North Carolina economic performance is the focus of this guide for passive real estate investors. First, it highlights the main idea behind the topic. It also outlines the risks and questions worth reviewing. As a result, you can approach the discussion with a clearer framework.
What to know about North Carolina economic performance
Over the past decade, North Carolina has experienced rapid population and job growth. This growth has made a tremendous impact on real estate pricing in all markets across the state for commercial and residential properties (which includes apartment communities). In particular, Raleigh and Charlotte have been impacted greatly. The economic fundamentals remain solid, and it’s one of the reasons we like investing in both cities. I want to share two recent real estate examples and excerpts from articles we received from CoStar. CoStar is the market-leading provider of information, analytics, and marketing services to the commercial property industry in the United States.
Example 1: Charlotte, NC Apartment Sale
An apartment community recently traded hands in a deal that illustrates the growing value of housing in the Queen City. The Collective sold for just over $72 million or $288,200 per unit. That is one of the highest per-unit prices that a buyer has paid for an apartment complex in Charlotte this year, according to CoStar data. The average apartment in Charlotte typically trades for around $206,000 per unit.
Charlotte led the nation in new multifamily units delivered as a percentage of inventory in the year leading up to the third quarter, according to a recent CoStar analysis. And despite the large inventory expansion, continued strong demand has pushed asking rent growth to historic highs of 16.8% over the past year, according to the analysis.
What this means for investors
Example 2: The Tower in Raleigh
A development group is planning to invest $121 million to develop a 20-story, 297-unit apartment building downtown with construction expected to start in April 2022 and doors expected to open in June 2024. The planned 20-story height will be the third tallest among multifamily properties—only bested by the 23-story SkyHouse Raleigh and the 22-story 511 Faye, according to CoStar data.
In recent years, Raleigh has attracted major finance and technology companies, including Apple, which recently announced plans to develop a $1 billion campus. Raleigh benefits from its proximity to the Research Triangle Park, a 7,000-acre complex home to hundreds of biotechnology and life sciences companies. The city is also home to North Carolina State University, which typically has more than 30,000 students enrolled.
Key takeaways for North Carolina economic performance
- Start with the goal and timeline that fit your wider financial plan.
- Next, review the assumptions, risks, fees, and possible outcomes.
- Finally, compare the opportunity with other ways to use your capital.
Put North Carolina economic performance in context
Core ideas for North Carolina economic performance
Every investment decision depends on the investor, the deal, and the market. Therefore, use the ideas above as a starting point for deeper due diligence. Review source documents, ask direct questions, and seek qualified advice when needed. For more guidance, explore our passive real estate investing education.
A clear review of North Carolina economic performance
North Carolina economic performance deserves a clear and practical review. These short checks can support a more informed decision.
- Start with a clear goal.
- Next, define the time horizon.
- Review each key assumption.
- Compare the likely outcomes.
- Test a less favorable case.
- Ask who controls each decision.
- Confirm the fees and incentives.
- Study the market and the deal.
- Check the supporting documents.
- Look for clear communication.
- Compare other choices.
- Keep the full plan in view.
- Write down the main risks.
- Review the source of returns.
- Check the exit assumptions.
- Understand the tax questions.
- Consider the need for liquidity.
- Match the choice to your goals.
- Ask direct follow-up questions.
- Confirm the reporting process.
- Review the operating plan.
- Check the team’s experience.
- Compare the best and worst cases.
- Keep expectations realistic.
- Use qualified advice when needed.
- Document the final decision.
- Review the decision over time.
- Watch for changing conditions.
- Stay focused on the long term.
- Finally, act with a clear reason.
A practical review of North Carolina Economic Performance
First, define the goal for this decision. Next, write down the result you expect. Then, identify the facts that support that result. Finally, note any facts that could change your view.
For example, compare the likely return with the main risks. In addition, check the timeline and the amount of control you will have. However, do not rely on one attractive number. Instead, review the assumptions behind every estimate.
Before you act, ask who will manage the work. Also, confirm how that team will report progress. If conditions change, decide how the plan can adapt. As a result, you can judge the opportunity with more confidence.
Moreover, compare this choice with realistic alternatives. For instance, consider liquidity, taxes, fees, and timing. Likewise, review the downside as closely as the upside. Therefore, your final decision can reflect both your goals and your limits.
In short, use a clear process. First, gather the facts. Next, test the plan. Then, ask direct questions. Finally, choose only when the answers support your strategy.