Do I Choose the Off-site Property Manager to Make more income now, or the On-Site Property Manager to Build More Income Later?  

There are two schools of thought about using on-site or off-site property management.

On-site Property Management.

From my experience in our market, whenever owners elect to use off-site property management, their tenants are not allowed to use most of the on-site amenities.

If you go the on-site property management route, your tenants are probably going to have a much better experience because they’ll be able to use all the on-site amenities, and they can simply walk down to the front desk and ask if they need anything.

Going the On-site Property Management route, you’re more likely to have satisfied and therefore repeat customers who will rent your property year in and you’re out, repeatedly. Two-things impact your rental business because of the yearly repeat tenants: you can successively build your Gross Rental Income (GRI) each year upon the next year and, due to the loyalty of your tenants, you may be insulated from the ups and downs of the rental market. In other words, if the rental market has a bad year overall, because your tenants are loyal, you may not see a significant reduction in Gross Rental Income.

All that sounds great, but the downside is that generally an on-site property manager is going to charge a higher property management fee when compared to off-site property managers. So, you won’t make as much money as you could initially, but you’re more likely to have satisfied tenants that return yearly and in the long run, build a more resilient rental business.

In actual terms, if your on-site property manager charges 40%, and your off-site property manager charges 25%, that’s a difference of 15% in your pocket annually. With a Gross Rental Income of $30,000 per year, that’s $4,500 more dollars per year in your pocket. At the end of 10 years, that’s $45,000. I don’t know about you, but an extra $45,000 sounds good to me.  

Keep in mind that while you might not make as much money initially using the on-site property management due to their higher fees, as your book of business grows, you should begin to make more and more Gross Rental Income until your rentals reach maximum occupancy. You should eventually realize close to the same—if not the same or greater—profitability as if you used the off-site property management company, and once you reach this point, you’ll most likely have a more economically resilient rental business.

Off-site Property Management.

When you go the Off-site Property Management route, your tenants will most likely not be able to use most of the amenities and because of that, they may not rent your unit again. However, be reminded that Myrtle Beach is the number 2 vacation destination on the East Coast and has over 20 million visitors each year. There are plenty of new tenants each year to rent to.

The Off-site property management company will most likely put more money in your pocket now because their management fee will be lower than the on-site property manager, and with all the new tenants coming to our market each year, why be concerned about building a book of business for your rental property? You can just get new tenants. Yes, that’s right, but you’re basically left to the mercy of the ups and downs in the rental market. If the market overall has a bad year, you’re probably going to have a bad year too. But, when the years are great, you’ll put more money in your pocket.

So, how do I choose?

This largely depends on your own personal financial objectives. Do you plan to own an oceanfront condo for 10 years? Would you like to bolster your retirement years through passive rental income? Maybe you’d like to build your portfolio through oceanfront condos. Then it may be advantageous for you to use the onsite property management company.

If you’re not going to own your condo for more than a few years, you’ve purchased it for recreational use and rental income is not important to you, or you’re not planning to grow the oceanfront condo portion of your portfolio, then the off-site property management route may be a better for you.

These are simply my thoughts on the matter. I recommend consulting your financial advisor, certified public accountant, or attorney to confirm which route is best for you.  

Call today to discuss your next Oceanfront Condo purchase in the Myrtle Beach Real Estate Market: 843-360-1737

What are the real estate advantages to buying Real estate in Myrtle Beach South compared with Florida?

Investing in real estate in Myrtle Beach, South Carolina, offers several advantages compared to Florida:

1.    Affordability: Myrtle Beach generally offers more affordable real estate prices compared to many popular areas in Florida. Whether you're looking for a primary residence, a vacation home, or an investment property, you're likely to find more affordable options in Myrtle Beach.

According to data from the U.S. Census Bureau, the median home value in South Carolina is $187,000, while in Florida, it is $277,000 (as of the latest available data, which may vary depending on the specific area within each state).

2.    Lower Property Taxes: South Carolina typically has lower property tax rates compared to Florida. This means that property owners in Myrtle Beach may benefit from lower annual property tax bills, contributing to overall affordability and potentially higher returns on investment.

The average effective property tax rate in South Carolina is just 0.52% while Florida’s average effective property tax rate is 0.80%. That’s 0.28% that you’re putting in your pocket every single year by living in South Carolina.

3.    Steady Rental Market: Myrtle Beach is a popular tourist destination, the second most popular vacation destination on the East coast, attracting 20 million visitors each year. This creates a steady demand for short-term vacation rentals, making it an attractive market for investors seeking rental income. Additionally, Myrtle Beach has a growing population and economy, contributing to a stable long-term rental market. For the third year in a row, Myrtle Beach has claimed the top spot in US News and World Reports Annual list of fastest-growing places in America.

