InvestmentLiving in Charleston SC: A Decision to Buy or Rent?

Living in Charleston is great fun but the decision to move here comes with its own challenges. A recent article in the New York Times sets out an excellent road map to help with that decision – to buy or to rent.   As an investor we would encourage the population to rent, as that’s good for our portfolio. As a Realtor we would encourage buying a home in Charleston SC, as that’s good for real estate income.  As a well-intentioned member of this community, we also know that it’s not a simple decision and both have a place depending on your personal circumstances …

So, let’s have a quick look at what factors encourage a decision to rent, listed in approximate order of significance. These can be summed up as: 

• High property values
• Short time lines, such as a one or two year job placement
• High mortgage rates
• Short mortgage amortization periods
• Large down payment needed
• High investment return rates and low to moderate house inflation
• High property taxes (paid by landlord)
• High cost of ownership (maintenance, insurance, common fees … etc.)

Some categories are obvious, if you plan to stay only a year or two then renting is the play as you will not be able to spread all the costs associated with buying and selling over a protracted period. Some are less obvious such as high investment returns meaning that money on the stock market is likely to outperform cash locked up in property. Assuming of course that the cash is available in the first place and not quickly grabbed by all the competing needs of a family – jobs, cars, kids, grocery bills, medical …

At the end of the day, it’s a personal decision based on your personal circumstances and risk profile.   Our own policy is a mixture, we own our home free and clear as we are at a time of life when we need that security.  Our investments are typically rentals in the downtown marketplace.  Each year we add additional rentals to the pool from our construction company, but at the same time sell off those that are either under-performing and more suited to owner occupier, or are not otherwise core to our strategy.  

Note: You can view the original New York Times article HERE, but our best suggestion would be to meet with a qualified Realtor who can advise you on the best strategy for your specific situation. Like we said, at the end of the day, it’s a personal decision that should be based on your circumstances and risk profile. If you’ve made your decision and buying is what’s right for you, have a look at our FREE Guide on How To Buy Charleston …