South Carolina's coast is built for vacation rentals, but the state taxes them differently from a home you live in. That tax difference, plus wind insurance, decides a lot of South Carolina STR files.
In short: LendingStreet finances South Carolina short-term rentals with DSCR loans that can qualify on projected rental revenue on some programs, starting at $150,000 with LLC borrowers allowed and no W-2s or tax returns. Rental property is taxed at a 6% assessment ratio instead of the 4% assessment ratio for a primary residence, so budget taxes at the investor level. Charleston limits whole-home STRs in most residential areas; the beach towns are more open.
The Grand Strand, from North Myrtle Beach through Myrtle Beach to Surfside Beach and Garden City, has a deep supply of oceanfront condos and beach houses. Hilton Head Island, Bluffton and Fripp Island draw families, golfers and retirees testing the area. Near Charleston, Folly Beach, Isle of Palms, Sullivan's Island, Kiawah and Seabrook are high-demand beach markets with their own permit rules.
Inland, Lake Keowee, Lake Hartwell and Lake Murray attract summer lake visitors, and Greenville's downtown draws event and business travel. Clemson and Columbia fill on college football weekends.
| Market | Typical property | What drives bookings | Rule to check |
|---|---|---|---|
| Grand Strand (Myrtle Beach area) | Oceanfront condos, beach houses | Family beach vacations, golf | City rules; condo-hotel associations |
| Hilton Head and Bluffton | Villas, beach homes | Beaches, golf, tennis | Town STR permit; HOA rules |
| Charleston-area beaches | Beach houses | Beaches near a major tourist city | Town permits; some caps |
| City of Charleston | Historic homes, condos | Tourism, weddings, dining | Whole-home STRs limited in most zones |
The City of Charleston generally requires short-term rentals in residential zones to be the operator's primary residence, with commercial and certain overlay zones treated differently. For most investors, whole-home nightly rentals on the peninsula are not an option. Folly Beach, Isle of Palms and Sullivan's Island each require permits, and some have debated or adopted caps.
Hilton Head requires an STR permit, and Horry County and the Grand Strand cities have business license and accommodations tax rules. Many condo buildings along the coast operate like hotels with rental programs, while some gated communities restrict rentals. Read the master deed and HOA rules early.
DSCR stands for debt service coverage ratio: monthly income divided by the monthly payment, including taxes, insurance and HOA dues. A 1.0x ratio means the income just covers the payment. For nightly rentals, some programs let that income come from a third-party revenue projection rather than a signed lease.
The projection should match the property you are actually buying: same bedroom count, similar finishes and a location that guests compare directly. Programs differ in whether they discount the projection, average it with market rent or require booking history on a refinance, so confirm the method early.
This example is illustrative and not a quote. The property is a three-bedroom oceanfront-area condo in North Myrtle Beach, priced at $465,000. The revenue projection is $53,000 a year, so about $4,417 a month counts as income. The payment also includes $330 a month in property taxes and $120 for insurance, plus $640 in HOA dues.
A 75% LTV loan of $348,750 carries estimated principal and interest of about $2,474. All in, the payment is about $3,564 and the DSCR is about 1.24x, or about 1.05x if revenue lands 15% under the projection.
Dropping to 65% LTV makes the loan $302,250, the payment about $3,235 and the DSCR about 1.37x. More equity buys margin against a soft season.
| Item | 75% LTV | 65% LTV |
|---|---|---|
| Loan amount | $348,750 | $302,250 |
| Estimated principal and interest | $2,474 | $2,145 |
| Property taxes | $330 | $330 |
| Insurance and HOA dues | $760 | $760 |
| Total monthly payment | $3,564 | $3,235 |
| Projected monthly revenue | $4,417 | $4,417 |
| DSCR | About 1.24x | About 1.37x |
| DSCR if revenue is 15% lower | About 1.05x | About 1.16x |
A home you live in qualifies for the 4% assessment ratio, but a rental is assessed at a 6% assessment ratio, which makes the investor's tax bill noticeably higher than the seller's if the seller lived there. Use the 6% assessment ratio in your numbers. Short stays also carry state sales tax, the state accommodations tax and local hospitality and accommodations taxes.
Coastal wind and hail coverage often comes through the South Carolina Wind and Hail Underwriting Association, and flood insurance is required in mapped flood zones. Oceanfront condo associations pass their insurance costs through HOA dues, so check the budget and any special assessments.
The Grand Strand and Hilton Head peak from late May through August, with spring and fall golf seasons and snowbird stays in winter softening the slow months. Charleston-area beaches follow a similar curve. Lake properties are summer-heavy, while Clemson and Columbia homes earn premiums on home football weekends.
Lenders size the loan on the payment, but you run the business. Expect to pay for turnovers and cleaning, linens, utilities and Wi-Fi, guest supplies, repairs from heavier use, platform service fees and, if you are not local, a property manager. Furniture and setup costs come before the first guest arrives.
Because most programs measure coverage on gross revenue, a thin ratio can hide a negative cash flow once those costs are paid. Give yourself margin by keeping leverage moderate or choosing a property with a strong revenue history.
Our investor loans are business-purpose loans on non-owner-occupied property. You qualify on the rental, not your job, and you can close in an LLC.
Send the address, purchase price or current value, target loan amount and whatever revenue data you have. The financing team will run the ratio at more than one leverage level and tell you which programs fit. You can use the form below or call (877) 298-1001.
If the seller lived in the home, they had the 4% assessment ratio. As an investor you are assessed at a 6% assessment ratio, so your bill will be higher.
In most residential zones the city requires the operator to live in the home. Whole-home STRs are generally limited to commercial or specific overlay zones.
Many coastal condo buildings are built around rentals. Condo project review, HOA dues and the master insurance policy still matter, and some condo-hotels have extra requirements.
It is a state tax on short-term lodging, and many counties and towns add local accommodations and hospitality taxes. Platforms collect some of it.
It is the standard minimum, but sub-1.0 programs exist. Lower leverage is the other common fix.
No. On some programs a third-party revenue projection can qualify a property with no history, which works for purchases. On a refinance, actual booking history often carries more weight.
Yes, 620. You qualify on the property's income rather than your personal income, so W-2s and tax returns are not required.
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