Click Here For US News & World Report: The Fastest Growing Places in the U.S.

Historically, Florida tends to have a higher demand for oceanfront properties compared to South Carolina, especially in areas like Miami, Fort Lauderdale, and the Florida Keys. This higher demand can often translate into potentially higher ROI, but it's essential to consider other factors such as property prices, maintenance costs, and rental regulations.

However, the higher demand in Florida causes the purchase prices of these properties to increase, and when compared to lower demand in Myrtle Beach South Carolina, a significant savings in purchase price can present itself. Myrtle Beach investment properties have the potential of being cheaper to buy, yet having a steady rental market, making Myrtle Beach South Carolina rental properties the winner when comparing the two locations.  

4.    Diverse Investment Opportunities: Myrtle Beach offers a diverse range of real estate investment opportunities, including beachfront condos, golf course communities, residential neighborhoods, and commercial properties. Whether you're interested in residential rentals, vacation rentals, or commercial ventures, you can find suitable investment options in Myrtle Beach South Carolina.

5.    Growth Potential: Myrtle Beach and the surrounding areas are experiencing significant growth and development, with new residential and commercial projects underway. Investing in real estate in Myrtle Beach presents opportunities for capital appreciation as the area continues to grow and attract new residents, businesses, and tourists.

November 14, 2022. The U.S. Census Bureau estimated that Horry County, which includes Myrtle Beach, had 383,101 residents in July 2022, a 9% increase from 2020 and 42% growth from 2010. The county saw a 48% rise in permits issued for single-family homes between the 2020 and 2021 fiscal years.

6.    Quality of Life: Myrtle Beach offers an exceptional quality of life with its beautiful beaches, outdoor recreational opportunities, cultural attractions, and vibrant community. Whether you're buying real estate for personal use or investment purposes, Myrtle Beach provides an excellent environment for enjoying life and building wealth through real estate.

Many investors choose Myrtle Beach South Carolina because they get the perks of owning great investment properties while being able to use them for personal vacations, saving even more money on their vacation expenses.

Overall, investing in real estate in Myrtle Beach, South Carolina, offers several advantages, including affordability, lower property taxes, steady rental market, diverse investment opportunities, growth potential, and quality of life. Whether you're a first-time home buyer, an experienced investor, or a retiree looking for your dream home, Myrtle Beach presents attractive options for real estate investment.

For more information on why Myrtle Beach South Carolina is better place to live compared to Florida, Call or text me at: 843-360-1737

Disclaimer: All information given is meant to be educational. This information is not intended to replace your own research, or to provide legal, investment, or financial advice. Please consult an attorney for legal advice.

Oceanfront Condo Investment Secrets: Maximize Returns with Smart Management and Rental Strategies!

Are you considering investing in oceanfront condos? It's crucial to understand the intricacies of property management, taxes, and purchase strategies to make informed decisions and maximize your returns. Here's what you need to know:

1. Off-Site Property Management: Off-site property management companies often advertise lower fees but may end up costing you more in the long run. While they claim to charge only 15-18%, hidden fees—in one instance I’m aware of—resulted in a net loss of around $10,000 when compared to other units in that condominium.

Be sure to ask about the fees and get a copy of the contract to review.

2. Taxes: Navigating taxes is essential for property owners. There are two tax rates to consider in South Carolina:

• Non-resident tax rate: 6%
• Resident tax rate: 4%
• Additionally, owning an oceanfront condo entails paying personal property taxes on items like furniture, which can impact your overall expenses.

Smart Purchase Strategies:

• A solid and professional real estate agent will research the most recent sold price of the unit you’d like to invest in, through the Court House Retrieval System (CRS), to discover what the Seller paid for the unit. Then, they’ll factor in remodel costs (If the Seller remodeled the unit), and possibly consider financing costs, so that you make an informed offer without overpaying for the property.
• Your real estate agent can also contact multiple listing agents in your complex of interest, and negotiate a competitive offer, potentially starting with a bid $50,000 under the asking price to gauge responses. When someone bites, then they’ll begin to really dive into the numbers and see if this unit works for you. This approach generally works well when the investor is mostly concerned with the financial aspects of the unit.

