The single most common mistake on a Columbia rental is using the seller's tax bill. South Carolina taxes a home its owner lives in at a 4% assessment ratio and a rental at a 6% assessment ratio, and owner-occupants also skip most school operating millage. Your bill as a landlord can be several times what the seller paid.
In short: LendingStreet offers DSCR loans on 1-8 unit rentals across the Columbia metro, including Richland and Lexington counties and nearby Kershaw County. Loans start at $150,000 with no stated maximum, go up to 80% LTV on a purchase and 75% on a cash-out, and qualify on the property's rent with a 620 minimum credit score, no W-2s or tax returns and LLC borrowers allowed. The standard minimum DSCR is 1.0x, and we run it on a landlord's tax bill, not the seller's.
Columbia's rental demand comes from several steady sources: the University of South Carolina, Fort Jackson, state government, the Prisma Health and Lexington Medical Center systems and a large insurance and services employer base. Each one pulls tenants toward different parts of the metro.
Close to downtown, investors buy older bungalows and cottages in Shandon, Rosewood, Melrose Heights, Earlewood, Elmwood Park and Cottontown, and small multi-unit properties near USC. Lexington County suburbs such as Lexington, Irmo, Chapin, West Columbia and Cayce draw families with newer homes and well-regarded school districts. Northeast Richland, around Blythewood and the Killian Road corridor, and Forest Acres serve commuters and military families, and Elgin in Kershaw County is a growing edge.
| Area | Typical rental | Watch for |
|---|---|---|
| Shandon, Rosewood, Melrose Heights | 1920s-1950s bungalows and cottages | Older systems, crawl space moisture |
| Near USC and Olympia | Duplexes, mill houses, small buildings | Occupancy limits, school-year leasing |
| Irmo, Lexington, Chapin | Newer single-family in subdivisions | HOA leasing rules, school district |
| West Columbia, Cayce | Single-family and duplexes | Flood zones near the rivers |
| Northeast Richland, Blythewood | Newer single-family | Distance to Fort Jackson and I-77 jobs |
| Forest Acres | Mid-century single-family | Separate city services and rules |
South Carolina property tax is the assessed value times the assessment ratio times the local millage. A primary residence that qualifies for the legal residence special assessment uses a 4% assessment ratio. Other residential property, including rentals, uses a 6% assessment ratio. Owner-occupied homes are also exempt from school operating millage, which is often the largest part of the levy. The combined effect is that a rental's tax bill can be far higher than the bill on the same home when its owner lived there.
Pull the property's record from the Richland or Lexington county assessor and treasurer, and ask your closing attorney to estimate the bill at the 6% assessment ratio with full millage. That is the number we use in the DSCR.
This example is illustrative and not a quote. An investor buys a three-bedroom home in Irmo for $265,000 that will lease for $1,950 a month. The seller, who lived there, paid about $120 a month in taxes. At the 6% assessment ratio with full millage, the investor budgets $310. Insurance is $125 and HOA dues are $25.
At 80% LTV the loan is $212,000, with estimated principal and interest of about $1,482. Using the seller's tax bill, the payment would be about $1,752 and the DSCR about 1.11x. Using the realistic tax figure, the payment is about $1,942 and the DSCR is about 1.00x. At 75% LTV, the loan is $198,750, the payment is about $1,850 and the ratio is about 1.05x.
The gap between the two columns is the whole lesson. The house, the rent and the loan are identical; only the tax line changed, and it moved the ratio from comfortable to right at the minimum. Lexington County and Richland County millage also differ, and so do the school districts within them, so two similar houses a few miles apart can carry noticeably different bills.
| Item | 80% LTV, seller's tax | 80% LTV, landlord tax | 75% LTV, landlord tax |
|---|---|---|---|
| Loan | $212,000 | $212,000 | $198,750 |
| Estimated principal and interest | $1,482 | $1,482 | $1,390 |
| Property taxes | $120 | $310 | $310 |
| Insurance and HOA | $150 | $150 | $150 |
| Total payment | $1,752 | $1,942 | $1,850 |
| DSCR at $1,950 rent | 1.11x | 1.00x | 1.05x |
Fort Jackson is the Army's largest basic training installation, and the permanent party and civilian workforce create steady demand in northeast Richland, Forest Acres and nearby neighborhoods. Military tenants often lease for a year or two, and some prefer properties within an easy drive of the gates.
USC drives demand in Shandon, Rosewood, Olympia and the blocks around campus. Leases there often run on the academic year. Underwriting uses the lease or market rent, but your own reserves should cover summer turnover.
The City of Columbia regulates rental property through business licensing and property maintenance standards, and many residential zones limit how many unrelated people can share a dwelling. Those limits matter near campus, where a four-bedroom house rented by the room may run into occupancy rules. Forest Acres, Cayce, West Columbia and the unincorporated counties each have their own requirements. Confirm current rules before you count per-bedroom rents.
Insurance in the Midlands is generally more manageable than on the South Carolina coast, but older homes with original wiring, aging roofs or galvanized plumbing can be harder to place. The October 2015 flood hit neighborhoods along Gills Creek and other low areas, and some properties near the Congaree, Broad and Saluda rivers sit in mapped flood zones where flood insurance is generally required. Check the FEMA map and include any flood premium in the payment.
South Carolina closings are handled by attorneys, and your closing attorney will review title, prepare documents and record the deed. The state deed recording fee is customarily paid by the seller. Bring your LLC's articles of organization, operating agreement and a signing resolution if you buy in an entity, which is standard for DSCR loans.
If you are buying from an owner-occupant, ask your attorney to confirm the property will be reclassified for the next tax year, and set aside the difference in your reserves so the first full bill is not a surprise.
LendingStreet finances rentals throughout the Midlands. Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, rent, insurance quote and the county tax record through the form below, and we will run the ratio on the landlord's tax bill at more than one loan amount.
South Carolina taxes owner-occupied homes at a 4% assessment ratio and rentals at a 6% assessment ratio, and owner-occupants are exempt from school operating millage. As a landlord, your bill is often much higher.
The standard minimum is 1.0x. Sub-1.0 programs exist for files that fall a little short.
Yes. We finance rentals in Lexington, Irmo, Chapin, West Columbia, Cayce and the rest of the metro.
It depends on occupancy limits in the zoning. Confirm with the city before relying on per-room rents.
In South Carolina, closings are handled by an attorney.
Yes. LLC borrowers are standard.
They can be. Underwriting uses the lease or market rent, so the property just needs to support the payment.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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