I'm looking to purchase my first rental investment property and have been interested in the RTP area for some time. The housing market there has truly boomed over the past couple of years, and from my research and understanding, it's a good area for rentals since it's close to two cities, has stable and big employers, and has universities nearby.
Figured I'd ask for perspectives on this forum in case there's something I missed or don't know. How has your rental investment experience been in/around RTP and Raleigh?
Rental Property Investor · Napa, CA · Member since 2016 · 68 posts · 57 votes
4y
@John Hernandez Welcome to RTP! It’s a fantastic market with a great group of investors, agents, property managers, etc active on the BP forums.
@Pat Lulewicz is spot on with his analysis above. Cash flowing immediately after purchase in Raleigh/Durham is tricky right now unless you have a creative value-add strategy (adding bedrooms, STRs, ADUs, etc). Otherwise, you’re likely relying on the appreciation wave we’ve been riding to make your numbers work.
There are still plenty of cash flowing deals to be had in surrounding cities like Burlington, Graham, then out to Greensboro, High Point, etc. I would check these areas 45-60 mins west of RTP if you're interested in more "traditional" investments with good COCR. I've done a few textbook BRRRR deals lately out this way - the numbers still work!
Realtor · Raleigh NC and Greensboro, NC · Member since 2019 · 393 posts · 392 votes
4y
Hey @John Hernandez, congrats on taking the first step and looking to buy an investment property! Investor and Realtor in NC checking-in here. 2 parts to your question.
Yes - RTP is a fantastic rental market. Raleigh/Durham in general is an incredible rental market, and we can usually lease-up a property, if priced right, within 1-2 weeks. I've had a property lease-up prior to closing so you've got Day 1 occupancy which is huge for that silent killer of vacancy. In general, most larger NC cities are in this scenario right now so it's a great state for landlords.
Cash Flow, specifically, and ROI around RTP is going to be very hard to come by. Even if you self-manage, the likelihood of finding a property that can cash flow and then return you a decent and consistent ROI is going to be tough. To your point, appreciation has made the market boom over the last 5-6 years, and rents have absolutely gone up significantly, particularly over the last 2 years. However, to be right around RTP will usually net you $1k-$2k of cash flow. With that said, the appreciation we expect in this area will make up for that low cash flow by leaps and bounds, if your cash position can keep you afloat for that long. Of course, that appreciation play is speculative in nature but it's not uncommon to see segments of the market appreciate 25-35% YoY for the past 2 years.
If you step outside of the specific RTP "bubble" and look broadly across Raleigh and Durham, there is definitely cash flow to be had in some of the lower-priced parts of these 2 cities. PM me to talk about what kind of criteria you have for your properties and the returns profile you're looking for, and we can talk specifics.
Rental Property Investor · Napa, CA · Member since 2016 · 68 posts · 57 votes
4y
@John Hernandez Welcome to RTP! It’s a fantastic market with a great group of investors, agents, property managers, etc active on the BP forums.
@Pat Lulewicz is spot on with his analysis above. Cash flowing immediately after purchase in Raleigh/Durham is tricky right now unless you have a creative value-add strategy (adding bedrooms, STRs, ADUs, etc). Otherwise, you’re likely relying on the appreciation wave we’ve been riding to make your numbers work.
There are still plenty of cash flowing deals to be had in surrounding cities like Burlington, Graham, then out to Greensboro, High Point, etc. I would check these areas 45-60 mins west of RTP if you're interested in more "traditional" investments with good COCR. I've done a few textbook BRRRR deals lately out this way - the numbers still work!
Property Manager · Burlington, NC · Member since 2018 · 57 posts · 20 votes
4y
Piggy backing off of what @Tim McGarvey said. the area directly between the triad and triangle areas is blowing up right now. i believe that Burlington is one of the top 5 markets in the country right now or close to it. There is a lot of opportunity in these areas. If you're in need of an agent in this area let me know an Ill put you in contact with an investor friendly agent friend of mine.