Top 5 Best Real Estate Investment Markets in North Carolina

Kristine Cameron

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Kristine Cameron

January 4th, 2023
Updated January 4th, 2023

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In recent years, North Carolina has become highly appealing to investors across the country. The steadily growing population, thriving tech sector, and temperate climate has made it a great place to live without breaking the bank.

Discover the best real estate investment opportunities in the state and how you can find undervalued properties with this guide!

Overview of North Carolina real estate trends

According to the Office of State Budget and Management (OSBM), net migration made North Carolina the fourth fastest-growing state in the U.S. in 2021.

"For the first time, net migration contributed to all of North Carolina’s population growth," the OSBM reported. "Before the pandemic, net migration accounted for about two-thirds of North Carolina’s population growth."

There are plenty of reasons why more and more people are seeing the appeal of North Carolina. The state boasts picturesque scenery, a booming economy, and more affordable costs of living than the national average.

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Top 5 North Carolina real estate markets in 2022

🏆 Best overall
🌴 Best for vacation rentals
💸 Best for house hacking
🏡 Best for flipping
📅 Best for long-term rentals

Ultimately, the best investment market for you depends on your personal goals. If you want to flip a home, you probably won't be looking for the same criteria as a vacation property investor.

Some investors focus on appreciation to avoid paying capital gains every year, whereas others like the steady stream of income that comes from long-term rentals. We've identified some of the best investment markets for multiple strategies below, but you can also use our rental property calculator to evaluate individual properties.

To find the best real estate investment market in North Carolina, we compiled data across the state. We evaluated property appreciation rates, affordability based on average income, and profitability based on the costs of renting versus buying a home. Learn more about our methodology.

» LEARN: Real Estate Investing — A Complete Guide To Getting Started

Best overall: Jacksonville

🏡 Median home value
$241,636
📈 Property appreciation rate
20.97%
💰 Median household income
$51,560
🔑 Median gross rent
$1,029
🏦 Median mortgage cost
$1,272

Jacksonville is a mid-sized city of about 73,000 residents with the highest rent-to-mortgage ratio in the state (80.9%). The median age of residents is only 26.5 years old, indicating that there's a healthy mix of families, young adults, and college students in need of housing here.

Jacksonville is also one of the state's tourist hot spots. In June of 2022, the Economic Development Administration (EDA) awarded Jacksonville a $750,000 grant to further improve the city and attract more visitors and potential residents.

“The travel and tourism industries are a major economic engine for our state,” said Governor Roy Cooper. “It’s important to invest in destinations like Jacksonville that are beautiful and welcoming North Carolina communities.”

Overall, the city has a small-town charm with all of the attractions of a larger metro, so it's a great spot for investors to get started. There are opportunities to rent to local families, students attending the Coastal Carolina Community College, and tourists alike.

Best for vacation rentals: Raleigh

🏡 Median home value
$457,072
📈 Property appreciation rate
27.16%
💰 Median household income
$78,706
🔑 Median gross rent
$1,162
🏦 Median mortgage cost
$1,602

The capital of North Carolina, affectionately nicknamed the "City of Oaks," attracts millions of tourists each year. According to the city's annual report, Raleigh attracted 15.8 million tourists in 2021!

Buying a home can be more expensive here, with the median home value coming in at $457,072. However, the high year-over-year appreciation rate of 27.16% can be highly appealing if you're looking to invest in short- or long-term rental properties.

No matter what time of year it is, you can depend on a consistent stream of tourists needing a place to stay. Raleigh hosts thousands of events every year, ranging from collegiate sports games to concerts to holiday festivals.

Raleigh is also known as the "city in a park" due to being at the center of several parks that stretch out for thousands of acres. From beautiful botanical gardens to cycling trails to golf courses, visitors will never be bored here.

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Best for house hacking: Durham

🏡 Median home value
$435,330
📈 Property appreciation rate
28.12%
💰 Median household income
$64,745
🔑 Median gross rent
$1,068
🏦 Median mortgage cost
$1,516

Durham is a great option for house hackers because its population is expected to increase by nearly 200,000 residents by 2050, according to the 2050 Metropolitan Transportation Plan. It's also home to Duke University, which brings in thousands of potential students looking for affordable housing near campus.

The term "house hacking" is any strategy where a homeowner uses their property to earn an income. However, house hacking traditionally refers to buying a property to live in and then renting out other units or rooms to pay the mortgage.

If you're interested in house hacking, it's best to look for growing cities with a high percentage of renters. Ideally, renters should abide by what financial experts call the "30% rule" — people shouldn't spend more than 30% of their gross monthly income on housing.

The economy in Durham is thriving, attracting local entrepreneurs and international businesses alike. This has created thousands of new job opportunities, which means you can expect a steady stream of renters. You may even be able to appeal to vacationers as well, since Durham is just a short drive from Raleigh and Chapel Hill.

» LEARN: House Hacking — How To Live for Free With Real Estate Investing

Best for house flippers: Burlington

🏡 Median home value
$271,384
📈 Property appreciation rate
28.48%
💰 Median household income
$51,580
🔑 Median gross rent
$822
🏦 Median mortgage cost
$1,193

With an affordable median home price of $271,384 and a year-over-year appreciation rate of 28.48%, Burlington is a haven for house flippers. Not only that, the steady influx of people moving here promises to keep this market healthy for the foreseeable future.

