Is Rural North Carolina Ideal For Real Estate Investors?

While the metros in North Carolina, like Charlotte and Raleigh, are among the most constantly discussed areas for real estate investing a recent article on WRAL Techwire blog has some interesting data on rural North Carolina. The article, “Is it really cheaper to live in North Carolina? NCSU economist says …“, looks at cost of living data for North Carolina and has some interesting statistics which could prove beneficial for those looking to invest in North Carolina.

Dr. Mike Walden, a William Neal Reynolds Distinguished Professor and extension economist in the Department of Agricultural and Resource Economics at North Carolina State University, writes how North Carolina as a whole is pretty good for cost of living, “North Carolina is the 19th lowest-cost state in the country, meaning there are 32 states (including the District of Columbia) more expensive than North Carolina.”

One statistics from the article which really jumped out and that could have a profound impact of real estate investments was the difference in “rent for shelter.” Dr. Walden wrote, “in one area – rent for shelter – rural areas really come up big. For the same sized dwelling with the same amenities, rents average 37 percent more in urban North Carolina than in rural North Carolina.”

While the news for the North Carolina metros wasn’t as good as rural areas as far as cost of living, the news was definitely good compared to many metros throughout the country.

Dr. Walden found, “Compared to the national average in prices, Raleigh is four percent under, Durham is five percent less, Charlotte is six percent cheaper, Greensboro is 10 percent under and Winston-Salem is 11 percent less.”

With the lower cost of living across North Carolina metros, it wouldn’t be surprising to see the continued growth of population and increases in rents alongside the growth of the metros.

For rural investors, as these metros grow there would seem to be an upward pressure on rents. A second advantage to owning property along the path of growth could be a long-term development opportunity.

The difficult question is whether with the current lower state of rents in rural areas, whether investors can meet the 1% rule. Also, rural investors need to factor in septic and well costs and issues.