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Charleston, South Carolina, is the jewel of the South and such a vibrant city. Charleston boasts charming cobblestone streets, unique architecture, and its locals are warm and inviting. The historic district is delightful with its colonial homes, landmarks, and monuments; there is truly something for everyone. Its proximity to the beach and other bodies of water, make it even more popular to visit or live. I haven’t even scratched the surface of what Charleston has to offer. That being said, investing in short-term and/or long-term rental properties can be a good investment to consider. If you are considering investing in rental properties, continue reading for the current rental market forecast for Charleston, South Carolina.
Current Charleston, South Carolina Rental Market
Charleston, South Carolina, was ranked number 28 in the nation for having the highest housing cost relative to income. The minimum wage in the area is $7.25 per hour, yet someone would need to earn at least $19.30 per hour to pay for the average two-bedroom apartment at fair market rent without having more than 30 percent of their income go to their housing costs. Rentcafe states that the average monthly rent in the Charleston area is currently $1,873. Renters who require more affordable options can find rental units outside of downtown Charleston, with rentals costing around $1,421. Downtown Charleston is the most expensive place to live, averaging about $3,100 per month.
Finding a Rental in Charleston as a Renter
In many places throughout the United States, the effects of covid and rising interest rates have increased rental prices. Although the market is starting to level out, the cost has remained relatively high due to the scarcity of houses available and undeveloped land. With Charleston being a popular tourist destination, converting long-term rentals to short-term vacation rentals or VRBOs has become more appealing to some. This has reduced the number of rentals available and contributed to the increase in the cost of long-term rentals. While that sounds grim, you can still find rental units; you may need to look longer to find the right one.
The Overall Charleston Housing Market
Once again, the Charleston, South Carolina, the housing market is following the overall trend of the housing market in the United States. There is some wariness due to the rising interest rates causing concerns that the housing market cannot sustain this trajectory. Many families are starting to be priced out, and that is unfortunate. According to Norada Real Estate Investments, the average price for a home in Charleston, South Carolina, is $516,000 and the average median income in the area is $62,213. This increased in the spring and summer months of 2022. However, the housing market has changed as interest rates have continued to rise. In the recent spring and summer months, houses were bought in a matter of days, with many turning into bidding wars. Recently, homes are not selling with the same exuberance, yet, the prices have remained the same. It has been predicted that housing prices will start to decline slightly.
Is Charleston a Great Market for Investors to Invest In?
As stated before, current concerns with the real estate market is that is cannot sustain the high cost if interest rates continue to soar. If you can purchase a home without needing a loan, you are the exception. With the Charleston market remaining a solid investment because of its location, history, events, and numerous things to do, it could be a decent time to purchase. Another concern is the lack of new construction and available lots for sale. This, in turn, will create a higher demand for what is available. Fortunately, because of this, if the housing market does crash, the Charleston market will not be impacted as much. I would also consider the demand for short-term rentals with Charleston being an in-demand tourist destination; investing becomes increasingly alluring.
Long-Term Versus Short-Term Rentals in Charleston, South Carolina
Short-term rentals are great, but you should also consider the overhead that comes with them, including management, maintenance, and property advertising. While many websites, including Air B&B and VRBO, make the process easier, the fees can make it not worth your while. Long-term renters may fetch you less money per month, but you have a steady stream of income from month to month without the hassle, and if you are lucky enough to find a great long-term tenant, it works out for both parties. Either option can be a good investment, but only you can decide which will be the better choice for you. Keep in mind that currently, short-term rentals are in high demand.
One significant benefit of becoming a landlord in the Charleston area is that the region is landlord-friendly. Regardless, it’s always essential to have a rock-solid lease agreement that clearly states expectations, including maintenance, yearly rent increase policy, and any addendums you may require. Don’t forget to screen potential tenants and run credit and background checks to minimize risk and find the right renter. If you want to become a landlord in the Charleston, South Carolina region, or already are one, you should read and understand the local landlord-tenant laws to ensure you to understand your rights as a landlord and understand what you can and cannot do. Making sure you have the proper legal forms to protect you and your rental property is crucial. This includes everything from smoking rules, leases, pay to quit notices, eviction, etc.
Charleston has always been a great area to live, work, play, and invest. With its unique history, proximity to the beach, and overall appeal and charm, Charleston continues to be a great rental market for both short and long term. But don’t take my word for it; check it out and see the many advantages of investing here.
