Real Estate investors looking for cash flow and financial freedom are flocking to South Carolina to build rental property portfolios. The Palmetto State is a current favorite of real estate investors due to many factors. These include a strong and stable economy, low vacancy rates and steady demand for rental housing due to a fast-growing population! According to the World Population Review, South Carolina ranked in the top three states for population growth in 2024! Yes, that’s population growth higher than Texas, Florida and neighboring North Carolina. Easy Street Capital is proud to be a leading provider of investment property loans in South Carolina!
Types of Investment Property Loans in South Carolina
There are many markets and types of investment property loans in South Carolina for investors to choose from. For investors that like to get their hands dirty, rehabbing run down properties, hard money renovation loans are a perfect choice! These loans allow you to buy a property quickly and finance your rehab costs as well! Once you are done, you can either “flip” the property for a quick profit or pursue the BRRRR Strategy by renting it out and then refinancing into a long-term, low-rate DSCR loan!
Long-term DSCR loans offer excellent investment opportunities for individuals seeking to invest in turnkey rental properties. “Turnkey” properties are those that are ready for immediate occupancy and require no renovations. They are typically single-family homes that are fully furnished for either short-term or medium-term rentals, and are ideal for generating cash flow and potential price appreciation.
DSCR Loans are typically offered at fixed interest rates for thirty years, which provides long-term stability to investors. Given the steady increase in rental income and property appreciation over time, this fixed interest rate is beneficial in keeping the cost of debt constant while the cash flow increases over time. This makes it an attractive investment strategy for those seeking long-term financial stability.
South Carolina is a great state for investing in rental properties due to its friendly tax regime. While investors utilizing rental loans nationwide are familiar with the tax benefits of smartly using debt to take advantage of interest deductions, investing in South Carolina offers additional tax benefits. South Carolina has a relatively low property tax rate compared to other states at 6%. Additionally, South Carolina offers several tax credits for rehabilitating historic properties, which BRRRR method investors can take advantage of. Property owners who rehabilitate a historic property may be eligible for a tax credit worth up to 25% of the renovation costs.
That being said, it’s important to note that tax laws can change. The specifics of these incentives may vary depending on the location and type of property you are investing in. It’s always a good idea to consult with a tax professional before making any investment decisions.
Where To Invest In Real Estate In South Carolina
South Carolina is a great market for real estate investment properties because of the diverse options. The state offers great potential for each type of real estate investor and strategy. Charleston is a popular tourist destination as well as the largest city in the state. When combined with North Charleston, the city has a population of over 250,000. Columbia is the state’s second largest city, capital and home to the University of South Carolina. Greenville is a growing secondary market that’s very well-located, approximately halfway between Atlanta, Georgia and Charlotte, North Carolina along Interstate 35. Myrtle Beach is a well-known beach vacation town that’s great for short term rentals. Spartanburg is a smaller city, but one with a growing economy in the rapidly growing Upstate region. Each of these markets in South Carolina can be great for investors utilizing rental loans to secure investment properties!
Charleston/North Charleston
Charleston and North Charleston are home to a diverse range of industries, including healthcare, aerospace, and manufacturing. They have low unemployment rates compared to the national average. According to the US Census Bureau, the population of Charleston and North Charleston grew by 11.7% from 2010 to 2020, which is higher than the national average, making them two of the fastest growing cities in the country.
Charleston and North Charleston are also popular tourist destinations, with attractions such as historic sites, beautiful beaches, and world-renowned cuisine. Charleston is known for its charming historic district, plantations, and Fort Sumter. North Charleston has attractions like the Riverfront Park and the North Charleston Coliseum. Both cities are also popular for group trips as top destinations for weddings, bachelor and bachelorette parties, and corporate retreats.
According to the Charleston Area Convention & Visitors Bureau, the area attracts over 7 million visitors annually, and the tourism industry generates approximately $10 billion in economic impact each year. This makes Charleston and North Charleston attractive for real estate investors interested in short-term rentals and vacation homes.
AirDNA, a leading data analytics firm for short term rental investors, gives Charleston a nearly perfect Market Score of 98/100 ! It gave the growing market a “investability” score of 92/100 and rental demand score of 73, both top marks in their methodology. Per AirDNA, the city has a great ratio of average revenue ($85,400) versus typical home value ($554,149). For investors that utilize low down payments through financing options such as DSCR Loans, the cash-on-cash returns can be very high versus other markets!