The Burlington Metro’s population growth rate of 6.44% in 2019 was double the rate of Winston-Salem and Forsyth County (both at 2.99%). Experts are predicting that Burlington will continue to grow for years to come, with an expected metro area population increase of 15.4% (for a total of 185,000 residents) over the next two decades.

With the promise of rapid population growth on the horizon, the current market is a goldmine for house flippers. Homes are selling for less than the national average, but they're also increasing in value faster than average. This indicates flippers can buy undervalued or cheap properties, do some basic renovations, and sell for a profit without having to do expensive repairs.

Best for long-term rentals: Winston-Salem

🏡 Median home value
$241,684
📈 Property appreciation rate
22.49%
💰 Median household income
$52,607
🔑 Median gross rent
$790
🏦 Median mortgage cost
$1,178

The best cities for long-term rentals are those with a high number of renters, average home prices, and residents with healthy rent-to-income ratios.

Since nearly a third of Winston-Salem residents rent and the city is showing promising growth, this is our top choice for landlords and other long-term property investors.

In 2020, Winston-Salem's population reached 249,545; this is nearly a 9% increase from 2010. The city is also near Wake Forest University and Winston-Salem State University, which have a combined undergrad population of around 10,000 students. New and returning students who need a place to stay could benefit from a home or apartment near campus.

Despite the steady rise in new residents, home prices have remained relatively affordable. Better yet, a recent study concluded that large investors make up only a small percentage of home sales in the city, so the market is still ripe for small or brand-new investors.

How to find undervalued North Carolina properties

The best deals in North Carolina are usually homes that only need cosmetic repairs, or homes with motivated sellers. Types of homes that make good flips often include foreclosures, pre-forecloses, short sales, and abandoned or neglected properties. Here's how to find them.

1. Use real estate investment software

One of the biggest challenges of flipping homes or finding rental properties in North Carolina is finding great deals. But the DealMachine app is one tool that can really help you.

DealMachine's real estate software helps North Carolina investors find distressed homes (such as pre-foreclosures, foreclosures, or short sales) and get in touch with owners fast via batch skip tracing and direct mail campaigns.

DealMachine's driving for dollars app is fast and easy to use. When you're driving around town and spot a home that could be a great deal (maybe it's been abandoned or neglected), you can send the owner direct mail through the app for huge time savings (no post office visits required).

Download the DealMachine app to find undervalued North Carolina properties as you drive. DealMachine offers a 7-day free trial and $15 in free credits that can be used towards marketing (like sending out direct mail to homeowners).

Other popular real estate software or websites for flippers to consider include:

  • Flipster: Primarily targeting house flippers, this app helps users find motivated seller leads, while also providing valuable comparable property information to help you estimate a home's fair market value before making an offer.
  • Flipperforce: The Flipperforce app helps BRRRR method investors analyze home values to calculate the maximum purchase price to offer on a property before making a purchase.
  • Stessa: Stessa's software allows you to easily track the performance and financial status of all your properties in one easy-to-use app. It provides regular reports on how profitable your properties are and can be linked to your financial accounts for automatic updates.

2. Look for FSBO homes

Investing in a FSBO (for sale by owner) property may get you a better deal since you'll be negotiating directly with the seller instead of a listing agent. Many FSBO sellers are more concerned about selling quickly than earning the highest possible profit, which can help you keep more money in your pocket.

Zillow's foreclosure center is one great resource for finding foreclosed and bank-owned properties in your area. However, unlike off-market properties you'd find on DealMachine and other software, most of Zillow's properties are publicly listed — meaning you'll likely face stiff competition from other investors.

» MORE: 8 Steps to Buy a Foreclosed Home in North Carolina

3. Partner with an investor-friendly agent

Using an experienced realtor is the best way to ensure a favorable, easy home purchase.

Great agents understand North Carolina's different investment markets, are familiar with real estate laws, and can provide access to lesser-known neighborhoods to help you discover your dream investment property.

Clever's real estate agents can guide you through North Carolina's real estate market and make your house-hunting journey a breeze. Eligible buyers can even get cash back on their home's purchase price after closing, which could help you save thousands.

👋 Start your real estate investing journey now!

Buy your investment property with a top local realtor who specializes in helping real estate investors find great deals. Clever can connect you with investing pros at trusted brands like Keller Williams and RE/MAX.

Enter your zip code to get personalized agent matches sent straight to your inbox. Compare your options until you find the perfect fit, or walk away with no obligation. Try Clever's free service today!

Methodology

We used data from the U.S. Census Bureau to determine which cities offer the greatest investment opportunities. For each city, we considered the median mortgage cost, average rent prices, median household income, and annual property appreciation statistics.

We also considered how successful different types of investments — such as house flipping, vacation rentals, and traditional single-family homes — may be in each market to help investors reach their goals.

Frequently asked questions

Our top five picks for investors include Jacksonville, Raleigh, Durham, Burlington, and Winston-Salem. Jacksonville and Raleigh have high rent-to-mortgage ratios, which indicates that investors can reliably earn profits from either tenants or tourists. Durham, Burlington, and Winston-Salem were found to have more niche (but equally lucrative) investment opportunities available to specific investors.

We recommend using specialized real estate investment software — such as DealMachine — or partnering with a knowledgeable local real estate agent.

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