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.