Top 5 South Carolina Markets for Investing in Real Estate Property

Finding the best spots for investing in rental property can vary depending on your goals and investment strategy. Rental properties in South Carolina have a lot to offer from prime short-term rentals in beach towns to thriving buy-and-hold homes in popular cities.

It’s important to note that investors have different motives when considering which markets to invest in. Factors such as cash flow, appreciation potential and tax benefits contribute to whether a borrower will invest in a certain area. If you are considering investing in South Carolina rental property, we suggest figuring out your long-term financial goals before moving forward.

Between 2021 and 2022, South Carolina experienced a population increase of 1.7%, positioning it as the ninth state with the most rapid growth in 2022. It also ranked third in terms of absolute population growth. The presence of comparatively lower purchase and rental prices in other rising states makes it an appealing choice for buyers and investors. The growing population and lower barrier to entry costs are helping drive up demand for real estate, putting rental property owners in a favorable position.

Population growth also means more opportunity for new construction. People need places to live, which makes South Carolina a promising location for investors looking at a build-to-rent model. Diversity of industries and property types exist throughout the state, making it appealing to families and vacationers alike. Tourism, job opportunities, luxury homes and affordable single-family apartments are spread out across the state.

As of May 2023, the median home value in South Carolina is around $150,000, which is considerably lower than the national median home value of approximately $204,000. In tandem with a higher appreciation rate over the last decade, these stats make the South Carolina market particularly attractive to investors searching for the best overall returns on rental properties.

In this blog, we’ve researched the best cities and towns to invest in South Carolina rental property. Taking factors like average rent price, population growth, and short-term tourism into account, we’ve got you covered for your next South Carolina real estate investment.

Charleston

Charleston and its surrounding areas offer a wide range of rental properties for positive cash flow, making it number one on our list. The city’s economy has grown significantly, especially since large-tech, healthcare, and life science companies have planted infrastructure in the area.

The median home value is currently $422,836 with a property appreciation rate of 23.9%. This suggests the return on investment for a property in Charleston, South Carolina will have a significant value increase over time.

Infrastructure in Charleston supports Google’s data center, Daimler’s manufacturing operation, enterprise-class data center services and disaster recovery businesses. This means rental property value appreciation around these businesses will remain consistent due to the economic growth and desire for employees to live close to their place of work.

Charleston’s construction landscape is also extremely diverse. From waterfront homes to downtown condos and apartments, it checks a lot of boxes for multiple living communities. A wide range of properties in one city can be a gold mine for real estate investors, as it entices several types of potential tenants and increases the likelihood of ensuring your property remains occupied.

Finally, Charleston’s rich history makes it an ample vacation destination, benefiting short term rentals like Airbnb or Vrbo. With seven million tourists per year due to attractions like monuments, historic sites, and beaches close to the city are more reasons why investing in rental property in Charleston is the best overall value and first on our list.

Greenville

Greenville, South Carolina comes in at a close second for the best rental market for real estate investors. This is because the barrier to entry for investing in property here is economically reasonable. The cost-of-living index is an appealing 89.9, which is 10.1% lower than the national average. This means that necessity expenses in Greenville are relatively more affordable compared to the U.S. average.

As an investor, this is promising for the return on investment as people’s budgets for monthly rent will stretch further. The Greenville population trends among the top 20 U.S. cities that saw the most growth in 2021, increasing the need for rental properties to house the influx of new residents.

According to data from January 2023, the median home value is $307,000 with a property appreciation rate of 24%. This means the value of your Greenville investment property is on-pace for consistent growth, allowing you the flexibility of selling the property for a profit down the road.

It helps that in 2021, Greenville was lauded as one of the best cities in the United States. Conde Nast Traveler readers praised Greenville for its food, farm-to-table, and beer scene. Rent prices are estimated to continue to rise in the area for the foreseeable future. With a median rent price of 18% this past year to over $850 per month, rising rent in Greenville is an exceptional reason to invest.