Rental Income Considerations:

• Analyze rental rates based on the unit's sleeping capacity. Units accommodating more people typically command higher prices, offering a metric to assess if a property is overpriced. For example, if the average unit that sleeps 2 people runs $150,000 then generally you could consider that a unit sleeping 4 people should cost about $300,000 and a unit that sleeps 6 people, should cost about $450,000 in that market. If the property you’re interested sleeps 6 people, but the asking price is $550,000, the unit could be overpriced. You must think in terms of what drives income into your unit, and what your renters are considering is how many people they can sleep. This could be a decent metric to discover if the unit you’re looking at is overpriced. 
• Larger properties face challenges during off-season months but can leverage strategic marketing to attract groups like golfers, enhancing rental prospects. Larger properties like 4+ bedroom units have a more difficult time renting during the off-Season months. Generally, on-site property managers have special marketing programs in place to attract large groups like golfers so that your unit stays rented during the off season. 
• Enhance rental appeal by remodeling or converting bedrooms into recreational spaces, giving your unit a competitive edge in attracting renters. This can be easier with larger units and more challenging with smaller units because you don’t have as much space. When you have a 4+ bedroom unit, you can do things to improve your Gross Rental Income like convert a bedroom into a game room which gives your unit a competitive  market advantage, especially when renters are looking at pictures online and considering which unit they’d like to spend their Summer vacation in. 
• Smaller properties are easier to rent like 2–3-bedroom oceanfront condos but have more competition in the rental market. Which might cause rental price rates to decrease. 

Location Dynamics:

• While purchase prices may be higher, rental incomes tend to be more lucrative in North Myrtle Beach compared to Myrtle Beach, in my opinion, making it a desirable investment destination.

Conclusion: Investing in oceanfront condos requires careful consideration of property management, taxes, purchase strategies, and rental dynamics. By understanding these factors, you can make informed decisions to maximize returns on your investment in coastal properties.

Call today to discuss your next Oceanfront Condo purchase in the Myrtle Beach Real Estate Market: 843-360-1737

Disclaimer: All information given is meant to be educational. This information is not intended to replace your own research, or to provide legal, investment, or financial advice. Please consult an attorney for legal advice.

Unlock Your Financial Future: Investing in Oceanfront Condos in Myrtle Beach, SC

Whether you want to retire to an oceanfront condo as your primary residence or not, and whether you’re 3 – 10 years out from retirement, you make the purchase now, letting others build your equity in the property through tourists renting seasonally here in the Myrtle Beach South Carolina Market.

Myrtle Beach experiences 20 to 22 million visitors each year and is the 2^nd best vacation destination on the East Coast. Take advantage of cheaper oceanfront condo opportunities compared to investing in Florida, and begin building a nest egg today!

So, How does it work?

Simple. Buy the property that’s projecting profitable Gross Rental Income. Roll all the profits into the mortgage (if you financed), and the rent it out for however many years until you retire. Once you’re ready to retire, sell the property, rolling both the appreciation and the equity into your final home purchase.

It's that simple.

Appreciation.

Just recently, I had an investor telling me how he was kicking himself for not buying around the time of covid. He was thinking about purchasing an oceanfront condo at the Meridian Resort, for $95,000, but he didn’t and then Covid hit. 4 years later, that same condo is now listed for $199, 900! That’s over 100% appreciation in 4 years (Although, it may not sell for that much). By the way, a few years prior to that, another owner in this same resort was purchasing condos in the $60,000’s, and he bought more than one. Yep, I bet you he’s really enjoying that decision now.

Lots of buyers are kicking themselves for not investing before covid. Much less since 2000. The overall housing market for Single Family homes in Myrtle Beach South Carolina has seen excellent appreciation.

In the past 12 months, Myrtle Beach has seen a 3.80% increase in appreciation, and in the last 2 years, as much as a 24.52% increase in appreciation with an average annual rate of 11.59%.

Pre-covid, only 5 years ago, Myrtle Beach South Carolina real estate appreciated 61.09% with an average annual rate of 10.01%.

In the last 10 years, property appreciation has risen 106.53% with an average annual increase of 7.52%.

Over the last 24 years, Myrtle Beach Real Estate saw a 144.73% increase in appreciation, with an average annual increase of 3.84%.

Source: https://www.neighborhoodscout.com/sc/myrtle-beach/real-estate

What does this mean for you, the buyer?

Now, while we can never predict the future, nor guarantee profits, we can look at the historical appreciation in Myrtle Beach South Carolina and make informed decisions.

If you bought a home in the Myrtle Beach South Carolina Market in 2000, and that home cost $200,000, it would now be worth approximately $489,460. That’s 289,460 in appreciation.

But let’s say you don’t have 24 years to wait to retire, but only 10 years, that same home would be worth $413,060. That’s $213,060 in appreciation.

No worries if 10 years is too long. Let’s say you only have 5 years. That same $200,000 home could be worth as much as $322,180. That’s $122,180 in appreciation.

