South Carolina's growing cities have small apartment buildings near campuses, downtowns and military bases. For investors, the property tax treatment of rentals is one of the biggest differences from owning the home you live in, and it shows up directly in the ratio.
In short: You can finance a 5 to 8 unit building in South Carolina with a LendingStreet DSCR loan that qualifies on rent, from $150,000 with no stated maximum and 30-year terms available. The rent has to cover principal, interest, taxes and insurance at 1.0x on standard programs, and sub-1.0 programs exist. In South Carolina, rentals are assessed at a higher ratio than homes their owners live in, and coastal wind insurance is costly, so those two lines decide most files.
Columbia has small buildings in Shandon, Rosewood and Olympia near the University of South Carolina, and near Fort Jackson. Greenville has small complexes near downtown and in older neighborhoods such as the West End and North Main, and Spartanburg has similar stock near Wofford and Converse.
In the Lowcountry, Charleston, North Charleston and Summerville have small buildings, with peninsula Charleston priced high and North Charleston more moderate. Rock Hill, Florence, Aiken and the Grand Strand around Myrtle Beach have occasional buildings, some tied to tourism.
| Area | Typical buildings | What to check |
|---|---|---|
| Columbia | Student and military-oriented buildings | Lease cycles, turnover |
| Greenville, Spartanburg | Small complexes | Roof, HVAC |
| Charleston area | Older buildings | Wind and flood insurance |
Start with the rent roll. Add the in-place rent for each unit and, for any vacant unit, a market rent the appraiser can support. Then divide by the full payment, including taxes and insurance. That ratio needs to be 1.0x or higher on standard programs.
Utilities the owner pays, such as common-area electric, water, sewer and trash, are not part of the DSCR payment on most programs, but they are part of your real cash flow. Budget for them separately so the deal still works after the loan closes, not just on the term sheet.
Leverage on 5 to 8 units varies by program and is often below the 80% purchase maximum available on smaller rentals. Cash-out refinances go up to 75% LTV, and seasoning rules vary. If the ratio comes in short, lowering the loan amount or using a sub-1.0 program are the usual fixes.
| Term | What to expect |
|---|---|
| Property type | 5 to 8 unit residential rental |
| Loan amount | From $150,000, no stated maximum |
| Purchase LTV | Up to 80% on some programs; often lower on 5-8 units |
| Cash-out LTV | Up to 75%; varies by program |
| Minimum DSCR | 1.0x standard; sub-1.0 programs exist |
| Credit score | 620 minimum |
| Income documents | None; qualifies on rent |
| Borrower | LLC standard; sign for the loan personally |
South Carolina assesses most rental property at 6% of value, compared with 4% for a primary residence, and investors also do not get the owner-occupant school tax relief. The result is a much higher tax bill on a rental than on the same property used as a home. If the seller lived in part of the building, the next bill may jump.
South Carolina charges a deed recording fee at sale, customarily paid by the seller. Buyers pay title, recording, appraisal and lender costs. Ask your title company for the split.
Coastal counties, including Charleston, Beaufort, Georgetown and Horry, face hurricane and wind risk, and premiums there are much higher than inland. Many policies carry separate hurricane deductibles. Check flood maps early, since flood coverage, if required, counts in the ratio.
Inland, insurance is more moderate, though severe storms and hail do occur in the Upstate and Midlands. Ask for the roof age and claim history on any older building.
This example is illustrative and not a quote. An investor buys a Columbia six-unit building near USC for $760,000. Each unit rents for about $1,150 a month, so gross rent is $6,900. Property taxes are budgeted at $800 a month and insurance at $375. The owner also pays about $300 a month in utilities and common-area costs, which affect cash flow but are not part of the DSCR payment.
At 75% LTV the loan is $570,000. On 30-year amortization, principal and interest is about $3,986, so the payment with taxes and insurance is about $5,161 and the DSCR is about 1.34x.
That clears the 1.0x standard minimum. After the owner-paid costs, about $1,439 a month is left before vacancy, repairs and management, which is why a realistic expense budget matters as much as the ratio.
| Item | 75% LTV |
|---|---|
| Purchase price | $760,000 |
| Gross monthly rent | $6,900 |
| Loan amount | $570,000 |
| Principal and interest | $3,986 |
| Property taxes | $800 |
| Insurance | $375 |
| Monthly payment (PITI) | $5,161 |
| DSCR | About 1.34x |
South Carolina does not allow local rent control, so rents follow the market and lease terms. The state Residential Landlord and Tenant Act sets rules for deposits, notices and entry, and evictions move through the magistrate courts.
Charleston regulates short-term rentals by zone, and Myrtle Beach and other beach towns have their own rules. Most 5 to 8 unit buildings are underwritten on 12-month leases.
Population growth in Greenville, Charleston and the suburbs around Columbia supports rental demand, and new small buildings are rare. Military and university demand in Columbia and Sumter adds stability.
The tax treatment is the biggest local factor. Always budget on the 6% assessment, not the seller's bill, and confirm the number with the county assessor before you set your offer.
Most delays on small apartment loans come from missing items. Start with these.
Our investor loans are business-purpose loans on non-owner-occupied property. Tell us about the building: address, unit mix, rents, taxes, insurance and the loan you have in mind. We will run the numbers, flag any local issues that could affect the file and give you options. Fill out the form below or call (877) 298-1001.
Nine or more units is commercial financing, covered on our multifamily loans page.
Rentals are generally assessed at 6% of value, compared with 4% for a primary residence. If the seller lived there, expect the bill to rise.
If the building is in a mapped flood zone, flood insurance is generally required, and the premium counts in the ratio.
Check local STR rules first. Most 5 to 8 unit buildings are financed on 12-month leases.
No. State law does not allow local rent control, so rents follow the market.
Vacant units can often be counted at a market rent the appraiser supports, but some programs want a minimum number of units leased. It varies by program, so tell us about vacancies up front.
On our programs, 1 to 8 units is residential, so 5, 6, 7 and 8 unit buildings qualify for a DSCR loan on rent. Nine or more units moves to commercial financing.
Purchase loans go up to 80% LTV on some programs, but 5 to 8 unit buildings and larger balances often get less. Plan for 20% to 30% down plus reserves, depending on the program and the ratio.
No. The loan qualifies on the building's rent. You need a 620 or higher credit score, reserves and entity documents if you buy in an LLC.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.