Welcome to the ultimate guide to investing in short-term rentals in Charlotte, North Carolina! The most populous city in the fast-growing Tarheel state, Charlotte continues to be a popular destination for real estate investors, especially in the short term rental space. With many diverse demand drivers, including professional sports, museums and a thriving business climate, it’s no wonder the Queen City is a popular spot for short term rentals. This guide will cover recommended investment locations, how to finance STRs with Easy Street Capital’s industry leading STR Loans and the latest updates on rules and regulations for short term rentals in Charlotte, North Carolina! One of the hottest and most popular markets in the United States, it’s also home to a hot button regulatory environment for STR investors. We’ve got you covered with a comprehensive Charlotte STR Guide as well as up to date info on the latest developments in Charlotte and North Carolina STR rules and requirements.
Table of Contents:
Why is Charlotte So Popular for Rentals?
Top Things To Do in Charlotte, North Carolina (STR Demand Drivers)
STR Rules and Regulations in Charlotte, North Carolina
Investing in Short Term Rentals in Charlotte, NC
Property Management for Charlotte, North Carolina Short Term Rentals
Ready to Get Started?
Why is Charlotte So Popular for Rentals?
When choosing where to invest in short term rentals – market matters – a lot! The most important thing in choosing a market is “demand drivers.” What are demand drivers? These are things in the area that drive people to come to visit the city for temporary stints. These are the people that are going to be booking your short term or medium term rental, paying the rents and providing the real estate returns. So its very important to choose a market with consistent and plentiful demand drivers.
Charlotte, North Carolina is a great market for short term rentals for many reasons. For sports fans, it has multiple professional teams in the NFL! Teams include the (Carolina Panthers), NBA (Charlotte Hornets) and MLS (Charlotte FC). With great stadiums and fan experiences, visiting sports fans come throughout the year to visit Charlotte and cheer on their team. Additionally, Charlotte has a number of museums and cultural offerings attracting many visitors as well. The thriving business environment, particularly in the financial sector, also attracts business travelers seeking living arrangements. Finally, Charlotte’s year-round temperate climate makes it one of the least seasonal large STR markets in the country. The city provides a steady stream of visitors year-round and relieves the risk of consolidated “busy seasons”.
Top Things To Do in Charlotte, North Carolina (STR Demand Drivers)
Heart of American Racing: Charlotte’s Car Racing Attractions
Charlotte is the center of the Motorsports Industry in the United States. With many auto racing fans in the country and especially concentrated in the southeast, short term rentals focused on attracting visitors interested in motorsports is a popular strategy. Especially considering many motor racing enthusiasts live in proximity to Charlotte , and make up a strong potential market segment for affordable vacationers.
Two must-see destinations for any racing fan are the NASCAR Hall of Fame and the Hendrick Motorsports complex (located in nearby Concord). The Hall of Fame is an interactive museum that celebrates the history of NASCAR, offering engaging exhibits and artifacts. Meanwhile, the Hendrick Motorsports complex houses four NASCAR Cup Series teams and features a state-of-the-art facility.
However, the crown jewel of Charlotte attracting motor sports enthusiasts is Charlotte Motor Speedway. Located in Concord, just outside of Charlotte, the speedway is home to a variety of racing events throughout the year. Events include the NASCAR Cup Series races like the Coca-Cola 600 and the Bank of America ROVAL™ 400. The track also features a state-of-the-art drag strip, a four-tenths-mile clay oval, and a 1.5-mile superspeedway. Charlotte Motor Speedway continues to be a top destination for racing enthusiasts and a significant economic driver for the region.
Check Out These Fan Tips for Getting the Best Experience on Raceday at Charlotte Motor Speedway
Sports Sports Sports
In addition to motor sports, Charlotte is also home to several professional sports teams, including the Carolina Panthers (Football), Charlotte Hornets (Basketball), and Charlotte FC (Soccer). Charlotte FC, while a new franchise in a growing league, has drawn praise for creating stunning success in attracting fans and visitors. Despite the smaller size of the stadium, the still-developing popularity of professional soccer in the United States, and the challenges of a new franchise, Charlotte FC has knocked it out of the park through a lauded fan experience. This authenticity has driven many people in the region to swarm to the Queen City to visit and experience it for themselves.
Attracting a significant number of sports fans to the city, many seek comfortable and convenient accommodations during their visit. By offering short-term rentals in prime locations near venues, investors can capitalize on demand and generate impressive rental income.
In addition to professional sports, Charlotte hosts numerous college sports events, such as the annual ACC Men’s Basketball Tournament. The ACC tournament has a long history of attracting large crowds of fans. In recent years, the tournament has seen an average attendance of over 100,000 fans. The 2019 tournament in Charlotte, for example, had a total attendance of 123,000 over the course of the event.