But if that’s still too long, let’s look at only 2 years’ worth of appreciation, which brings us to approximately $49,040.

The point is, by investing in Myrtle Beach real estate, especially oceanfront condos, you stand to gain both appreciation and annual profits that can build wealth and bolster your retirement years.

Call today to discuss your next Oceanfront Condo purchase in the Myrtle Beach Real Estate Market: 843-360-1737

Disclaimer: All information given is meant to be educational. This information is not intended to replace your own research, or to provide legal, investment, or financial advice. Please consult an attorney for legal advice.

Mastering Real Estate Investing in 2024: One Simple Step to Success for Beginners.

What is mastery?

Mastery is the ability to do something without conscious effort. You know, like riding a bike or tying your shoes.

As a beginner investor, you are far from a mastery level. But there’s an answer: the right real estate agent.

Connecting with the Right Partner: Your Gateway to Real Estate Investment

Investing in real estate without experience in 2024 can be simplified into one crucial step: connecting with the right person. This pivotal connection opens the doors to the realm of investing, especially if you lack prior experience.

The Significance of a Competent Agent

Key to this process is partnering with a competent, seasoned agent who possesses extensive market knowledge and exceptional sales skills. This agent becomes your guide, streamlining your journey into real estate investment and ensuring optimal outcomes. This way, you don’t spend wasted time learning what your agent already knows.

The Power of Your Connection

The significance of this connection cannot be overstated. A proficient agent not only facilitates successful deals but also accelerates your learning curve by imparting their expertise, maturity, and breakthroughs. Through this alliance, you bypass uncertainties and swiftly embrace the investor's role, securing wealth for yourself and your family.

Taking Initiative: Your Role in the Process

Initiating this connection rests solely on you. As the driving force behind your investment endeavors, you hold the power to take action. Whether it's a simple phone call, email, or text, seizing this opportunity can propel you into a vibrant future where you thrive.

Navigating the Market Landscape

Your chosen agent brings invaluable assets to the table. With a deep understanding of the market landscape, they tailor recommendations to your preferences, financial goals, and purchasing capacity. From identifying profitable properties to navigating financing intricacies, they guide you towards sound investment decisions. I’ll know that if you need a 2-bedroom 1 bathroom, you have a $200,000 to $250,000 price range, and you’re buying cash, you can be profitable at the Meridian Resort or the Sailfish Resort. Similarly, if you’re under $200,000, I know to put you at the Sea Mist Resort or Landmark Resort. While these are only a couple examples, do you see how much time you just saved because of the work I’ve already done for you?

Maximizing Long-Term Success

Moreover, your agent's competency extends beyond financial aspects. They prioritize your long-term success, checking that each investment aligns with your objectives and yields consistent cash flow. By negotiating skillfully and strategically, they secure favorable deals that optimize your profitability. A solid and professional agent knows how to create a compelling argument that justifies your position in the deal so that the seller reduces their price. Together, we’ll examine what the seller purchased the property for, if they’ve remodeled the unit, what other similar properties are selling for in the complex and surrounding areas, how long it’s been on the market, and other purchasing strategies and develop in overall sales pitch to buy your property under the asking price.

Remember, what you pay for the oceanfront condo reduces your overall monthly expenses for the property, and buying the property right can make all the difference as to whether you’re profitable.

Embrace Opportunity, Shed Apprehensions

Ultimately, the right agent is your ally in building a robust real estate portfolio. Their expertise, combined with your determination, sets the stage for a prosperous investment journey. Embrace this opportunity, shed apprehensions by being honest with yourself about fear and procrastination, and step confidently into a future brimming with possibilities.

Call today to discuss your next Oceanfront Condo purchase in the Myrtle Beach Real Estate Market: 843-360-1737

Disclaimer: All information given is meant to be educational. This information is not intended to replace your own research, or to provide legal, investment, or financial advice. Please consult an attorney for legal advice.

Is Investing $600k in 1 Condo Worth More than $100k Spread Across 6 Condos

Ocean Reef North Tower.

The top Oceanfront Condo for Gross Rental Income I’ve seen is a 4 bedroom at the Ocean Reef North Tower in North Myrtle Beach. This unit brought in $104,400.12 in Gross Rental Income. On a small note, I will say that I heard from a private property manager about a Penthouse unit that brought in $110,000 annually in Gross Rental Income in North Myrtle Beach.

Now, I have an investor with a 4-bedroom unit that believes their unit has the potential to bring in as much as $120,000 to $130,000 in Gross Rental Income. Theirs is the unit that was currently Grossing $104,400.12 at Ocean Reef. With a light remodel, we believe the unit can perform better.

