Charlotte, North Carolina, the Queen City of the South, ranks among the top 20 fastest-growing American cities, according to Forbes. It experienced 2.04 percent population growth in 2017, with 2.07 percent growth expected in 2018. The city is home to headquarters of six Fortune 500 companies, including Bank of America, Coca-Cola Bottling Co., and Lowes. This is all good news for the multifamily housing market’s long-term outlook in Charlotte. In the short term, however, the situation is more complex. Investors considering making a move in the city will benefit by working with an experienced property investment advisor.
Why You Need a Property Investment Advisor in Charlotte
Charlotte’s economic strength is reflected in the flurry of development and acquisition activity in the city at present. However, the city’s real estate market is at a difficult juncture. The recent multifamily building boom in Charlotte concentrated on the luxury market—practically to the exclusion of everything else. The number of units in the central Uptown neighborhood has doubled since 2015, and most of those units are in the luxury category. In March 2018, Uptown had a 21.8 percent vacancy rate, which equates to more than 1,100 empty units. One building has even been partially converted into hotel space.
Meanwhile, there is a deficit of 21,000 affordable housing units, a situation that has been made worse as a large amount of that housing stock has been bought up and razed for new luxury housing. In the last 10 years, affordable housing has been delivered to the market at an average rate of 312 units per year. As neighborhoods are transformed by new construction, there is a NIMBY (not in my backyard) reaction to the addition of affordable housing. That opposition is spreading to other types of development, as evidenced by the powerful reaction to a proposed large office-retail-hotel complex just beyond the boundaries of Uptown. To complicate matters further for investors, construction costs have more than doubled in Charlotte since 2000.
This challenging environment does not tarnish Charlotte’s long-term investment appeal. On the contrary, while it may scare some potential investors away, it also clears the field for more intrepid investors to reap the benefits. Investors seeking to enter the market do need to proceed cautiously, however, and consider working with a top-notch investment advisor.
4 Advantages of Working with an Experience Property Investment Advisor
A good property investment advisor provides valuable services in any market situation, but his or her assistance is especially beneficial to investors facing a market with potential pitfalls. Here are four ways in which an investment advisor can prove advantageous to property investors in Charlotte:
1. An advisor can help you make the best choices
Charlotte remains a desirable market, though not an easy one. A professional investment advisor has deep knowledge of the city and an understanding of the forces that shape its real estate market. The best investment options may involve a series of complex operations that are impractical for an investor to carry out alone.
2. An advisor can tailor your investment to your goals
People invest for different reasons—to live off the income at present or during retirement, leave a legacy, hedge inflation, etc. The opportunities that could best meet an individual investor’s goals may not be as clear to the investor as they are to an experienced advisor. An investment advisor can point out those opportunities, with long-term investments and detailed legacy planning where appropriate. Other investors may be steered toward investments with shorter horizons, such as development projects.
3. An advisor can help with tax planning
Tax optimization of real estate investments is a delicate art. Investment opportunities can look different when their tax implications are considered. So, it’s important to receive qualified advice and act on it promptly. An advisor can often spot unnecessarily high tax burdens and suggest remedies or alternatives.
4. An advisor can keep your portfolio current
The appeal of passive income is that it doesn’t require a lot of investor attention. But your portfolio still needs distinct care. An advisor can make sure you don’t miss opportunities and alert you when prompt action is required to keep your portfolio healthy, such as when it is time to act to avoid depreciation recapture.
CWS Capital Partners co-owns with investors and manages five properties in Charlotte.
At CWS Capital Partners, we are a fully-integrated multifamily real estate investment management firm that offers everything from due diligence and risk management to transaction support and property management. We specialize in assisting our clients with 1031 exchanges, acquisitions, repositioning, and development. We own and manage luxury multifamily investment communities in major markets around the country, and we employ a team of experts who can help you hone your investment strategy. Contact us today to get started on your next investment.
The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. CWS has made this third party information available from authors it believes are knowledgeable and reliable resources. However, its accuracy or completeness cannot be guaranteed and sentiment may change due to legal or economic conditions.
All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.
Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor.
Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.