This tournament generates significant economic impact for the host city. The Charlotte Regional Visitors Authority estimated that the 2019 tournament had an economic impact of $15 million for the city. This includes spending on hotels, restaurants, transportation, and other tourism-related activities.
Charlotte Museums – An Underrated Cultural Paradise
While Charlotte may not come to mind when thinking about desirable cities for museums and culture in America, that should change soon. Charlotte is home to several museums featuring arts, culture and history that attract visitors from throughout the southeast.
The Mint Museum is a must-visit for art lovers. With two locations in the city, the Mint Museum boasts an extensive collection of American, European, and contemporary art. The Mint Museum offers a renowned craft and design collection. Hosting a variety of events and exhibitions throughout the year, makes it a perfect destination for art enthusiasts of all ages.
For history buffs, the Charlotte Museum of History is a fascinating destination. The museum is home to the Hezekiah Alexander House, the oldest surviving structure in Mecklenburg County. The museum offers a range of exhibits and programs that explore the rich history of the Charlotte region.
There are also museums for tourists interested in science and technology. The Discovery Place Science Museum is an interactive and engaging destination. With hands-on exhibits and live demonstrations, the museum offers a fun and educational experience for visitors of all ages.
Check out The Ultimate Guide to Museums in Charlotte by CharlottesGotALot.com!
STR Rules and Regulations in Charlotte, North Carolina
With all of the recent growth in North Carolina in recent years, in Charlotte and other enticing destinations such as Asheville and the Outer Banks, its no surprise that the state has been on the forefront of the development of short term rental rules and regulation.
In response, everybody wanted to know Is Charlotte Airbnb friendly?
Generally, the answer is Yes. Charlotte has some clear and followable rules and regulations for STRs, an overview of which includes:
Registration: Properties utilized as short term rentals are generally required to register with the city. This allows strong communication between Charlotte STR investors and the city, including police. This system can help smooth things over whenever there are any issues. The city government maintains a free and easily accessible link here to register your Charlotte Short Term Rental.
Business License: Charlotte also requires anyone operating a short term rental to obtain a business license. However, the application and license process is relatively easy and transparent. The city doesn’t have an antagonistic attitude toward STR investors that some other cities have. You can check out the STR business license requirements (and the rest of the relevant city code) here.
Some STR Business Requirements in Charlotte, North Carolina include:
- Business Bank Account (separate from personal)
- Registration of the STR Business with the County Tax Assessor
- A specific Employer Identification Number
Its recommended to consult a professional regarding the proper setup and operation of a STR business in Charlotte.
Occupancy Limits: Charlotte requires occupancy in vacation rentals in the city to have no more than two people per bedroom (plus two additional persons).
Change and Developments in Charlotte Short Term Rental Rules
Since short term rentals is still a nascent industry, change in STR rules and regulations in North Carolina is always ongoing. In 2023, a bill was proposed in the North Carolina Senate that would overrule short term rental regulations by city. This would grant property owners greater freedom for short term rentals. Additionally, allowing more options for visitors, important in a climate of high inflation and increased travel costs.
To track the status of North Carolina Senate Bill 667 “Regulation of Short-Term Rentals” – the public can follow along at this page.
In 2022, there was also an initiative by the City of Charlotte to add additional STR regulations in the city. However, WCNC Charlotte noted, that initiative was put on pause and no imminent changes appear on the horizon.
Investing in Short Term Rentals in Charlotte, NC
For a market as large and popular as Charlotte, knowing the numbers and niches is very important. As every successful short term rental investor knows – underwriting and running numbers on an investment is key to success.
Two of the most important aspects of evaluating vacation rental investment is understanding and projecting revenue (income) and expenses. The majority of expenses is often the cost of a STR loan. Below, we’ll provide recommendations on how to tackle each to be a short term rental investing pro!
Revenue Projections
An exciting development in the short term rental investing space has been the explosive growth of accessible data for investors. Companies such as AirDNA and Rabbu continue to provide high-level actionable data for investors evaluating short term rental markets.
Key Metrics for every short term rental investor in evaluating revenue (earnings) from STRs include:
Occupancy Rate: The percentage of days per year the STR will have guests (generally assuming market rates are charged)
Average Daily Rate: The average price of a days’ stay at the property
RevPAR (Revenue per Available Room): A common metric for hotels, this multiplies the occupancy rate
and the ADR to get a total expected earnings over a year
Utilizing these metrics are key to evaluate the revenue potential of short term rentals. For short term rental projections in Charlotte, North Carolina – AirDNA (as of March 2024) provides great information. AirDNA is a great resource for this since it directly connects to actual performance data and can often give estimates and track changes in near real-time.
