STR in Charleston/North Charleston

[Rob Cassagne]

I'm looking to make my first STR investment purchase in the next few months and am intrigued by the North Charleston area. Does anyone have experience here- regulations, competition, cash flow, etc? The numbers I'm running on some properties look pretty strong, but I'm not overly familiar with the area.

[Patrick Roberts]

Check with Dan Rivers and Mike Savage - theyre the local STR experts.

North Charleston just passed regulation similar to Charleston for STRs if I remember correctly. You have to have a permit and they limit the number of permits. You also have to have at least one dedicated parking space and the manager has to be available 24/7 to be on-site within 30 minutes. In Charleston, I believe the rule is that you have to live on the property as your primary residence unless the property is in an STR overlay district.

I personally know some investors who are starting to struggle a little with occupancy/bookings. This market is somewhat saturated, but there are pockets where STRs are still viable. Dan Rivers will probably have better insight. 

Make sure you account for SC property taxes correctly in your analysis. This is the most common mistake I see investor clients make in this market because there is a huge difference between legal residence and non-legal residence taxes. Also, expect insurance to be significantly higher than other areas of the state and country. I typically use 0.8% of the property value as a starting point, but this will depend heavily on the age of the roof and the structure type and age, as well as deductibles on wind and hail.