Which Investment Would You Choose?

Question

We are new investors at a crossroads with our investment next steps and are looking for advice.

We have around $80,000- $100,000 to invest and are considering two very different paths:

Option 1: Build Out Our Downtown Charleston Duplex
We’d invest about $50K out-of-pocket to add an addition to our current 2/1 and 1/1 duplex, making it into a triplex — which would become a 2/1, a 3/2, and a separate mother-in-law suite. That means two medium term rental units while we live here, and three once we eventually move. The city has already approved the footprints. In addition, the home's value would increase thanks to the prime location and expanded footprint.

Option 2: Buy Another Property (Possibly Out-of-State)
Alternatively, we could invest in a separate property elsewhere which would be a short term rental — potentially with faster cash flow and returns. But it would likely require more third-party management and active oversight.

We’re weighing long-term equity vs. faster rental income, hands-on vs. remote involvement, and maximizing one asset vs. spreading out.

What would you do — expand the home you know or invest somewhere new?

Melissa Justice · Answer

@Lauren Thompson,

Great question and sounds like you're in a strong position with solid options.

If your primary goal is to build wealth and scale your portfolio, buying another property might give you more flexibility, diversification, and cash flow potential, especially with $80K–$100K ready to deploy. Spreading capital into another property (possibly in a landlord-friendly, high-growth market) could help you:

Tap into another appreciating market
Diversify income across two assets instead of just one
Generate immediate rental cash flow, especially if you buy in a strong long-term or short-term rental area
Keep your current equity untapped for future refinance options

The build-out sounds like a great long-term play, especially with value-add potential in a prime area, but that $50K+ investment may be locked in for a while, and you're taking on a project with variables (cost overruns, time, etc.).

If the expansion can be delayed a bit, it might make sense to use this capital now to acquire another cash-flowing property, let that property pay you while your primary residence continues appreciating, and then revisit the build-out later when you can leverage more equity or cash flow to fund it.

In short: if the goal is scale and income, buying another property gives you both. The build-out may still make sense later, especially once your portfolio is paying you.

Always happy to chat more about specific markets, options, etc! Best of luck!

Patrick Roberts · Answer

Im very bullish on the CHS peninsula for the long term. If the BZA is onboard for what you're doing, half the battle is already won in my opinion. Question: have you determined whether you're subject to the BAR, or have they already approved your project? This could be a major issue if you have to get demo permits.

If I was in your shoes, I would probably expand the CHS property. If you're able to get STR permits (which is a hurdle in itself), the peninsula is probably one of the best places in the country for it. Also, you may want to convert the ADU into a vacation home for yourself one day.

Long distance properties just add headache and complexity.

Drago Stanimirovic · Answer

Lauren, I’d lean toward expanding your Charleston duplex. You already know the asset, have city approvals, and can build long-term equity and cash flow in a prime location. It's a lower-risk move with high upside. Out-of-state STRs may bring faster income, but also more complexity and risk.

Arman Ahmed · Answer

@Lauren Thompson

Hey Lauren — great question, and it’s awesome to see you thinking strategically.

Option 1 definitely has its merits: you’re adding value to an existing asset in a strong market you already know, and that addition could give you a great long-term return with flexibility for medium- or long-term rentals.

That said, I’d really encourage exploring Option 2 — especially if building a real estate portfolio is part of your long-term vision.

✅ You can get into a cash-flowing market where your dollars stretch further (think Midwest or Southeast)

✅ Potential for better cap rates and faster ROI

✅ Builds experience with remote investing — a valuable skill that scales

✅ Diversifies your portfolio across markets, which adds a layer of safety

Of course, out-of-state investing takes more upfront work — building your team, vetting neighborhoods, doing remote due diligence — but once that’s in place, it can be surprisingly hands-off.

Many investors start by house hacking or improving their primary property, but once you’ve done that, going out-of-state is often the next leap that accelerates growth. You’ve already got the mindset — just pair it with the right market and team.

Happy to chat if you ever want market ideas or tips for building out-of-state systems!

Mike Dymski · Answer

Option 1 seems like a no brainer...likely spending $50k to make hundreds of thousands in value add and future ROI...and it's a known outcome.  Congrats!

Syed Ahmed · Answer

That’s a great position to be in  both options offer real potential. Building out the Charleston duplex sounds like a solid long-term equity play, especially if the location is appreciating and you’ve already got city approvals. But if you’re comfortable with remote management or partnering locally, option 2 could jumpstart cash flow and diversify your portfolio. Personally, I’ve seen value in both paths, and would be happy to share some of the strategies that helped me weigh similar decisions. Feel free to connect if you ever want to bounce ideas

Min Zhang · Answer

This is a great position to be in, Lauren! Both options have real upside, just in different ways. Expanding a property you already own and live in feels like a lower risk move with long term equity and added flexibility down the line. It’s also nice that you’ve already got city approval, which is a big hurdle out of the way.

On the other hand, branching out with a new property (especially out of state) could help diversify your portfolio and potentially generate stronger cash flow sooner, but definitely comes with more moving parts, especially around management.

There’s no one size fits all here, but you’re asking the right questions. It really comes down to which tradeoffs you’re more comfortable with right now. Happy to keep the conversation going if you want to talk it through more!

Patrick Roberts · Answer

Nope. Even without STR permits, I think land on the peninsula will continue to appreciate very well for the long term. Too many people want to be here with not enough space, and the peninsula will always be the top of the list.

Being BZA and BAR approved is huge.

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