But for our purposes, let’s set the ceiling at the historical Gross Rental Income of $104,400.12 when spending around $600,000 on an Oceanfront Condo. The following numbers are based on a cash purchase for the unit. After estimated taxes, HO6 Insurance, and annualized HOA dues, the projected profitability is $55,563.76. That’s a 9.4% return on your money.

Considering Appreciation at Ocean Reef.

When investing in Oceanfront Condos, it’s important to consider appreciation because some properties will appreciate more than others. Taking into account the historical appreciation can help you make an informed decision about the overall profitability of the oceanfront condo, especially when comparing more than one condominium. For example, if the units on average appreciate at 100% in one condominium but only 50% in another condominium in 5 years, then considering both the rental income and appreciation and how they each impact your bottom-line profitability should help you make a more informed decision. 

Looking at the Appreciation in Ocean Reef.

The average sold price across all units sold at Ocean Reef North Tower in 2014 was $91,941 while the average sold price of a unit that sold last year in 2023 was $157,941. These units experienced an average appreciation of as much as $66,000 which is a 72% appreciation. Let’s move on to the Sea Mist Resort and see how those numbers wash out.

The Sea Mist Resort.

Now, what if we purchase 6 efficiency Oceanfront units at the Sea Mist Resort? Let’s consider the math.

The following numbers are based on a cash purchase for the unit. The estimated Gross Rental Income on an Oceanfront condo at the Sea Mist Resort is $28,000. After estimated taxes, HO6 Insurance, and annualized HOA dues, your projected profitability per unit is $16,865.90.

Multiplied by 6 units brings us to a projected Gross Rental Income across all 6 units at: $101,195.40. That’s $45,631.64 more in Gross Rental Income than if you purchased the single $600,000 oceanfront condo at Ocean Reef.

Consider Appreciation at Sea Mist Resort.

The average sold price across all units sold at the Sea Mist Resort in 2014 was $45,150 while the average sold price of a unit that sold last year in 2023 was $92,369. These units appreciated as much as $47,219 which is a 105% appreciation.

Comparing Ocean Reef and Sea Mist Resort on Gross Rental Income.

The Oceanfront Condo near the $600,000 purchase price was only estimated with a projected profitability of $55,563.76. While the 6 Oceanfront Condos near the $100,000 purchase price, totally near $600,000 when purchased together, was estimated with a projected profitability of $101,195.40. That’s $45,631.64 more than if you purchased the single $600,000 oceanfront condo at Ocean Reef.

Comparing Ocean Reef and Sea Mist Resort on Appreciation.

By adding 72% appreciation over 10 years to the Oceanfront Condo near the $600,000 purchase price at Ocean Reef brings the appreciated value to $1,032,000.

By adding the 105% appreciation over 10 years to only one Oceanfront Condo near the $100,000 purchase price at the Sea Mist Resort brings the appreciated value to $205,000. When multiplied across 6 Oceanfront Condo units, that’s a total appreciated value of $1,230,000.

The six Oceanfront Condo units at the Sea Mist Resort appreciated by an additional $198,000.

It’s clear to see the winner. By choosing the Sea Mist Resort, you’ll stand to gain as much as $45,631.64 more in Projected Profit and $198,000 more in appreciation. 

Call today to discuss your next Oceanfront Condo purchase in the Myrtle Beach Real Estate Market: 843-360-1737

Disclaimer: All information given is meant to be educational. I am only passing on historical information shared with me by owners, rental companies, and various publications. I am not guaranteeing these numbers, nor can I guarantee future rentals or appreciation. This information is not intended to replace your own research, or to provide legal, investment, or financial advice. Please consult an attorney for legal advice

How Money Market Accounts Cost You!

Your money is sitting in your money market account and yes, it's collecting interest, but the money market account can’t give you appreciation. Not only are you missing out on as much as $246,500 in appreciation, but you’re also missing the better cash on cash returns from the annual gross rental income produced by oceanfront condos.

Off the top of my head, I know of at least four oceanfront condo resorts here in Myrtle Beach South Carolina that generated excellent appreciation over the past 10 years and most of which produced higher cash on cash returns than most money market accounts.

The Sea Mist Resort.

The Sea Mist Resort runs around $100,000 for an efficiency oceanfront unit that in the last 10 years experienced $47,219 in appreciation, much less generates on average $16,865.90 in potential profitability each year (This number includes property management fees but does not include cleaning costs). That’s a cash-on-cash return of 16.86% on your money, much better than 5% you’re getting in your money market and you’ve made $47,219 in appreciation.

The Meridian Resort.