Columbia
Columbia, South Carolina is the capital city of the state and home to the University of South Carolina, a prestigious research institution with over 35,000 students enrolled. The city is also a cultural hub, with a thriving arts scene, numerous museums, and a lively downtown area. With a population of over 135,000 residents, Columbia is the largest city in South Carolina’s Midlands region.
Columbia presents a great opportunity for real estate investors who specialize in student housing. The university’s large student population provides a consistent demand for rental properties in close proximity to the campus. Investors who focus on well-located properties and rent to reliable students can earn higher returns than with traditional long-term rentals.
In addition to student housing, Columbia is a popular destination for short-term rental investors. The city hosts a number of events throughout the year, such as the South Carolina State Fair and the Columbia International Festival. Additionally, the university’s strong athletic programs, including football, basketball, and baseball, draw in large crowds for game day weekends. These events provide an excellent opportunity for investors to capitalize on short-term rental demand and earn higher rental income.
Greenville
Greenville, South Carolina is a thriving city in the Upstate region with a population of over 70,000 residents. The city has a diverse economy, with industries such as healthcare, education, and manufacturing playing key roles. Greenville is home to many cultural attractions, including the Greenville County Museum of Art and the Peace Center for the Performing Arts. Its vibrant downtown area has many shops and restaurants that attract both residents and visitors.
Investors in Greenville can take advantage of the city’s fast growing rents. According to the Zillow Observed Rent Index April 2024, the average market rent in Greenville is $1,785 per month. Additionally, the latest US Census estimates a very strong median household income of $71,328. Thus, Greenville has a strong renter base that can afford the increasing rents. This means rental property investors in Greenville will likely see continued increases in cash flow and low vacancies.
Real estate investors in Greenville can also take advantage of both long-term and short-term rental demand. The city hosts several events throughout the year, such as the Greenville Scottish Games and the Fall for Greenville festival, which bring in visitors and provide a great opportunity for short-term rental income. Additionally, Greenville’s location near major metropolitan areas such as Charlotte and Atlanta offers a prime opportunity for investors looking to get in on a growing market.
Myrtle Beach
Myrtle Beach, South Carolina is a charming coastal city known for its stunning beaches, parks, and outdoor recreation opportunities. Its downtown area is home to a thriving arts and entertainment scene, with numerous theaters, galleries, and museums. Myrtle Beach is also a popular destination for outdoor enthusiasts, with activities such as fishing, boating, and hiking in the nearby Myrtle Beach State Park.
The unique blend of culture, natural beauty, and outdoor recreation makes Myrtle Beach an attractive location for short-term rental investors. Visitors come from neighboring cities, such as Charlotte and Atlanta, for weekend getaways and longer vacations. Rental rates remain steady throughout the year, with peak seasons during the summer months. Additionally, the city hosts various events, including the Myrtle Beach Bike Week and the Carolina Country Music Fest. These bring in even more visitors and potential rental income.
According to AirDNA, a leading data provider for investors in short-term rentals, Myrtle Beach is a good market for 2024. It has a rating of 79/100 on “investability”, making it one of the best places to invest in vacation rentals. Investors can expect annual revenue of $41,000, a high amount when compared to the median sale price of a home of $285,000 as of March 2024 per Redfin! Investors who use DSCR loans from a forward-thinking lender like Easy Street Capital, which qualifies the income of the property using AirDNA projections, can likely earn a high cash flow.
Spartanburg
Spartanburg, South Carolina is located in the Upstate region of the state. With a population of just over 38,000, it is a solid secondary market for real estate investment. The city is home to several large employers, including Spartanburg Regional Healthcare System and BMW Manufacturing, which provide a stable employment base for the area.
Spartanburg is a good market for investment properties with less competition than other better-known cities in the region. With a rich history and several demand drivers, such as the Spartanburg Art Museum and the Hub City Railroad Museum, the city offers unique investment opportunities. Spartanburg real estate is extremely affordable, making it a great option for real estate investors building a portfolio off the beaten path.
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Ready to invest in real estate in South Carolina? Easy Street Capital is South Carolina’s best provider of rental loans for both hard money rehabs and long-term rental properties.
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