Short-term rental rules in the Charleston area are set town by town, and they differ more here than in most coastal markets. A house that could earn nightly income in one town may only be rentable by the year a few miles away. Before you count on vacation rental income, find out which jurisdiction a property is in and what that jurisdiction allows.
City of Charleston
The city permits residential short-term rentals only where the owner lives on the property, with permit categories that vary by area of the city. Investor-owned short-term rentals are limited to a small commercial overlay. For an investor, that means most houses inside the city limits should be underwritten on long-term or mid-term rent.
Mount Pleasant and North Charleston
Both towns regulate short-term rentals separately from the City of Charleston, through zoning and business licensing. Rules can differ by neighborhood and by type of property, and planned communities often add their own limits. Check with the town and read any association covenants for the specific property.
Folly Beach
Folly Beach caps the number of investor short-term rental licenses. In 2026 a court ruled against the way the cap was adopted, the city appealed, and most new investor licenses were paused while the appeal proceeds. Whether a particular house holds a license, and whether it transfers to a buyer, should be confirmed with the city in writing before you rely on nightly income.
Isle of Palms and Sullivan’s Island
Isle of Palms has a large licensed vacation rental market, with its own licensing, occupancy and parking rules. Sullivan’s Island, just across Breach Inlet, is far more restrictive. Do not assume the two islands work the same way.
Unincorporated areas and other towns
Parts of James Island, Johns Island and West Ashley fall under Charleston County or the Town of James Island rather than the City of Charleston. Summerville, Goose Creek and the other towns in Berkeley and Dorchester Counties each have their own rules too.
Mid-term rentals
Many investors who cannot rent by the night in Charleston rent furnished homes by the month instead, to traveling medical staff, military families and people relocating for work. Ask the town how it treats rentals of a month or more before you set up the property this way.
Why it matters to your loan
- A DSCR loan is sized on the income the property is allowed to earn. We count nightly income only where the property can legally rent by the night.
- Rules change. Folly Beach’s cap has been in court, and other towns revisit their ordinances regularly.
- Taxes apply too. Vacation rentals collect state and local accommodations taxes, and rentals are assessed for property tax at the 6% ratio.
Not sure how a property will be underwritten? Send us the address and we will tell you which rent we would use.