The Meridian Resort averages $170,750 for a 1 bedroom 1 bathroom oceanfront unit that in the last 10 years experienced $106,011 in appreciation, much less generates on average $11,314.73 in potential profitability each year (This number includes property management fees but does not include cleaning costs). That’s a cash-on-cash return of 6.62% on your money, better than 5% you’re getting in your money market, and you’ve made $106,011 in appreciation.

The Sailfish Resort.

The Sailfish Resort averages $405,000 for a 2-bedroom 2-bathroom oceanfront unit that in the last 10 years experienced $246,500 in appreciation, much less generates on average $21,050.65 in potential profitability each year (This number includes property management fees but does not include cleaning costs). That’s a cash-on-cash return of 5.19% on your money, pretty much the same as your money market account, and you’ve realized $246,500 in appreciation.

The Verandas Resort.

The Verandas Resort averages $510,000 for a 4-bedroom 3 bathroom oceanfront unit that in the last 10 years experienced $210,000 in appreciation, much less generates on average around $48,643.91 in potential profitability each year (This number includes property management fees but does not include cleaning costs). That’s a cash-on-cash return of 9.5% on your money, much better than 5% you’re getting in your money market, and you’ve realized the additional $210,000 in appreciated value.

Note: All projected profitability is based on cash purchases.

It’s clear to see that investing in Oceanfront Condos can give you an annual return if profitable and, in addition to your annual return, help you realize the property’s appreciation. This two-one-punch knocks out the competing money market account, leaving investing in oceanfront condo real estate the clear winner.  

Call today to discuss your next Oceanfront Condo purchase in the Myrtle Beach Real Estate Market: 843-360-1737

Disclaimer: All information given is meant to be educational. I am only passing on historical information shared with me by owners, rental companies, and various publications. I am not guaranteeing these numbers, nor can I guarantee future rentals or appreciation. This information is not intended to replace your own research, or to provide legal, investment, or financial advice. Please consult an attorney for legal advice.

How Do I Increase the Occupancy of my Oceanfront Condo?

You’re considering investing in an oceanfront condo in Myrtle Beach South Carolina, and you want to know if there’s an upside besides the potential projected profitability each year, tremendous appreciation over the past 10 years, and the equity that the 20-22 million tourists build in your rental property each year? Well, there is. There’s plenty of room to grow your occupancy, but how do you do that?

Currently, there’s plenty of room to increase the profitability of your rental property by increasing your annual occupancy, but first let’s see just how much room there is to grow so that we can also better understand how the size of the unit impacts its rental performance.

1 Bedroom Units Across All Property Types

The average 1 bedroom rental in our market across all property types averages 147 nights booked, which is 40% of the year, has a daily average rental rate of $113 and brings in between $16,117 and $24,464 each year in Gross Rental Income. 1 Bedroom rental properties make up around 30% of the Myrtle Beach South Carolina rental market.

How does that stack up to 1 bedroom Oceanfront Condos?

At the Landmark Resort for instance, an oceanfront condo with a single King-sized bed in 2023 brought in between $26,000 - $34,000, in Gross Rental Income with the highest rental at $38,500. That’s, on the low end, $9,883 less than you would have gotten by investing in an oceanfront condo at the Landmark Resort, not to mentioned $9,536 less on the higher end. And if your unit performed like Landmark’s highest unit of that type, that a difference of $14,036. One-bedroom Oceanfront Condos at the Landmark Resort run as low as $135,000 to $190,000.  

2 Bedroom Units Across All Property Types

The average 2-bedroom rental in our market across all property types averages 146 nights booked, which is 40% of the year, has a daily average rental rate of $146 and brings in between $22,551 and $33,178 each year in Gross Rental Income. 2 Bedroom rental properties make up around 29% of the Myrtle Beach South Carolina rental market.

How does that stack up to 2-bedroom Oceanfront Condos?

At Beach Colony Resort for instance, an oceanfront condo 2-bedroom unit in 2023 brought in between $47,000 - $55,000, in Gross Rental Income with the highest rental at $72,250. That’s, on the high end of things, $24,449 less than you would have gotten by investing in an oceanfront condo at Beach Colony Resort. And if your unit performed like Beach Colony’s highest unit of that type, that a difference of $39,072. Two-bedroom Oceanfront Condos at Beach Colony Resort run as low as $242,000 to $290,000.  

3 Bedroom Units Across All Property Types

The average 3-bedroom rental in our market across all property types averages 153 nights booked, which is 44% of the year, has a daily average rental rate of $200 and brings in between $31,781 and $46,083 each year in Gross Rental Income. 3 Bedroom rental properties make up around 17% of the Myrtle Beach South Carolina rental market. There’s not nearly as many 3-bedroom units in our market as the 1 and 2 bedroom oceanfront units, and when supply is lower, you can expect to pay more for these units.