Hilton Head Island

When it comes to short-term rentals, Hilton Head Island stands out as one of the priciest real estate markets in South Carolina. The island’s coastal communities are highly sought-after, offering a great investment opportunity with excellent returns. With a median home value of $505,000 and a property appreciation rate of 32.4%, consistent investors in this area report a 9-10% return on investment from their rental properties. Hilton Head Island’s seasonal popularity makes it an ideal location for rental property investment.

The allure of Hilton Head Island lies in its top-notch golf courses, vibrant art scene and upscale dining and shopping options, making it a preferred destination for visitors. The competitive rental market driven by the island’s desirable amenities and vacation lifestyle further enhances the potential for favorable returns for real estate investors.

Properties in Hilton Head Island are relatively stable and consistent, frequently generating positive cash flow and covering expenses that the investment needs. It is important to strike when the iron is hot for real estate in Hilton Head Island because of how valuable the potential on return can be. High seasonal rental demand makes this area a great option for Airbnb and short-term rental investors.

Columbia

If you’re looking for a renovate-to-rent investment strategy rather than purchasing turnkey property, then Columbia should be your focus in South Carolina. As the second largest city and the state capital, Columbia offers one of the most affordable investment markets in the state.

Columbia is attractive for history buffs, art enthusiasts, and families alike offering historic charm to modern amenities throughout the city. As of June 2023, 2-Bedroom apartments are the most common rental properties in Columbia. Over the past month, the average rent for a 2-bedroom apartment increased by 4% to $1250.

Additionally, the University of South Carolina is the largest institution in the state. Located in the heart of Columbia, 70% of students live off campus. This makes rental properties in Columbia South Carolina an ideal real estate opportunity for investors.

With a high foreclosure rate and low property price, it allows for flexibility in negotiation and presents opportunities to add value to the market. The median home value in Columbia stands at $240,445 and with over 50% of households being rented rather than owned, the city attracts a range of tenants.

Over the past decade, Columbia has experienced impressive population growth, with a 5.7% increase in the city and its surrounding suburbs. The city’s low cost of doing business further piques the interest of investors looking to engage in property rehabilitation. Asset Based Lending offers hard money loans to new investors looking to start their rental property journey, and that includes fix-to-hold.

Greenwood

Finally, the hidden gem of Greenwood is making its mark on our list. Over the past decade, Greenwood has experienced an annual average population growth of 0.14%. Residential property prices have been increasing by 0.49% annually, while rental property prices have seen a growth of 1.25%.

This city is only a few miles from Lake Greenwood, which has 212 miles of shoreline and spans 11,000 acres. Buyers and visitors come for recreation like hiking, boating, and fishing. This inexpensive market with great potential makes investing here an appealing project.

As of May 2023, 56% of households in Greenwood, SC are renter-occupied. With an average rent of $967 for a 902 square foot property, it is an extremely affordable space and attracts outdoor vacationers for a strong potential rental profit.

The median home value in Greenwood is currently $158,000, with a property appreciation rate of 15.1%. This suggests ample opportunities for both investors and homeowners to benefit from value growth, Moreover, Greenwood presents a promising return on investment for short or long-term rental properties in the area. If you are interested in permanent refinancing or cashing out on rental properties, check out our different loan programs.

In review,

To achieve success in your South Carolina rental property investment, it is crucial to carefully consider your real estate goals. Additionally, factors like risk tolerance and market research are essential during your real estate journey. Asset Based Lending can help you receive rental property financing in 20 days or less and answer any questions you may have about the lending process. Key highlights to consider when choosing your next rental property investment are an area’s job growth, population trends, rental demand, and property values. It’s important to make informed decisions when moving forward on a long-term investment strategy, and ABL is able to steer you in the right direction!

South Carolina stands out with its diverse cities, strong economy, attractive lifestyle, and growing population. These factors collectively create immense opportunities for financial success in the state’s real estate market. By taking these aspects into account, you can position yourself for a rewarding investment experience.