Is Charleston, SC a strong rental market?

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Is Charleston, SC a strong rental market?

Stephen Brown
Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes

I'll be going down to Charleston on April 14th and I'd like to meet with a real estate agent while I'm there. Is this city known for short term rentals for vacation purposes? Or is it more of a long term rental market? I'd love to see how other investors are doing here.

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Troy GandeeBusiness Member
Real Estate Broker · Charleston, SC · Member since 2013 · 794 posts · 454 votes
4y

Thanks @Jay Hinrichs.

@Stephen Brown We do have a lot of STRs. However, the regulations in each municipality are very strict and distinct. City of Charleston spans a few different geographic areas and has different "zones" for each. Each zone has different restrictions on maximum number of nights per year. There are also different restrictions for North Charleston, Mt Pleasant, Hanahan, Summerville, etc. The beaches are the most STR friendly, but they're extremely expensive. In general, the inventory in our whole market is extremely low, so picking up an exceptional deal is very challenging right now.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y

    @Troy Gandee    give Troy and his team a ring.. they can help you.

    from my limited experience there.. STR in the downtown Charleston area are very solid investments however are highly regulated so you need proper permits and when you have proper permits those properties sell at a large premium given the income potential.

    We have sold a few of our new build projects to investors and mainly 1031s and I suspect they sold for 3 to 4 caps .. We were the seller.. 

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  • Troy GandeeBusiness Member
    Real Estate Broker · Charleston, SC · Member since 2013 · 794 posts · 454 votes
    4y

    Thanks @Jay Hinrichs.

    @Stephen Brown We do have a lot of STRs. However, the regulations in each municipality are very strict and distinct. City of Charleston spans a few different geographic areas and has different "zones" for each. Each zone has different restrictions on maximum number of nights per year. There are also different restrictions for North Charleston, Mt Pleasant, Hanahan, Summerville, etc. The beaches are the most STR friendly, but they're extremely expensive. In general, the inventory in our whole market is extremely low, so picking up an exceptional deal is very challenging right now.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Troy Gandee:

    Thanks @Jay Hinrichs.

    @Stephen Brown We do have a lot of STRs. However, the regulations in each municipality are very strict and distinct. City of Charleston spans a few different geographic areas and has different "zones" for each. Each zone has different restrictions on maximum number of nights per year. There are also different restrictions for North Charleston, Mt Pleasant, Hanahan, Summerville, etc. The beaches are the most STR friendly, but they're extremely expensive. In general, the inventory in our whole market is extremely low, so picking up an exceptional deal is very challenging right now.

    Ya I think someone from Toledo could get sticker shock in Charleston..  I know I did the first time i went there..  Charleston is a world unto its own when it comes to values compared to the surrounding states areas.  I have been funding flippers in Toledo for many years now and we routinely pick up homes for 10 to 30k each  LOL of course they need reno.. but in Charleston the exact same home would be 300k in the same condition.  

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  • Troy GandeeBusiness Member
    Real Estate Broker · Charleston, SC · Member since 2013 · 794 posts · 454 votes
    4y

    @Jay Hinrichs Definitely. It's extremely expensive here for the South. Especially with wages still being relatively stagnant. It's really accelerated since Covid started. We're just being flooded with transplants from HCOL states who can work remote. Charleston definitely isn't what it used to be. It's still a great place to live, but much of the small town charm is quickly fading. The number of large apartments and condos under construction is pretty shocking for those who have been here for a while. We're busting at the seams. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Troy Gandee:

    @Jay Hinrichs Definitely. It's extremely expensive here for the South. Especially with wages still being relatively stagnant. It's really accelerated since Covid started. We're just being flooded with transplants from HCOL states who can work remote. Charleston definitely isn't what it used to be. It's still a great place to live, but much of the small town charm is quickly fading. The number of large apartments and condos under construction is pretty shocking for those who have been here for a while. We're busting at the seams. 

     Of course Boeing  Volvo  MBZ moving there and spending billions did not hurt.. as well as the number 1 tourist destination in the mid south 

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  • Richard Libutti
    Rental Property Investor / Director of Business Development · Miami, FL · Member since 2018 · 45 posts · 21 votes
    4y

    @Stephen Brown I have a contact in Charleston that you can chat with to see if they are a good fit for one another...I will send you their info via PM now. Very experienced in the area, and they offer half their commissions back on the buy side -- which certainly doesn't hurt. 

