Rental Property ROI High in Lexington and Richland Counties
Considering purchasing rental property in South Carolina? You should look in the Midland’s counties of Lexington, Richland, and Sumter. These counties have some of the highest return on investment (ROI) and lowest carrying costs in South Carolina.
Why Are the Lexington and Richland Counties Rental Markets So Profitable?
The coastal property market is the most expensive to operate in South Carolina with very high carrying costs including taxes and insurance. The going rental rate on these coastal properties compared to the expenses is not enough to provide a big return. (See the below chart for additional info.) Richland County, for instance, has one of the lowest sales prices for homes in the state yet one of the higher rental amounts. This spells PROFIT for the property owner!
Rental Property Return on Investment in South Carolina
|County||Rental Amount (3 bedroom)||Median Sales Price||Annual ROI|
Source: Attom Data Solutions, U.S. Department of Housing and Urban Development
What Should You Consider?
When considering getting into the rental business or purchasing more properties, one of the most important steps is to find a trusted insurance partner to help guide you and provide timely quotes. Owners need to make sure they have the proper amount of property and liability insurance for each property, weigh various deductible options, and consider different insurance companies to find the right fit. An independent insurance agency, such as Livingston Insurance, can easily help you with all of this.
How Much Should You Insure Your Rental Property For?
This may seem like a straightforward question; however, it can actually be quite complicated, and there are options. For instance, there are several different methods by which your insurance company may calculate the amount it will pay you for a loss. Payment based on the replacement cost of damaged or stolen property is usually the most favorable from your point of view because it compensates you for the actual cost of replacing the property. In contrast, actual cash value (ACV) is the standard that insurance companies arguably prefer when reimbursing policyholders for their losses. Actual cash value is equal to the replacement cost of the property minus any depreciation (ACV = replacement cost – depreciation). This is a complex topic that an agent can help you with. Here is also a helpful article on how the amount may even differ per state law:
If done right, investment properties can be a lucrative business, especially considering some of the returns mentioned in the chart below. However, it can also be complex to insure and manage, so an experienced insurance agency will help make this process much smoother. Livingston Insurance has helped clients manage their rental business for almost 60 years now, and we are adding new clients getting into the business each week. Give us a call at 803-791-1120 so we can help you get started today!