Real estate investors often come to New Heights Property Management and ask what type of property they should purchase for their next rental investment. There is no clear response to this question because the answer varies based on your investment objectives. There are several different types of properties in the Charleston market to consider.
Considering Apartments versus Condos
When you are deciding where to invest, the most important thing to understand about the different products available is how they compare to the current market. Pay attention to what is going on around those properties. For example, if you are looking at buying an investment condo, you need to understand what apartment complexes are doing in the immediate geography around that condo.
If a prospective tenant is going to look to rent an apartment, they might also look to rent a condo. But, if someone is looking to rent a condo, they are going to compare your condo rental rate and amenities to those of apartments in that area. So, if you see that apartment communities in the surrounding area have pools and all kinds of other amenities, and they are offering different types of move-in incentives, it will be hard for you to rent your condo in that same area if you are not offering similar amenities and similar incentives. Take this into account before you buy a condo that cannot quite compete with local apartment buildings.
Factor in Your HOA Fees
Another factor to take into consideration when buying a condo or a townhome is the amount that you will pay in HOA fees. These are monthly fees that you have to pay as a result of owning that condo or townhome. Many of these fees do come with some benefits. For example, the association will typically provide your insurance for the structure. They also may help to maintain the upkeep of the common areas, and that will likely reduce the expenses when it comes to maintenance and repairs. But, these fees could also eat into your monthly profits, so do some math around the HOA fees you will be responsible to pay.
Investing in Single-Family Homes
If you choose to invest in a single-family home, you do not need to worry about comparing that property to apartment complexes. A potential tenant who wants to rent a single-family home will not care about apartment offers. That is one of the benefits to investing in a single-family property. It attracts a good pool of potential renters, and there is often less competition. The only competition you have to worry about are other single-family homes, and perhaps some other townhomes that might be in that area. It is possible that a tenant considering a single-family home might also consider a townhome, depending on their needs.
If you would like to talk more in depth about the current rental market in Charleston and how to decide where you should invest and what you should invest in, please contact us at New Heights Property Management. We’d love to share more of our knowledge in order to help you plan for your next investment.