Where Should I Invest?

So if residential rentals won't produce instant income, where else can I park my money?

Vacant land - buying/holding vacant land doesn't generate income but also doesn't require any oversight, built for long term appreciation (10+ year hold)

Commercial property - Berkeley County has tons of upside and decent cap rates if you can reach the $2M entry level investment. Consider partnering with other investors to share the risk/expense.

Fix & flips - still viable even though margins are much leaner than they used to be. Target newer/concrete slab homes to limit surprise expenses. Since it's a short term hold, you could arrange a private loan from an individual with an existing HELOC (home equity line of credit). If they're paying 7-8% on their HELOC, perhaps they would charge you 10-12% without the down payment, closing costs, and underwriting headache required by a bank loan. Note: This is not a fit for an investor with an already full plate - it's a full time job to manage a renovation project! Be prepared for the skilled labor shortage and supply chain delays to delay the project. B.V. started a renovation in July that should have taken 60 days. Instead, it was 6 months, even with her trusted, repeat vendors involved. Also, beware historic homes that are more expensive and take longer to rehab, especially downtown Charleston.

Rental properties - it's still viable to purchase rentals without immediate cash flow! Home values appreciate and rental rates rise. You may come out of pocket until your mortgage is paid off, but it's a forced savings account that will produce retirement income. Consider buying something with a master BR downstairs in an area you like so you have it as a housing option when it's time for you to downsize. The low supply of rentals is being squeezed by increased demand. Rents are rising 8-10% annually as more buyers "wait" and rent. As rents rise each year, the cash flow issue gets significantly better. If you’re charging $1,500/yr and coming out of pocket $300/mo to float the property, you are likely just two years away from being cash flow neutral.

Invest in the stock market - more liquid than real estate, dividend payouts can serve as cash flow or be reinvested, compounding interest grows your money for you, depressed stocks today offer sizable upside, great for working investors who don't have time to manage a project. Teammate Lauren spent the past 3 years looking to purchase a rental. She eventually abandoned the idea because she felt the low/no cash flow was not worth the headache of ownership. She's decided to stick with the stock market and invest as much as she can now to maximize compounding interest. Her investment is more liquid and her dividend payouts can serve as cash flow or be reinvested. Just remember that the stock market carries more risk. You may lose 3% in a day in the stock market, but it’s unlikely you would lose 3% in a year in the housing market.