV AirbnbI will also say that I bought a duplex in Hendersonville (30 mins from Asheville) in October of 2019 for 145,000 and then did 20k in renovations which really upped the value to around 260k. They're the best 2 units I own. 782 mortgage with 2,000 a month rental income. I paid for the work but if you had bought something like this, lived there, and just done it yourself, it would be a lot cheaper of a renovation (house hack as others have mentioned). Getting a home for 0-5% down and househacking it would be a great idea, even if you turn it into an Airbnb rather than a long term rental.

Kenneth Woodruff · Answer

We have properties in both cities, both are awesome in their own way as others have said.  It would help if we knew what your investment target was as both are pretty steep entry points right now.

Out of city areas offer some relief but still very hard to cashflow and as @Christian Longacre pointed out, the STR regulations are getting more difficult.  You could try the house hack method, which you have some skill set to compliment, however, everyone is trying the same thing in these areas, finding a property and closing on it is going to take a lot of work, luck and ability to close fast.  Keep your mind open as you look in each area and widen your search if needed.  Good luck!!!

Jaron Walling · Answer

I vote for Asheville but only because we vacation and even got married there. In my eyes it's purely a high risk/high reward market. We have glanced at properties from time to time and my god its insane. Properties in the city and mountain cabins have different perks but right now it's all pricey. Do your research and visit the area before you buy.

Laura Shinkle · Answer

I would dive deep into Airdna numbers on both areas. Look on Airbnb and see what homes are renting for that would be in your price range.

I know Asheville has passed some restrictions on STR. I can't speak to what those are though, since that's not my area of expertise. CLT has not, and I don't anticipate it anytime soon as they had the opportunity with the new comprehensive zoning regulations and they didn't touch it.

Both areas can/are areas for successful Airbnbs. Which area would be more convenient for you to get to and do the work to update kitchens/baths since your plan is to do that work yourself? What kind of property can you afford to purchase in each market? I think those would be the main questions I would be asking myself in your shoes.

Evans Wright · Answer

Hey Colin,

I am a Realtor/investor with focus on the Charlotte market. So I will focus on the advantages/disadvantages there.

Disadvantages: Low but rising inventory, valuation increase in all asset classes, long term rentals have not caught up to real estate asset class prices so a lot of properties on the MLS will not cash flow unless you aim to add significant value.

Advantages: Competition to buy has been eroded from the market due to economic uncertainty, low but rising inventory, prices have peaked and are now coming down but low inventory keeps the market from more aggressive correction prices, creative ways to increase your cash flow outside traditional long term renting and increasing migration to the area.

I know Asheville is in high demand as well and property prices have skyrocketed there and people love to travel there.

That being said if you want my help then please feel free to PM me or reach out via call/text. My cell is 785-375-8330.

Account Closed · Answer

I'd make sure that wherever you're buying for the intent to rent on Air BnB, you make sure there won't be a sudden change in legislation that eliminates your business model overnight.

All I got on this.

Jared Trindade · Answer

I love this, and your methods. Thank you for sharing, I told shared the RV story with a few co-workers in the office, and unanimously we agreed that's a super great play!

Cheers!

Mitch Davidson · Answer

@Mark Huneycutt. Love the RV story. Great ROI there. I see you cater to mountain bikers. Seems like an RV is perfect for a 2-biker getaway. Perhaps come out to our next local meetup. If you DM me your email address I'll add you to our invite list.

Asheville or Charlotte suburbs: where to invest for AirBNB?

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