How To Make The Most Of Your Investment In Southeast Real Estate

The Southeast is still an area with low-cost real estate, where bargains can be found, and where some markets remain in a recovery situation. This means that investors can use a variety of strategies - depending on their appetites for risk and opportunity.

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Migration from other parts of the country remains a major feature of the region, especially in the big markets where more of the economic growth is being concentrated. This important phenomenon is clear in the rest of the country as well - more job growth in the big markets, more retirement and leisure development in the smaller markets.

Another feature, also common in the rest of the country, is the lagging development of smaller markets that formerly had an industrial base, in this case often in textiles, tobacco, apparel, or furniture.

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Southeast 2018

A few markets in the region are out-and-out speculations, where the economic indicators (population growth, job growth) are weak and home prices are well below the income price. These include Columbus and Macon GA, Florence SC, Fayetteville and Hickory NC, and Virginia Beach (although prices aren't so low) and Roanoke VA. In these markets it's best to invest in single-family rentals bought at low prices, with little extra investment needed and no expectation that rents or resale values will increase anytime soon. Location near medical centers or colleges gives the best potential. Buy and hold, there's only upside but it will take some time.

A step removed from outright speculation are markets with home prices still below the income price but the economics are better and rising home prices suggest that demand for housing is getting better. Columbia SC, Greensboro and Winston-Salem NC, and Richmond and Lynchburg VA are in this category. In these markets location is still extremely important and you shouldn't count on rent increases, but the odds for a turnaround are better and investments in apartments as well as single-family rentals can have good returns.

Markets with the best risk-reward picture are in the next group - where home prices are still modest compared to the income price but the economics are very promising: Augusta GA, Greenville and Spartanburg SC. These are still speculations because the good economics haven't yet become a longer-term trend that's reflected in higher population growth.

Investments in the vacation/retirement markets (Savannah GA, Myrtle Beach SC, Asheville and Wilmington NC) and the college markets (Athens GA and Charlottesville VA) have a similar risk-reward profile - surges in demand for more housing are cyclical, the long-term prospects are moderate, the risk is fairly low. In these markets investors should target housing for the support staff, not vacationers or students. Apartments, single-family rentals and single-family homes split into rental units can be considered. The price/rent ratio is favorable right now except in Asheville, where straight single-family rentals are too expensive.

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https://www.forbes.com/sites/ingowinzer/2018/06/06/how-to-make-the-most-of-your-investment-in-southeast-real-estate/