Columbia multifamily investment guide

Richland County median home value is $242,800. That is not merely low, it is the lowest of any geography in this entire series by a clear margin: Greenville is $299,000, Huntsville $299,200, Chatham County $302,700, Dallas $303,000, and Los Angeles $834,200.²

Median household income is $63,784, and that is also the lowest we have measured, below Richmond city at $64,587 and Miami-Dade at $71,753. Median gross rent is $1,228, second only to Huntsville at $1,209 as the lowest in our coverage.²

Put those together and the affordability picture is genuinely good for residents. Price-to-income is about 3.8 on our arithmetic, second most attainable in our coverage behind Huntsville at about 3.5. Rent is about 23.1 percent of median household income, comfortably below the threshold HUD uses to define a cost-burdened household. Median owner cost with a mortgage is $1,533, only $305 a month above the median rent.²

For an owner that cuts the way it has in Greenville and Huntsville. Cheap housing relative to income means the renter can leave, and 60.3 percent of Richland households already own. A Columbia underwriting cannot lean on rent escalation, because a $305 monthly gap is not much of a barrier.²

There is a second reading that matters more here than in those markets. Poverty in Richland County is 15.8 percent, the second highest we have measured after Richmond city. Low prices and low incomes are the same fact seen from two directions, and a tenant base at this income level has limited absorptive capacity for an expense pass-through or a renovation premium, whatever the affordability ratio says.²

• Median home value $242,800, the lowest in our coverage.²
• Median household income $63,784, also the lowest.²
• Price to income about 3.8; rent about 23.1 percent of income.²
• Poverty 15.8 percent, second highest we measure.²

Low prices and low incomes are the same fact seen from two directions. The affordability ratio looks healthy; the tenant’s capacity to absorb a rent increase does not follow from it.

This deserves its own section because it is the single most common error we see in decks for this market, and the numbers involved are large enough to distort a demand argument badly.

Fort Jackson is the U.S. Army’s largest and most active initial entry training installation. It trains roughly 50 percent of all soldiers entering the Army each year, and more than 60 percent of women entering the Army, with in excess of 48,000 basic training soldiers and around 12,000 additional advanced training soldiers annually.

Those are genuinely enormous numbers, and they are not rental demand. Basic combat training runs about ten weeks and trainees live on post. A soldier passing through Fort Jackson does not sign a twelve-month lease in Columbia, does not form a household in Richland County, and does not appear in the Census household count.

The rental demand from the installation comes from permanent party: the cadre, the drill sergeants on multi-year assignments, the civilian workforce, the contractors and the families attached to them. That is a real and durable renter base, and it is a small fraction of the throughput figure.

So when a business plan cites Fort Jackson training volumes as evidence of housing demand, it is citing a number roughly an order of magnitude larger than the one that matters. Ask instead for permanent party and civilian headcount, and for the share of that population living off post, because that is the population a Columbia rent roll actually draws from.

The same discipline applies to the university. Enrollment supports rental demand, but student demand behaves differently from workforce demand: it is seasonal, it concentrates in specific submarkets, it turns over annually, and it competes with purpose-built student housing that a conventional garden asset cannot match on amenity.

• Fort Jackson trains about 50 percent of all soldiers entering the Army each year.
• Basic combat training runs roughly ten weeks, and trainees live on post.
• Rental demand comes from permanent party, civilians and contractors, a far smaller number.
• Ask for permanent party headcount and the off-post share, not throughput.

Fort Jackson trains tens of thousands of soldiers a year who live on post for ten weeks. That is throughput, not household formation, and a deck that conflates the two overstates demand by an order of magnitude.

Columbia sits under the same assessment regime as the Upstate, and we set out the mechanics in the Greenville guide: Section 12-43-220 of the South Carolina Code of Laws taxes an owner-occupied legal residence at four percent of fair market value and all other real property, including rentals, at six percent.⁴

What is worth adding here is where that ratio bites hardest, because it is not uniform in effect. The six percent ratio is applied to fair market value, so the absolute dollar penalty scales with the value of the asset. In a market with a low median home value, the per-unit dollar impact is smaller than it would be in Charleston at $489,100.²

But the ratio is also applied against a rent roll that is the second lowest in our coverage. A tax increase of a given dollar amount consumes a larger share of net operating income when the rent supporting it is $1,228 rather than $1,620. The proportional effect on the return is therefore worse here, not better, even though the absolute number is smaller.²

Richland and Lexington counties set their own millage and the metro spans both, so the tax line is a county-specific calculation. As always in South Carolina: model at six percent of your purchase price, never at the seller’s bill.