How does that stack up to 3-bedroom Oceanfront Condos?

At Beach Cove Resort for instance, an oceanfront condo 3-bedroom unit in 2023 brought in between $69,000 - $71,000, in Gross Rental Income with the highest rental at $76,775. That’s, on the high end of things, $24,917 less than you would have gotten by investing in an oceanfront condo at Beach Cove Resort. And if your unit performed like Beach Colony’s highest unit of that type, that a difference of $30,692. Three-bedroom Oceanfront Condos at Beach Cove Resort run as low as $465,000 to $476,000.  

4 Bedroom Units Across All Property Types

The average 4-bedroom rental in our market across all property types averages 145 nights booked, which is 42% of the year, has a daily average rental rate of $312 and brings in between $56,082 and $77,428 each year in Gross Rental Income. 4-Bedroom rental properties make up only 6% of the Myrtle Beach South Carolina rental market. There’s not nearly as many 4-bedroom units in our market as the 1, 2, and 3-bedroom oceanfront units, and when supply is lower, you can expect to pay more for these units.

How does that stack up to 4-bedroom Oceanfront Condos?

Unfortunately, we don’t currently have information on occupancy, and gross rental income on these units. However, 4-bedroom Oceanfront Condos run as low as $565,000 to as high as $1,275,000 with an average price of $759,960.

5 Bedroom Units Across All Property Types

The average 5-bedroom rental in our market across all property types averages 141 nights booked, which is 39% of the year, has a daily average rental rate of $402 and brings in between $64,611 and $97,526 each year in Gross Rental Income. 5-Bedroom rental properties make up only 3% of the Myrtle Beach South Carolina rental market. There’s not nearly as many 5-bedroom units in our market as the 1, 2, and 3-bedroom oceanfront units, and less than half the 4-bedrooms, when supply is lower, you can expect to pay more for these units.

How does that stack up to 5-bedroom Oceanfront Condos?

Unfortunately, we don’t currently have information on occupancy, and gross rental income on these units. However, 5-bedroom Oceanfront Condos run as low as $475,000 to as high as $2,450,000 with an average price of $1,065,687.

Which unit type should I invest in?

The top performers were a 3-bedroom unit that booked 272 nights and a 4-bedroom that had an average daily rate of $501.

Offer Vacation Packages to Increase Occupancy.

It’s simple. Just offer three different vacation packages to your tenants. One at $500, one at $1000, and one at $1500 and then fill those vacation packages with gift cards to the best restaurants, paid for attractions like shows, local events, and concerts, and even include more concierge options like rose pedals, bath robes, and gifts for him and her.  You’ll most likely find that your tenants will be thrilled that you put this level of work into their vacation, they’ll gladly pay the convenience fee of each package, and most importantly, want to return year after year.

What’s this do for you? Repeat and Loyal Business.

You’re more likely to have satisfied and therefore repeat customers who will rent your property year in and you’re out, repeatedly. Two-things impact your rental business because of the yearly repeat tenants: you can successively build your Gross Rental Income (GRI) each year upon the next year—growing your book of business—and, due to the loyalty of your tenants, you may be insulated from the ups and downs of the rental market. In other words, if the rental market has a bad year overall, because your tenants are loyal, you may not see a significant reduction in Gross Rental Income. They very well could choose to cut expenses elsewhere in their budget because they just don’t want to give up their dream vacation, even when the economy struggles along.

Source: Click Here

Call today to discuss your next Oceanfront Condo purchase in the Myrtle Beach Real Estate Market: 843-360-1737

Disclaimer: All information given is meant to be educational. I am only passing on historical information shared with me by owners, rental companies, and various publications. I am not guaranteeing these numbers, nor can I guarantee future rentals or appreciation. This information is not intended to replace your own research, or to provide legal, investment, or financial advice. Please consult an attorney for legal advice.

Do I Buy as a Second Home or Investment Property: Everything you need to know.

You’re considering an Oceanfront Condo in the second best vacation destination on the East Coast, Myrtle Beach South Carolina and you’re not sure if you should buy the property as an investment property or a second home because after all, you’ll probably want to use it to vacation, right? Here’s the nuts and bolts of it.

Why Do Investors Want to Buy as a Second Home Instead of an Investment Property?

Super simple, because when you buy as a Second Home instead of an Investment Property, you get a better interest rate and a lower down payment. Only a 10% down payment, which is much better than the standard 20% down payment on Investment Property Purchases.

