BEST Areas for STR in Columbia

[Bradley Snyder]

Hello, 

I am an investor in the Greenville market but been hearing good things about STRs in Columbia. Anyone currently investing in this area?

[David Bergmann]

We own a handful of our own rentals but also manage about 150 STRs in the Columbia market and surrounding areas.  It's what I would describe as a very steady, stable market.  We do not have much seasonality, but do have some minor peaks that occur in Fall during football season and Spring for University related travel.  The University related events can make or break a full year, so you really have to capitalize on Graduation, Parents Weekend, and home football games.  

The market, like many, saw a huge supply bump from 2020-2022, on the order of magnitude of about 100%, which outpaced demand and drove ADRs and RevPAR down.  That supply bump has leveled out since 2023 and in 2024 we are starting to see metrics creep back up, albeit slowly.

On the regulation front, the City of Columbia passed and reasonable regulation for STRs in city limits as of 10/1/2023.  The regulations allow for STRs so long as you get an annual permit ($300) and pay 3% local occupancy tax.  No restrictions or caps on supply, and I don't expect the City to revisit this anytime soon as it was about a 3 year discussion that I think council is happy to put in the rear view mirror.  I believe it's actually a very good regulatory environment now that the permits are in place.

Overall, I expect metrics to continue to improve over the next few years as the demand for STRs continues to grow in our market at a 15% year over year rate.  I think the big question is how much additional supply will come up to meet that demand over the next few years.