Short-term Rentals Have Wide-ranging Impact in South Carolina
Friday, June 21st, 2019
Short-term rentals are having an impact on the South Carolina real estate market, although it depends on whether you’re in Charleston, Columbia or Greenville.
“The rules vary from community to community,” said Ron Anderson, Colliers International’s head of research for South Carolina. “If you look at the three markets, they’re all really different.”
The short-term rental market goes back decades in South Carolina. Beachfront homes see a weekly rotating crop of vacationers. Aiken County homeowners make their houses available every April to golf fans attending the Masters.
Like with most things, technology has taken this splintered marketplace to another level. Online firms such as Airbnb, Vrbo and HomeAway have organized and grown the market.
Vrbo, which specializes in vacation rentals, recently touted 2,108 rentals in Asheville, 3,699 in Charleston and 7,660 in Hilton Head Island on its website. It ranked Myrtle Beach as the top-value U.S. beach destination for travelers in 2018, with average daily rental rates of $54 per night per person.
In its South Carolina report for 2018, Airbnb lists Charleston County No. 1, with $54.9 million in total host income and 306,000 guest arrivals. Horry County was second ($19.2 million, 131,000 arrivals) and Beaufort third ($15.4 million, 86,000).
Charleston is coming up on the one-year anniversary of an ordinance that regulates short-term rentals. It covers items such as parking and zoning but a key provision is that the residence also be the owner’s full-time primary residence.
In popular tourist markets, entrepreneurs have sought to purchase single-family homes or condominiums with the sole intent of offering them as year-round, short-term rentals.
Dr. David Wyman, director of the Center for Entrepreneurship at the College of Charleston’s School of Business, studied single-family homes on Isle of Palms and found about a third were the residents’ primary home, a third were second homes and a third were short-term rentals.
“If you go to Isle of Palms, most of it is Vrbo as opposed to Airbnb,” Wyman said, comparing the submarket to Charleston proper. “The beach communities tend to be rented out by the week or so.”
Greenville County ranked No. 4, with $5.9 million in host income and 48,000 guest arrivals. Short-term rentals there have zoning restrictions and require permitting and tax collection similar to that of a hotel or bed and breakfast.
Business travelers working with the numerous international companies in the region, as well as tourists, are drawn to short-term rentals.
“Greenville’s an interesting market,” Anderson said. “There’s a lot of expatriates there. They want an urban experience.”
Amanda Jones, executive vice president of sales with Coldwell Banker Caine, knows of many clients and real estate agents who list houses on short-term rental sites.
“They would say there’s a great deal of demand,” she said.
Downtown Greenville condos are also attractive, she said. Many developments have restrictions on the number of units that can be leased by owners (short term or long term). Those factors went into marketing the Washington on Main development, she said.
“The second floor is unrestricted rentals,” Jones said. “We only put the city restrictions on it.”
Richland County and Lexington County rank fifth and ninth in the state, respectively, on Airbnb’s list. Richland hosts took in $3 million in income (26,000 arrivals), while Lexington hosts tallied $1.1 million (11,000 arrivals).
“We haven’t had as many of the concerns as we have seen in other communities,” says Columbia Mayor Steve Benjamin. “The sharing economy is here to stay.”
Airbnb points out that traditional hotel revenues have increased in South Carolina, which it said suggests that sites such as Airbnb are “opening up the state to a new slice of prospective tourists.”
“There’s always going to be a consumer who wants something a little different,” said Julie Tuttle with Styx Co. Styx specializes in traditional apartment properties and recently opened Claussen’s, a 29-unit renovation of a former hotel, which itself was a renovation of a historic Columbia bakery.
Oconee County ranks seventh with Airbnb, totaling $1.3 million in host income and 9,300 guest arrivals in 2018. A new development on Lake Hartwell is taking the short-term concept a step further.
Lakeside Lodge Clemson is a 118-unit condo development slated for a fall opening. Developers say it will be run like a hotel and condo owners can rent out their units (available exclusively through the property management company) when not using them. The developers and unit owners would share in any revenues.