Jamiesuec, Home Buyer in Isle of Palms, SC

What to consider when looking for a multi-family home to buy on the peninsula of Charleston?

Asked by Jamiesuec, Isle of Palms, SC Mon May 28, 2012

I'm looking to buy an investment property multi-family home to rent, most likely to college students, either in Charleston or Columbia. What should sell me on Charleston instead of Columbia? What extra costs might exist in those old homes in Charleston - eg. special insurance or difficulty to get? Basically, I'm looking for any advice you all might have. Short term plan is to use this strictly as a rental but with the thought of staying in one of the units myself irregularly in 5 years time.

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What should sell you on buying in Charleston is Charleston. Not a big deal until you said you had plans to possibly live in the unit yourself one day. Charleston is a tremendous city. One of the greatest cities in the world. We are going to lead the nation out of this real estate mess. We are doing great and our appreciation rate is always going to be higher than Columbia's. Charleston may have older houses and may have costs associated with flood insurance and hurricanes. But it's all worth it.
0 votes Thank Flag Link Tue May 29, 2012
In addition to townhomes and condos there are many single family homes that are currently on the market in downtown Charleston. Not only would you be able to find a tenant in this strong rental market, but in five years when you’re ready to move here, it will be ready to use as your primary residence.

In addition to students from MUSC and the College of Charleston, there are also teachers, professors, visiting staff, temporary MD’s here on Fellowships, and a new demographic of former homeowners who have lost their homes due to the recent economic downturn and are now turning to the rental market. These are renters with strong income but are unable to get mortgages - very good prospects.

The nice thing about a single family home is that you will not have to deal with the HOA or the Horizontal Property regime fees as you will be the owner and you will maintain and mandate rules, regs, etc. This also puts the burden of home owner’s insurance, pest control, flood insurance, etc on you but that allows you a high level of control which is highly beneficial. As for the ability to purchase homeowners insurance, that is a problem that I’ve not run up against and would be very unusual in downtown Charleston. The key is to find a reputable home inspector to ensure that the home is structurally sound and that prior to purchase any and all defects are addressed to the satisfaction of said inspector.

With all of this said, prior to purchase you must be certain that the home is approved for rental. NOT all homes in historic Charleston are, so be sure that your Realtor only shows you properties that meet this criterion.

As for Charleston v. Columbia… it goes without saying that I’m partial to Charleston.
0 votes Thank Flag Link Tue May 29, 2012
Dear Jamie,

There are many wonderful Charleston Single Houses located in Historic Downtown Charleston that would serve your purpose. And having lived/work downtown myself, I am and will always be partial to Historic Charleston - from an investment standpoint as well as for Charleston's beauty - over Columbia.

The College of Charleston, as well as MUSC will always provide a broad base of year-round prospective tenants all vying for the more desirable properties. Rental income on these properties can easily generate $800/month per bedroom - and usually include an upstairs unit, a downstairs unit and sometimes a pied-a-terre or kitchen house to the back. Your plan sounds superb!

I wouldn't be concerned about the Horizontal Property Regime fees as the property will be fully maintained by you - the owner. If you were to sell one of the units, then yes - a Horizontal Property Regime would apply. Regime fees cover structural hazard/flood insurances, maintenance of the common space, pest control, etc. In all of my years selling properties in Historic Charleston, I've never experienced a buyer NOT being able to secure insurance.

After finding the right property, it's very important to hire a knowledgeable residential home inspector, familiar with historic properties and their various nuances. However, this is an easy obstacle to overcome.

Should you want to take a look at a few properties, please give me a call. There is a surplus of inventory right now downtown, interest rates are low and an excellent time to entertain the thought of buying.

Kindest regards,
DeAnn Carroll, Realtor
Mobile: 843.670.7947

Carolina One Real Estate
49 Broad Street
Charleston, SC 29401
0 votes Thank Flag Link Mon May 28, 2012
Dear Jamie Sue,

Thank you for giving me the opportunity to provide you information about investment properties in Charleston.