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  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    4y

    The food there is good, that I can tell you.

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  • Stephen Brown
    OP
    Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes
    4y
    Originally posted by @Richard Libutti:

    @Stephen Brown I have a contact in Charleston that you can chat with to see if they are a good fit for one another...I will send you their info via PM now. Very experienced in the area, and they offer half their commissions back on the buy side -- which certainly doesn't hurt. 

     Thank you!

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  • Stephen Brown
    OP
    Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes
    4y
    Originally posted by @Jay Hinrichs:

    @Troy Gandee    give Troy and his team a ring.. they can help you.

    from my limited experience there.. STR in the downtown Charleston area are very solid investments however are highly regulated so you need proper permits and when you have proper permits those properties sell at a large premium given the income potential.

    We have sold a few of our new build projects to investors and mainly 1031s and I suspect they sold for 3 to 4 caps .. We were the seller.. 

     Thanks Jay. Good to hear from you again!

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  • Stephen Brown
    OP
    Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes
    4y
    Originally posted by @Troy Gandee:

    Thanks @Jay Hinrichs.

    @Stephen Brown We do have a lot of STRs. However, the regulations in each municipality are very strict and distinct. City of Charleston spans a few different geographic areas and has different "zones" for each. Each zone has different restrictions on maximum number of nights per year. There are also different restrictions for North Charleston, Mt Pleasant, Hanahan, Summerville, etc. The beaches are the most STR friendly, but they're extremely expensive. In general, the inventory in our whole market is extremely low, so picking up an exceptional deal is very challenging right now.

     Thanks Troy for the heads up. I'll talk things over. Are you able to assist if we decide it is worth pursuing?

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  • Troy GandeeBusiness Member
    Real Estate Broker · Charleston, SC · Member since 2013 · 794 posts · 454 votes
    4y

    @Stephen Brown Absolutely. If I can't personally do it, one of our agents can. All of our agents are investors.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Account Closed:

    The food there is good, that I can tell you.

     The food scene is not only good but I venture to say its GREAT !!  

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  • Jake Wiley
    Investor · Charleston, SC · Member since 2022 · 233 posts · 198 votes
    4y
    Originally posted by @Stephen Brown:

    I'll be going down to Charleston on April 14th and I'd like to meet with a real estate agent while I'm there. Is this city known for short term rentals for vacation purposes? Or is it more of a long term rental market? I'd love to see how other investors are doing here.

     The past year and a half have been crazy here in the Charleston area.   There have been a lot of relocations from other even higher-priced areas in the Northeast that have put a lot of pressure on the housing prices and inventory.   

    Like everyone else pointed out, there are a lot of restrictions and regulations on STR all across the large county that is Charleston. The bad news is that finding something STR eligible is not automatic and in many cases you'd have to apply for a permit after you bought, adding a layer of risk, however, you can call ahead of time and understand if permits are available and the property qualifies, so it's not a big gamble.

    On the flip side, the restrictions are a benefit in that it creates scarcity in the STR market, so if you have one it's really good for you.

    It all comes down to the number crunching, as you are competing to buy with some seemingly ridiculous money at times, but persistence and patience pays off. We looked all the way across the country to 1031 into an STR and ended up finding the best deal right down the road in Kiawah because we were the first in the door when it fell out of contract for some simple issues that scared off someone looking for a move-in ready home.

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  • Lisa Beard
    Rental Property Investor · Charleston, SC · Member since 2017 · 39 posts · 12 votes
    4y

    @Stephen Brown we own two STR's on Folly Beach. Folly is very STR friendly, but can be pricey. If you're willing to put some work into a rehab, that's where you will find the gems in today's market. What is great about Charleston from an investor prescriptive is the limited inventory of STR-able homes, which in turn drives the nightly rates up.

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  • Jonathan Schlimme
    Real Estate Agent · Charleston, SC · Member since 2020 · 19 posts · 14 votes
    4y
    As many people have said before the CHS STR market has a lot of rules BUT the fact that the city has made very specific rules is helpful in that you know what your dealing with when you come here - so if you can play by the rules and run a profitable STR you're probably going to have stability for the long term. 

    The CHS market is HOT right now and there are more buyers than inventory - but this city is a great one to visit and draws a TON of visitors - anything that is going to cater to hospitality and tourism is going to do well here long term. 

    If you're here in April hit me up - I'd love to meet with you and talk about the different neighborhoods here and the STR market.  Good luck ! 
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