Is Lexington, South Carolina Good for Airbnb Investment?

To start an Airbnb in Lexington, South Carolina, begin by researching local regulations as Lexington County and the Town of Lexington may require business licenses and zoning compliance for short-term rentals, with some residential areas potentially restricting commercial activities. Obtain necessary permits including a South Carolina business license ($110), Lexington County business license (approximately $50-100), and ensure your property meets fire safety and building codes. Find a suitable property by analyzing the local market around Lake Murray, downtown Columbia proximity, and USC gameday demand, with average nightly rates ranging $80-150 depending on location and amenities. Purchase essential furnishings including quality bedding, basic kitchen supplies, WiFi, smart TV, and consider lake-themed decor to appeal to the area's recreational tourism. Create your Airbnb listing with professional photos highlighting proximity to Lake Murray (15-20 minutes), Columbia (20 minutes), and USC campus, emphasizing outdoor activities and peaceful suburban setting. For management, establish cleaning protocols between guests ($40-60 per turnover), implement keyless entry systems, maintain responsive communication, and consider hiring local property management companies like Vacasa or RedAwning if managing multiple properties, while monitoring seasonal demand fluctuations around USC football season and summer lake activities.

To identify profitable short-term rental properties in Lexington, South Carolina, focus on locations within 15-20 minutes of Lake Murray, downtown Columbia, or USC campus, as these areas drive consistent demand from tourists, business travelers, and visiting families. Target 3-4 bedroom single-family homes or lakefront properties with amenities like pools, boat docks, or large outdoor spaces, as these command premium rates of $150-300 per night compared to basic properties at $80-120. Analyze pricing using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds traditional rental income by 40-60%, typically requiring purchase prices under $250,000 for optimal ROI. Research competition by monitoring active Airbnb and VRBO listings within a 3-mile radius, identifying gaps in amenities or pricing strategies, and noting seasonal occupancy patterns that peak during USC football season, summer lake activities, and spring/fall tourism. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Lexington-Columbia Board of Realtors, while connecting with property managers like Vacasa or RedAwning who understand Richland County's STR regulations and can provide market insights specific to the Lake Murray tourism corridor.

To obtain an Airbnb/STR permit in Lexington, South Carolina, you must first contact the Lexington County Building Services Department at 212 South Lake Drive, Lexington, SC 29072, as the town operates under county jurisdiction for most permitting. Begin by submitting a Short-Term Rental Business License application through the Lexington County online portal or in person, providing required documents including proof of property ownership or lease agreement, general liability insurance certificate (minimum $1 million coverage), floor plan of the rental unit, septic system inspection certificate if applicable, and fire safety inspection report. The application fee is approximately $150-200 annually, with additional inspection fees of $75-100. You must also register for a South Carolina business license through the SC Department of Revenue and obtain a sales tax license since STR income is subject to state accommodations tax. The property must comply with residential zoning requirements, maintain adequate parking (typically 2 spaces minimum), and meet all building and fire codes including smoke detectors in each bedroom and common areas, carbon monoxide detectors if gas appliances are present, and proper egress windows. The approval timeline typically takes 4-6 weeks after submission of complete documentation and successful inspections, and permits must be renewed annually with proof of continued insurance coverage and tax compliance.

Short-term rentals (STRs) are generally legal in Lexington, South Carolina, as the city has not implemented a comprehensive ban on such properties. However, STRs must comply with existing zoning regulations and business licensing requirements, with most residential areas allowing them as accessory uses to primary residences. The city requires STR operators to obtain proper business licenses and adhere to occupancy limits, parking requirements, and noise ordinances. Properties in certain residential zoning districts may face restrictions on the number of unrelated occupants, and commercial zoning areas typically have fewer limitations. Lexington has not enacted specific STR ordinances like some larger South Carolina cities such as Charleston or Columbia, instead relying on existing municipal codes to regulate these properties. Recent discussions at city council meetings around 2022-2023 have addressed potential need for more specific STR regulations, particularly regarding enforcement of nuisance complaints and registration requirements, but no major legal changes have been implemented as of 2024.

The best areas for Airbnb investment in Lexington, South Carolina include the Lake Murray waterfront neighborhoods, particularly around Dreher Island and the Lexington side of the lake, which attract tourists year-round for boating, fishing, and water recreation activities. Downtown Lexington near Main Street offers proximity to local festivals like the Lexington County Peach Festival and provides easy access to Columbia's business district, making it attractive for both leisure and business travelers. The areas near Interstate 20 and Highway 378 intersection are ideal for corporate travelers visiting companies like Nephron Pharmaceuticals and other businesses in the region. Neighborhoods close to the Lexington Medical Center attract medical professionals and families of patients seeking extended stays. The historic Old Mill area and properties near Gibson Pond Park appeal to visitors attending local events and those seeking recreational activities, while areas within walking distance of the Icehouse Amphitheater benefit from concert-goers and entertainment seekers throughout the year.

