Building rental property portfolios in South Carolina is becoming increasingly popular among real estate investors seeking financial independence and cash flow. These investors love the cash flow properties in South Carolina. These include robust and consistent population growth, low vacancy rates, and a steady demand for rental property with tenants! According to the World Population Review, South Carolina was one of the top three states with the fastest population growth in 2024. Indeed, the population increase is higher there than in Texas, Florida, or the nearby state of North Carolina.
UMMC employs over 10,000 healthcare professionals, researchers, educators, and support personnel, making it one of the biggest employers in Jackson and the state. The medical center’s $1.7 billion yearly budget accounts for 2% of the state’s GDP and 10% of the Jackson metro area’s.
Nissan North America employs over 5,000 people. The banking, telecommunication, and education industries complete Jackson’s occupational profile. It’s simple to understand why investing in Jackson makes sense when looking at the current inventory of homes for sale. Even with increasing interest rates, renting out large suburban homes on single-family plots for roughly $200,000 is still a break-even proposition.
Research shows that high loan rates have significantly impacted New Orleans house values, causing activity to stop and prices to decline by almost 8% annually. New Orleans appears to have hit a tipping point for property sales when you consider the high cost of homeowners and flood insurance, which are among the highest in the nation.
Still, New Orleans makes financial sense, with median prices at an accessible $235,150 and typical rents at $1,619 per month. The biggest obstacle is homeowners insurance, which costs $5,496 annually on average—more than twice as much as the state and the national average of $2,511.25. This means that raising your monthly mortgage payment by about $200 equates to the cost of home insurance.
After glancing at different areas for cash flow properties in South Carolina, you may wonder, “What is a good RTP?”
Many investors adhered to the “1% rule” for years. This rule said that you should only seek deals with more than 1% returns. Moreover, some investors are limited to markets with an average return on principal (RTP) of 1%.
Finding a lot of agreements with an RTP of more than 1% was reasonable when dealing in cash. It’s no longer a helpful generalization. You must adapt to the current state of the market since strictly adhering to the 1% rule will keep you from taking advantage of solid deals by today’s standards. At the time of purchase, some of my best deals—even my highest cash-flowing deals—did not adhere to the 1% guideline.
RTP is not an exact measurement but merely a stand-in for cash flow. A deal should only be pursued or abandoned after the numbers have been thoroughly crunched. It is not advisable to base investing decisions solely on RTP. It is necessary to factor in insurance, taxes, and other costs. You also need to account for rent increases. In your market, if rent increases, the RTP will eventually rise.
This implies that deals with RTPs higher than the city average and deals with RTPs lower than the city average exists by rule. For instance, the average RTP in El Paso is 0.69%, but devoted investors may locate deals with RTPs far greater than 0.69%, probably even over the 1% threshold. All the markets above can provide cash flow deals; generally speaking, a market with an RTP above 6% can do so.
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Many U.S. markets continue to offer significant cash flow potential overall, notwithstanding a drop in cash flow potential as assessed by RTP during the past few years. Research shows they are primarily located in Texas, with others scattered around the Southeast and the Midwest. Nevertheless, there are many other markets with potential for cash flow.
And keep in mind that these are only averages! It does not account for value addition or rent growth, nor does it represent the most excellent offer in each city. These are general measures designed to assist you in focusing on specific cities when considering investments. They are not intended to assess the viability of any particular transaction or niche market.
Short-term rentals are a terrific option for tourists in this stunning and popular state, but South Carolina's permanent population and labor shortage are excellent news for real estate investors.
One of the most well-liked sources of income is rental real estate, as it allows investors to receive rental income for an extended period of time.
RedHead Homes specializes in helping investors discover high-yielding, cash-flow properties in South Carolina. Whether you're an experienced investor or starting, we can help you.
RedHead Homes focuses on the numbers that matter—cash flow! We take pride in carefully selecting and vetting properties to ensure that your investment yields the highest possible return.