I have a lender that can do a 15% down payment on Investment Property Purchases for Oceanfront Condos. Contact me for details: 843-360-1737 or brandonkunasek@kw.com.

Buying as a Second Home

If you buy as a second home, you can’t rent the oceanfront condo more than 180 days out of the year. Currently, when taking into account the average annual occupancy in the Myrtle Beach South Carolina Rental market, across all property types with units having from 1 to as many as 5 bedrooms, we’ve seen an average of 153 nights booked in 2023 as the high for a 3-bedroom unit, except for the top performer. This is only 42% of the year.

Source: Click Here

So, if you don’t plan on building a book of business that successively grows year after year, increasing your annual occupancy, it shouldn’t be an issue to buy the Oceanfront Condo as a Second Home.

However, if you’d like to build your property’s book of business so that you can maximize your Gross Rental Income and ultimately, your profitability, then you should purchase the property as an investment property instead of a second home. Take for instance the top performer in the Myrtle Beach South Carolina rental market, a 3-bedroom unit that rented for 272 nights! If you’d like to see this type of traffic, then buying the oceanfront condo as an investment property is simply the right move.

You Must Occupy for 3 Weeks

When buying an oceanfront condo as a second home, you must occupy the unit for at least 3 weeks out of each year. If you’re interested in maximizing your Gross Rental Income then you shouldn’t use it during the peak season, which in the Myrtle Beach South Carolina market is April through September of each year.

During peak season, you can charge premiums on your rentals as vacationers—to the tune of 20 to 22 million—visit the Myrtle Beach area. So don’t use your unit during this time.

Qualify with Current Housing & New Housing Expense

When buying an oceanfront condo as a second home, if you finance, you must qualify with both your current housing expense and the new expense of the Oceanfront Condo. Now, when buying as an Investment Property, there’s a major perk here as compared to buying as a Second Home, which will cover later.

You Can’t Live Within 75 Miles of Primary Residence

When buying an oceanfront condo as a second home, your primary residence can’t be within 75 miles of your Second Home. This works out well for Out-of-State investors but it’s not advantageous to local residents.

Buying as a Second Home provides you with a lower down payment and a cheaper interest rate and works well for investors interested in using the property as a vacation home for at least 3 weeks out of each year.

Buying as an Investment Property

When buying as an Investment Property, you can rent the Oceanfront Condo for more than 180 days each year, unlike when buying it as a Second Home. And when considering the top performing 4-bedroom unit across all property types in the Myrtle Beach South Carolina rental market, having a $501 average daily rate, you can easily see how it’s advantageous to rent your property more than 180 days each year.

Offset the New Housing Expense

When buying an oceanfront condo as an Investment Property, if you finance, you must qualify with both your current housing expense and the new expense (mortgage) of the Oceanfront Condo. Only on an investment property can lenders use the Historical Gross Rental Income that the unit has produced in the previous year to offset your housing expenses. If the rental income is $1500 per month and your current housing costs are $1500 per month on your primary residence, then the new payment is considered offset and doesn’t impact your debt-to-income ratio so that it’s easier to qualify for the loan. This is a huge benefit when purchasing as an Investment Property compared to buying as a second home.

Pro Tip: Have your real estate agent find Oceanfront Condos that have historical rental income so that it’s easier for you to qualify for your loan.

No Restriction on Primary Residence

When buying an Oceanfront Condo as an Investment Property, there aren’t any restrictions on where your primary residence is located. So, if you’re a local resident that lives right here in Myrtle Beach South Carolina or the surrounding areas, you can purchase an Oceanfront Condo as an Investment Property but not as a Second Home if you live within 75 miles.

Don’t Forget 1031 Like/Kind Exchange

As an investor, you’ll most likely want to purchase the Oceanfront Condo as an Investment Property so that it qualifies for a 1031 Like-kind Exchange. According to the IRS, “Like-kind exchanges -- when you exchange real property used for business or held as an investment solely for other business or investment property that is the same type or “like-kind” -- have long been permitted under the Internal Revenue Code.” There are benefits to 1031 Like-kind exchanges and you should consult your Certified Public Accountant or Attorney for more information.

For More Infor: Click Here.

Call today to discuss your next Oceanfront Condo purchase in the Myrtle Beach Real Estate Market: 843-360-1737

Disclaimer: All information given is meant to be educational. I am only passing on historical information shared with me by owners, rental companies, and various publications. I am not guaranteeing these numbers, nor can I guarantee future rentals or appreciation. This information is not intended to replace your own research, or to provide legal, investment, or financial advice. Please consult an attorney for legal advice.