1% Rule in Asheville?

9 Replies

I'm relatively new to the area (1 1/2) and have been looking for rental properties to purchase. It is virtually impossible to find a property that meets the 1% / 2% test rules. Are the the investors banking on appreciation only? Do you guys have any thoughts on this? 

There are always deals to be had- regardless of location or market.

Asheville isn't a secret any longer. Solo investors and holding companies are scouring the housing market for deals so you are competing with a lot here- which means you either have to look closer or be more creative. Do what others aren't willing.

Finding great deals on MLS is going to be a rare thing and you will need to be ready to pull the trigger very quick if you do spot one. Off market deals are going to be easier to find. Distressed properties are the new bread and butter in the area. Non-distressed properties are selling at premiums that won't align with your numbers.

My advice- stop looking in Asheville. Look where Asheville is going. Have you been here long enough to notice where it's spreading?

Hey Robert. 

I'm super interested in your point. Do you mind elaborating? I've had a similar experience in that good deals are hard to find on the MLS. Where do you see Asheville spreading? My wife and I are moving there in a few months so I'd love to find out more!


I'll throw in my $0.02 worth to say that if you can find a decent house that meets the 1% rule in Asheville, it would also provide a $40,000+ flip profit. Finding and deal this good in this incredibly competitive market is extremely difficult.  I would agree with the original point that market gain is the name of the game for holding properties in Asheville, since surrounding areas, such as Canton, Greenville, Lenior and hickory offer potentially higher rental return ratios, but are not quite as sexy when it comes to long-term market gain. 

I have had good luck in Hendersonville and Brevard and I think Waynesville has opportunity. Off market is your best bet. If it is on the MLS and a good deal you really need cash offers within a day of the listing and most likely it will need to be a value add deal that needs work. That said all of my deals have beat the 1% rule but I have yet to find one in Asheville so far.

I'm currently living in my mountain home here in Hendersonville, but I do the majority of my real estate in Spartanburg and will be moving back there soon. I bought a HUD house here years ago and it did well. I also like the Saluda and Tryon area. It is crazy how many deals are in Upstate SC compared to here! You can run across decent deals in most of Polk county too.

I think most investors and builders have moved to the Greenville/Spartanburg area. I am constantly watching properties in Asheville and cash flow is very hard to find. Most landlords in asheville  have been here a long time and bought their homes when no one wanted to live here . Many upgraded or made lateral moves and just never sold their first purchase. 

As everyone else has already pointed out, Asheville is crazy competitive and the 1% rule is extremely rare for houses. As @Ryan Howell mentioned above some of the outlying areas; Hendersonville, Waynesville, Canton, Candler, Swannanoa still have good options. Personally I love mobile homes as rentals and you can for sure find doublewides that will meet the 1% rule. So yes, they are a rare but they do exisit. If you do find them though as @Chris Harjes mentioned, you will be walking away from a great spread as a flip. 

1% rule off market in OKC all day long! But sounds like you're sticking to NC even if it's not Asheville? 

Polk County is an interesting place to watch. I moved there from SE Florida in the mid 90s. There's been some growth- I'd say pretty slow but I haven't looked at actual data. The potential for growth there is massive but it's going to take something to move in and provide a reason for people to move there.

Some thought the Tryon International Equestrian Center was going to do that. Though, the introduction of that facility did spark some growth, attention, and large land purchases- I think the verdict is still out if that is going to sustain any substantial growth. So far, I don't believe it has and it's lost some momentum with the flop of the World Equestrian Games. They're vying for the next Games to be held there and maybe that will create some more excitement. We'll see.

The location is great. I-26 is an important travel and commerce route. Being between Asheville and Greenville/Spartanburg/Charlotte puts it in somewhat of a central location.

Yet, it's seemingly stagnant right now. For great deals- you may find some. I think people are getting over the idea of their property being able to fetch Asheville prices with the Wold Equestrian Games being over. Rent rates aren't going to be as high and I don't know how much higher they can go in the area without more growth.

If you watch the growth spreading out of Asheville you can try to get in front of the market trends for those areas. As has been mentioned, Black Mountain, Swannanoa, Canton, Candler, Marshall, Mars Hill, Fletcher, Fairview, Fletcher Brevard, Hendersonville are all spots seeing growth.

Greenville/Spartanburg sounds like it's currently an easier market to invest in. I'm not as familiar with those markets though so I can't speak much about that. They have a Top Golf now though.... so there's that.

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