[Dulceácido]

^^^I've been looking at the market in the Charleston area to buy a rental property. The prices are outrageous right now. Even the foreclosures (in decent areas of town) are overinflated.

There will have to be a correction soon.

That having been said, as another poster pointed out, if you can get in with a large down payment, you could charge a reasonable rent (the rental market is also on fire) that pays your small mortgage and still has some profit margin. The problem is if you can't buy it outright, don't have a large down payment that substantially lowers your mortgage, AND you get a bad tenant--could be a financial sticky booger that you can't flick off your finger because you bought so high. Also, if it's not something that you're willing to hold for a very long time, it just doesn't seem worth it to me. There are better things you can do with your cash at the moment.

[ts58]

This is more of a general advice not a critique of the OP's post:

Ignore everyone saying the market is too high. There is absolutely no indication that the market in whatever asset class cannot go another 20-40-75% higher while naysayers are holding their dicks in their hands.

Run the numbers and most importantly, your risk tolerance. Then execute your investment strategy.

[jamaicabound]

(07-15-2018 10:41 AM)Dulceácido Wrote:  

^^^I've been looking at the market in the Charleston area to buy a rental property. The prices are outrageous right now. Even the foreclosures (in decent areas of town) are overinflated.

There will have to be a correction soon.

That having been said, as another poster pointed out, if you can get in with a large down payment, you could charge a reasonable rent (the rental market is also on fire) that pays your small mortgage and still has some profit margin. The problem is if you can't buy it outright, don't have a large down payment that substantially lowers your mortgage, AND you get a bad tenant--could be a financial sticky booger that you can't flick off your finger because you bought so high. Also, if it's not something that you're willing to hold for a very long time, it just doesn't seem worth it to me. There are better things you can do with your cash at the moment.

I'm kind of in agreement with you but the one thing eating at me is the unique geographic layout of Charleston. Because there's so much swamp land and marshland and because everything is connected by bridges, as well as it being an old city, it can't really sprawl like other areas. Some areas the suburbs just keep extending and extending but in Charleston there's only so much land to build on within a reasonable commute to Charleston, once you start getting up near Summerville, GooseCreek etc your on the outskirts of what most people would be willing to commute and traffic will only get worse. I also see Mt Pleasant has stopped the building of all condos and apartments. ANyhow like I said I'm kind of torn do I just bit the bullet and buy in at, at least what today is a high, or do I hope for a correction that may or may not ever come.

It's really amazing to me James Island, Mt Pleasant, etc for like 300k your buying a 2 bedroom condo that's not even very nice. Some places have nice pools, rec rooms etc. Alot of the stuff I'm looking at 300k is gonna get you a condo that's essentially the equivalent of a pretty dumpy suburban apartment ie cheap finishes, dated, cheap construction, maybe a 10x10 murky green pool. It really blows my mind.

If you have any tips or anything I'd love to hear. As far as what I'm looking at considering the east end of Johns Island to where commuting downtown would still be reasonable. Unfortunately Johns island is very remote so not a ton of shopping or nightlife or whatever else but I guess if your near the east end you could feasibly make it to james island or downtown fairly quickly.

West Ashley seems to be a young hip area thats still fairly affordable as well.

I think I'm priced out of Mt Pleasant, Daniel Island has some deals but seems pretty boring and family oriented, the one plus side being your still in that 526 loop and pretty close to both downtown and mt pleasant. I know DI gets a rep for being uber expensive and it is but with some of the 1 bedroom condos I see them pretty cheap, I imagine because DI doesn't really appeal to younger people and single people

I've had my eye on charleston for like 5 years and really kicking myself in the ass for not pulling the trigger sooner. Granted my financial situation has improved greatly in the past 2-3 years so would have been riskier but shit some of the stuff I'm looking at has nearly doubled in price

[MongolianAbroad]

(07-15-2018 09:35 AM)jamaicabound Wrote:  

(07-14-2018 07:04 PM)Spaniard88 Wrote:  

(07-14-2018 02:52 PM)jamaicabound Wrote:  

(07-13-2018 10:40 PM)sonoran_ Wrote:  

Atleast you are aware and at terms with the risk that is present, specifically that of investing in stocks and real estate. You better be ready to dollar cost average for your "7-10 year" strategy, cause for all we know, you could be buying the top.

Real estate really isn't that risky if your doing rentals as opposed to flips. If you buy at the right price and don't overleverage yourself and buy at the right price it's pretty hard to lose

^^ This is key, so much of your money in real estate is made at the time of purchase, not afterwards. Get that right, and you've got a ton of leeway in regards to what you can do with the property.

Same thing with actually running the property, the initial action, the tenant selection, is key. For all intents and purposes, if you have a great tenant, that lease never needs to even be read, it only comes into play when you erred in tenant selection.

Get the purchase price right, get the tenant selection right, and you can more or less be on easy street.

Just curious, what's your feelings on the real estate market. Part of me feels like it's way overinflated at the moment, however at the same time I realize people having been saying the stock market is overinflated for the past 5 years or more and anyone to scared to be a part of it missed out on big gains.

I think real estate all over the country is hot, but the Southeast ie the Carolinas seems to be incredibly hot. I'm almost scared to buy in at this point in time. One particular area outside of Charleston I'm looking at has appreciated 22% on the year and were only in Jully.

As you and I both stated you make your money when you buy and right now there's few deals to be found. I'm torn between wanting to buy before I'm priced out of the area and wanting to get in at a good price

Real estate's local, to a point, so if you find some gems, make a move, absolutely. Sent you a PM.

[jbkunt2]

Thanks everyone for the comments. Some food for thought.

I think I’m going to start stock piling cash for the next few years. Maybe 25% into the markets.