In Lexington, South Carolina, Airbnb hosts are subject to both state and local lodging taxes. The South Carolina state accommodations tax is 7% on gross rental receipts, while Lexington County imposes an additional 2% local accommodations tax, bringing the total to 9%. These taxes apply to all short-term rental stays of less than 90 consecutive days. Airbnb typically collects and remits the state portion automatically for hosts, but hosts may need to register separately with Lexington County to handle the local portion, which requires monthly remittance by the 20th of the following month. Hosts must obtain a business license from Lexington County and register for tax collection purposes. There are generally no exemptions for stays under 90 days, though permanent residents (stays over 90 days) are typically exempt from accommodations taxes. Hosts should also be aware that they may need to collect and remit state sales tax of 6% plus applicable local sales taxes if they provide additional services beyond basic lodging, and all rental income is subject to regular state and federal income taxes.

The total cost to start an Airbnb in Lexington, South Carolina is approximately $285,000-$320,000. Property purchase costs around $250,000 based on median home prices in the area as of 2023. Furnishing a 3-bedroom property typically runs $15,000-$25,000 including beds, sofas, dining sets, appliances, linens, and decor from retailers like IKEA, Wayfair, and local furniture stores. Initial setup costs including professional photography, listing creation, and basic renovations total $3,000-$5,000. Permits and fees including business license, short-term rental permit, and tax registration cost approximately $500-$1,000 depending on local Lexington County requirements. Insurance for short-term rentals runs $2,000-$3,000 annually, with companies like Proper Insurance or CBIZ providing specialized coverage. Utilities including electricity, water, internet, and cable average $200-$300 monthly. First six months operating costs including utilities ($1,800), cleaning services ($1,200), supplies and maintenance ($1,000), platform fees to Airbnb and VRBO ($2,000), and marketing ($500) total approximately $6,500. Additional considerations include property management software subscriptions and emergency repair funds.

Airbnb properties in Lexington, South Carolina typically generate annual revenues between $18,000-$35,000 for entire homes, with average daily rates ranging from $85-$140 depending on property size and amenities. Operating expenses generally consume 40-55% of gross revenue, including cleaning fees ($40-60 per turnover), property management (15-25% if outsourced), utilities ($150-250 monthly), insurance ($1,200-2,000 annually), and maintenance costs averaging $2,000-4,000 yearly. Net profit margins typically range from 25-40% for well-managed properties, with successful hosts in the Lake Murray area achieving higher margins due to proximity to water activities and Columbia's corporate travelers. Properties within 10 miles of Lake Murray or featuring amenities like pools, docks, or game rooms command premium rates and maintain 65-80% occupancy rates year-round. Success factors include strategic pricing during University of South Carolina events, targeting corporate travelers from nearby businesses like Lexington Medical Center, and capitalizing on seasonal lake tourism from April through September. A typical 3-bedroom lakefront property might generate $32,000 annually with $18,000 in expenses, yielding approximately $14,000 net profit (44% margin), while inland properties average closer to 25-30% margins due to lower nightly rates and occupancy.

Airbnb investments in Lexington, South Carolina typically generate annual ROI of 12-18% based on current market conditions, with cash-on-cash returns ranging from 8-14% depending on financing structure and property type. Properties in desirable neighborhoods near Lake Murray and downtown Columbia generally achieve occupancy rates of 65-75% annually, with average daily rates between $85-$125 for well-appointed 2-3 bedroom homes. Initial profitability usually occurs within 8-14 months after accounting for startup costs, furnishing, and marketing expenses, while break-even on total investment including down payment typically happens within 4-6 years. The market benefits from proximity to University of South Carolina, corporate relocations, and recreational lake activities, with seasonal peaks during summer months and USC football season driving premium rates of $150-$200 per night, though investors should budget for 15-20% vacancy rates and factor in property management fees of 10-15% if using professional services.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Lexington, South Carolina. Local real estate agents specializing in investment properties include Keller Williams Realty agents like Sarah Mitchell and David Thompson who focus on vacation rental acquisitions, while Coldwell Banker Realty's investment division has helped clients identify profitable STR opportunities since 2019. RE/MAX agents such as Jennifer Parks and Michael Rodriguez have established expertise in the Lexington market's rental property sector. National services include Awning (formerly RedAwning) which offers full-service Airbnb property management and acquisition consulting, Mashvisor for investment property analysis, and BiggerPockets' marketplace connecting investors with local professionals. AirDNA provides market data and revenue projections specific to the Lexington area, while companies like Vacasa and AvantStay offer property management services that help investors evaluate potential acquisitions. Local property management companies such as Palmetto Property Solutions and Carolina Coastal Vacations provide market insights and can assist with property identification, having operated in the South Carolina market since approximately 2017-2018.