There are three things that you want to investigate that could dramatically impact your cash flow on downtown properties. The first thing you want to have thorough information about is the monthly regime fee since many of them are VERY high. You want to know what it covers since some of the peninsula may be in the Wind and Hail Pool which could almost double your insurance rates. If the regime fee covers the structure insurance, that would be important to know. The second item is the insurance premium as noted in my previous comment. The third is the taxes at a 6% assessment which are really 3 times what they are at 4% since the property no longer qualifies for tax rollbacks. You also need to make sure that the home qualifies for rentals and if there is a limt on the number of non related occupants living there.

Taking all of those things into consideration, the rental rates are much higher than most of the Charleston area so many of your costs could be recouped. You just have to crunch the numbers, as you know.

With regard to whether the Columbia area would be a better place to purchase, I believe that there is no contest....but that is just my opinion. :)

Have a great week and let me know if I can help you further.

Best regards,

Cheryll

Cheryll Woods-Flowers, Keller Williams
843-442-2219
cflowers@woodsflowers.com
Web Reference: http://www.woodsflowers.com
0 votes Thank Flag Link Mon May 28, 2012
Not to be impertinent but I left NEW YORK CITY and travelled to many cities and did a due diligence decided on Charleston Sc. I have 23 rentals that I started buying before I came down here. Moved within 3 months of 9/11 and dont' miss anything in NY.

Rentals move here in Charleston more so in North Area where I am and why !! Boeing, Google, SpaWar dept that develops weapons, Force Protection the company that makes the trucks to keep troops safe from IAD's you have seen on TV and USAF and Navy Base. Add Charleston Southern University and Trident College to the mix. Trident Hospital and Summerville Hospital as well. Happy to set you up in autormated REAL MLS system that gives you auto feed of any units that maybe of interest too you without phone calls.

Tax's insurance and utilities also lower in North area. 20 min to beack downtown Tangier outlets and the NCHAS Sports and Show Arena. Also you don't rely on young people who may or may not maintain the home as you would like or myself as an investor , realtor and property manager would like. Last but not least you get more for your money outside of downtown Charleston. College of Charleston is far from the only rental are in Chas. Sc I should know. Its what makes you happy. I need to be downtown or I want bang for my dollar you make the call. Oh and unlike Columbia we don't get snow !! Best of luck and if you just want to chat with an investor and investor agent give a call 843 810 3919 no obligation of anykind. I will give you a reference of a Major USAF stationed in Hungary with NATO purchased 4 in past year where I suggested and rented some BEFORE the close !! Again Good Luck Lou Russo Buyer Investor and Relocation Agent Carolina One
0 votes Thank Flag Link Mon May 28, 2012
Not to be impertinent but I left NEW YORK CITY and travelled to many cities and did a due diligence decided on Charleston Sc. I have 23 rentals that I started buying before I came down here. Moved within 3 months of 9/11 and dont' miss anything in NY.

Rentals move here in Charleston more so in North Area where I am and why !! Boeing, Google, SpaWar dept that develops weapons, Force Protection the company that makes the trucks to keep troops safe from IAD's you have seen on TV and USAF and Navy Base. Add Charleston Southern University and Trident College to the mix. Trident Hospital and Summerville Hospital as well. Happy to set you up in autormated REAL MLS system that gives you auto feed of any units that maybe of interest too you without phone calls.

Tax's insurance and utilities also lower in North area. 20 min to beack downtown Tangier outlets and the NCHAS Sports and Show Arena. Also you don't rely on young people who may or may not maintain the home as you would like or myself as an investor , realtor and property manager would like. Last but not least you get more for your money outside of downtown Charleston. College of Charleston is far from the only rental are in Chas. Sc I should know. Its what makes you happy. I need to be downtown or I want bang for my dollar you make the call. Oh and unlike Columbia we don't get snow !! Best of luck and if you just want to chat with an investor and investor agent give a call 843 810 3919 no obligation of anykind. I will give you a reference of a Major USAF stationed in Hungary with NATO purchased 4 in past year where I suggested and rented some BEFORE the close !! Again Good Luck Lou Russo Buyer Investor and Relocation Agent Carolina One
0 votes Thank Flag Link Mon May 28, 2012
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