Real Estate ConditionsFirst, let’s talk about the real estate conditions when buying a property in 2022. The market can be described as a seller’s market, meaning there are more people who are looking to buy homes than there are people willing to sell their home. With the low inventory that results from a seller’s market, competition for buying homes has significantly increased along with market prices. For South Carolina, the average median price of homes has increased by 13%, from $234,000 to $265,000. Myrtle Beach specifically has seen an increase in property sales by 43.5% as of March 2021. Homes are also being sold quicker with a state average of sixty days on the market. Mortgage rates are also low right now, with the prediction to remain around 3% for the entirety of 2021 and early into 2022. What do these market conditions mean for someone considering property investment? Since all of these factors combine to make a highly competitive market, it may be difficult to find and receive an accepted offer on your ideal property. An increase in price also means you will most likely need to increase rent to achieve a profit. The challenge in this lies in also keeping your prices competitive with neighboring properties. However, opportunities can still be found within the market. A high house shortage gives way for an increase in the renter’s market, since more people may consider renting as opposed to buying a house. Also, low mortgage rates tend to work in favor of the buyer. However, it is important to remember that a low mortgage does not always equal high affordability.
Financial SituationNext, let’s discuss the current financial situation you should be in when considering investing. It is important to keep in mind that a property investment is strictly long-term, so planning ahead as much as possible is advised. Using methods like the “1% rule” and the “100 time less” rule can help you determine the property’s profitability. You should also start estimating expenses to use as a guide when calculating a property’s mortgage. Keep in mind that rent is going to be your sole source of income, so also consider the highest and lowest prices you are willing to charge. Don’t forget to budget and prepare for property vacancy as well! Another thing to keep in mind is the location and characteristics of the property itself. When real estate conditions are in the state they are now, it is advisable to find a property that has an ideal location, but is the lowest price possible to avoid over spending. Properties can be renovated and updated over time when the funds become available. While real estate conditions may appear to work against property investors right now, there is still hope that you can score your dream property. Remember that property investments are long-term, meaning that real estate conditions can change, and will likely affect your profitability in the future as well. With this in mind, always remember to check the market and arrange your finances before considering investing in a property.
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