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Hi everyone, Welcome back to The Wealth Wagon. I hope you are doing amazing this week. Today we will be diving back into the world of Real Estate Investing. We are also planning on adding a new email topic in the upcoming weeks, see the poll below. Enjoy!

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Real Estate Investing

Market Snapshot:

Charleston, South Carolina
The Charleston real estate market remains vibrant, with a median home price of $630,000, representing a 4.2% year-over-year increase. Charleston’s coastal lifestyle and expanding job market in industries like tourism and tech continue to drive demand. The city currently has 2,200 active listings, down 3% from last year, reflecting high buyer interest despite rising mortgage rates. As more people move to Charleston for its culture and climate, the market remains competitive, especially in the single-family home segment.

Median Home Price: $630,000
YoY Price Growth: 4.2%
Active Listings: 2,200 (down 3% from last year)

Deal Of The Day:

Historic Duplex in Charleston, SC
Price: $2,200,000
Units: 2 (3-Bed, 3-Bath each)
Monthly Rental Income: $11,500
Cap Rate: 6.9%

This charming historic duplex offers two spacious units, each with three bedrooms and three bathrooms, generating a monthly rental income of $11,500. Located in Charleston’s vibrant downtown area, the property appeals to both long-term renters and tourists, making it a great fit for investors interested in flexible rental opportunities. With a 6.9% cap rate and proximity to Charleston’s popular attractions, this property offers stable income potential and long-term appreciation in a prime location.

Real Estate Tip:

Investment Strategy:

Seller Financing is a valuable strategy, particularly in higher interest rate environments. In this arrangement, the seller acts as the lender, allowing the buyer to make payments directly to them instead of a bank. For example, a buyer could negotiate a 5.5% interest rate with the seller, which might be more favorable than current market rates. This approach is ideal for buyers who want more flexible terms or who may not qualify for traditional loans, creating a win-win situation for both buyer and seller.

Current Interest Rates:

Charleston, South Carolina
30-Year Fixed Residential: 6.8%
15-Year Fixed Residential: 6.0%
Commercial Rates: Starting at 6.5%

Interest rates in Charleston are hovering around 6.8% for a 30-year fixed mortgage, slightly impacting affordability, especially for first-time buyers. The higher rates are also leading more residents to choose renting, which boosts the rental market, especially for properties near downtown and popular neighborhoods.

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Economic Conditions

Charleston’s economic landscape is driven by growth in tourism, aerospace, and tech, with an unemployment rate of 3.4%, lower than the national average. However, inflation has caused construction costs to rise by 3.6% over the past year, limiting new housing supply. This trend supports price stability and rental demand, as limited supply keeps the market competitive for investors interested in both long-term appreciation and income opportunities.

Why Real Estate Investing Thrives in Coastal Cities

Coastal cities like Charleston present unique investment opportunities, particularly because of their desirability and limited land for expansion. High demand for vacation rentals, especially during peak tourist seasons, creates strong rental potential. Properties near beaches or historic districts tend to hold their value and appreciate faster than properties in other regions due to limited supply and steady demand.

Furthermore, coastal cities often have economic support from tourism and hospitality sectors, making them resilient to market fluctuations. For investors, focusing on coastal properties can mean consistent occupancy rates and rental income. However, it’s important to consider weather-related risks, like hurricanes, and factor insurance costs into overall expenses to maintain a profitable portfolio in these high-demand areas.

The Real Deal: Myth busting

• Myth: Real estate is only for the wealthy. (False)
  Many first-time investors start small with creative financing options, proving that real estate is accessible without large upfront capital.

• Myth: Property management is passive income. (False)
  Managing properties, especially rentals, often requires ongoing effort unless a property management company is hired.

• Myth: Renters are not loyal tenants. (True)
  Many long-term renters are loyal, preferring stability over frequent moves. Offering great service can help retain tenants longer.

Common Real Estate Questions

Q: I want to start investing in rental properties—what’s the best way to estimate if a property will be profitable? - Subscriber
A: Calculate the potential cash flow by subtracting monthly expenses (mortgage, maintenance, property management fees, and taxes) from expected rental income. Ideally, aim for positive cash flow after all expenses. You can also use the 1% rule: the property should rent for at least 1% of its purchase price monthly to have a good shot at profitability.

Q: I’ve heard about using a “HELOC” to invest in more property—how does that work, and is it risky? - Subscriber
A: A Home Equity Line of Credit (HELOC) lets you borrow against your home’s equity, which can provide funds for buying or improving another property. It’s flexible, but there are risks, as your home serves as collateral. It’s best to use a HELOC if you’re confident the investment can cover its costs and add value, as failing to pay could impact your primary home.

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Key Takeaways:

• Charleston Market Update: Median home price is $630,000, up 4.2% YoY with inventory at 2,200 active listings.

• Deal of the Day: Historic duplex in Charleston at $2,200,000, generating $11,500 monthly rental income with a 6.9% cap rate.

• Tip: Be mindful of renovation restrictions when investing in historic properties to maintain value and compliance.

• Investment Strategy: Use seller financing to secure more favorable terms in a high-interest environment.

• Interest Rates: Charleston’s rates are around 6.8% for 30-year fixed mortgages, adding demand to the rental market.

• Economic Impact: Charleston’s low unemployment and strong tourism industry drive stable housing demand and rental growth.

That’s All For Today

I hope you enjoyed today’s issue. If you have any questions regarding today’s issue or future issues feel free to ask. Come back tomorrow for information on how to grow your income and wealth. I hope to see you.

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