As of March 2024, AirDNA gives the following metrics for Charlotte Short Term Rentals:
Market Score: 67 – this is determined to be a “good” rating and balances all of the overall market factors
Seasonality Score: 90 – this shows that Charlotte is one of the highest-rated markets in terms of seasonality. Due to year-round events and the temperate climate, Charlotte has stable occupancy rates throughout the year, so the risk of “seasonality” and low-volume months is lower in Charlotte than nearly all other markets. For STR investors that value stability (and thus not seasonality), the Queen City is a great choice!
Average Daily Rate: $196 – while this rate is generally lower than average, it reflects the wide range of visitors (including middle and working class visitors) that come to Charlotte. It also suggests that a solid affordable option would be a strong strategy for investing in short term rentals in Charlotte.
A well-located and large market (15th most populous city in the United States as of the 2020 census) near many population centers in the fast-growing state of North Carolina. Similarly growing states such as Virginia, Tennessee and Georgia – Charlotte is a great “drivable market” for visitors in the southeast. Visitors from the east coast can sit back and relax on a quick flight to this rapidly growing city.
Expense Projections
The most consequential expense for STR investors is the financing cost – typically the monthly payment of principal and interest to the lender financing the property. Many investors in short term rentals cover the vast majority of the investment with a loan. It is common to utilize only around 20%-30% for a down payment. Thus, its very important to get the best rates and terms on financing the STR to make sure the returns are worth it.
When financing a short term rental in Charlotte, there are several options. These can include loans from traditional lenders, such as banks, credit unions and “conventional” (i.e. Fannie Mae / Freddie Mac) lenders. However, counting on traditional loans can be a big mistake for STR investors. Short term rentals are still a new and rapidly changing asset class, lenders that are flexible around STRs can be very valuable. Utilizing a lender that understands and embraces short term rentals is often key.
Unlike most lenders offering loans on short term rentals, Easy Street Capital embraces the unique aspects of short term rentals. Options to qualify based on projected STR gross receipts, from cutting-edge data sources such as AirDNA – can make or break success in STR. For more information, FAQs and free projected numbers for any potential STR address in Charlotte, North Carolina, check out our short term rental lending program resource page here!
In addition to making sure your lender can qualify the loan based short term rental realities, utilization of advanced strategies to get the best rates and terms can be key to getting the best returns.
Property Management for Charlotte, North Carolina Short Term Rentals
One major decision many short term rental managers face is self-managing their properties or hiring a property management company. There are many pros and cons for each alternative.
Pros of managing your own short term rental include saving management fee expense, more control of the guest experience and obtaining valuable expertise through experience. However, there are downsides. By not hiring a STR management company, you are committing significant time to ownership. This can prevent scaling a portfolio and cause a lot of stress and excess workload. Additionally, top management companies can know the ins and outs of the market and add value and revenue from their local expertise. Finally, if you’re located in near Charlotte, you would miss out on this market if needing to manage yourself!
Thankfully, Charlotte is home to several property management companies well equipped to successfully manage short term rentals. According to AirDNA, here are the top options for investors looking to utilize STR property management:
Broad Connection Property Management
A short term rental management company focused on the Greater Charlotte area. Per AirDNA, their average review rating is a 4.78/5, with 2,175 reviews as of March 9, 2024. Showing 42 listings in Charlotte alone and 16.7% over the last year (metrics also provided by AirDNA) its clear that Broad Connection has a great track record with investors.
Check out this article by Broad Connection on How to Make Rentals More Energy Efficient!
A+ Accommodations
A property management company focused on North and South Carolina and headquartered in Charlotte. Providing extensive short term rental management they have a tremendous average review of 4.86, tops in the Charlotte market per AirDNA. A+ Accommodations also focuses on the fast growing area of Medium Term Rentals . For investors that are embracing this strategy (perhaps for the robust corporate MTR market), this company could be a strong choice.
Nolan Premier (Shane Nolan)
An individual real estate professional with a thriving property management business as a verified Airbnb “Superhost”! AirDNA shows him as a Top 5 Charlotte STR property manager. Nolan Premier has over 30 listings and a 4.83 average review (over 2,000 reviews) as of March 2024. Further, this is a growth in listings of 65% in just a year, showing a balance of tremendous growth without a drop in quality.
Ready to Get Started?
Have your eye on purchasing a short term rental investment property in Charlotte? Easy Street Capital is America’s best lender for short term rentals – see options below to explore financing options!
Disclaimer: The information provided in this article is not intended as financial or legal advice of any kind. Regulations regarding short-term rentals are subject to change and all investments are subject to risk. Information included in this article may contain information that has not been verified by licensed attorneys and should be subject to independent verification. Readers are advised to consult with qualified legal or financial professionals prior to investing in real estate investment properties.
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