Short-Term Rental Performance at Holiday Sands South (Myrtle Beach) – An Investor Case Study

Introduction

Holiday Sands South (at South Beach on the Myrtle Beach Boardwalk) is a popular oceanfront condominium resort that has long been a favorite for family vacations. This case study provides a detailed, investor-focused analysis of short-term rental performance at Holiday Sands South in 2023–2024. We compare oceanfront vs. oceanview units across various sizes (1BR, 2BR, 3BR), examining current rental income, occupancy, and long-term appreciation trends. We also analyze guest reviews from Airbnb, VRBO, and Booking.com to understand profitability drivers, and discuss renovation strategies, self-management tools for Airbnb/VRBO, and common guest preferences. Additionally, we evaluate the impact of the HOA fee structure on profitability and explore investment strategies like 1031 exchanges and using self-directed retirement accounts (401(k)/IRA) for purchasing rental condos. The goal is to give prospective investors a comprehensive financial case study of Holiday Sands South condos as short-term vacation rentals.

Property Overview: Holiday Sands South on the Boardwalk

Holiday Sands South is a 12-story oceanfront condo tower completed in 2006 on the south end of Myrtle Beach’s famous Ocean Boulevard. The resort actually consists of “two properties in one” – an older renovated hotel building and a newer modern condo tower – operating together under the Holiday Sands South Vacations management. All condominium units in the resort are either one-bedroom or two-bedroom layouts (with a rare three-bedroom penthouse suite), offered in both direct oceanfront and ocean-view orientations. The one-bedroom units range from ~650 to 764 sq. ft., while two-bedroom units range up to ~1,180 sq. ft.. Typical features include private balconies (with either full oceanfront or angled ocean views), full kitchens, and in-unit WiFi. Notably, some one-bedroom condos include innovative space-savers like Murphy beds that convert into dining tables, maximizing utility in smaller floor plans.

Amenities: As an oceanfront resort, Holiday Sands South offers extensive family-friendly amenities. These include multiple indoor and outdoor pools, a lazy river, hot tubs, kiddie splash pools, and a spacious oceanfront sunning lawn with lounge chairs. There is an on-site fitness center, an arcade, and even an oceanfront café/restaurant serving guests. Guests benefit from enclosed climate-controlled corridors and a secured parking garage. Daily housekeeping and on-site rental/concierge services are available, as the complex operates partly like a hotel. Holiday Sands South’s location is a strong asset – on the quieter south end of the Myrtle Beach Boardwalk, but still close to major attractions (less traffic yet minutes from Market Common, the airport, and other attractions). Overall, the property combines “traditional hotel rooms [in the older section] and modern 1 & 2 bedroom condominiums [in the new tower]”, maintaining a reputation as an affordable, family-friendly oceanfront destination.

HOA Structure: Each condo unit is part of a homeowners association that provides an all-inclusive maintenance structure. Monthly HOA fees range from roughly $600 to $1,100 (varying by unit size and view). These fees cover almost all utilities and services – including electricity inside the unit, water/sewer, cable TV, high-speed internet, pest control, landscaping, building insurance, common area maintenance, security, and use of all amenities. Essentially, owners have most operating expenses bundled into the HOA dues, which simplifies budgeting. For example, a 1BR unit might incur about $650/month in HOA fees, while a 2BR oceanfront unit’s HOA might be around $1,000/month. This comprehensive coverage ensures a hassle-free experience for owners and guests, but the high HOA cost significantly impacts net profitability, as we will examine in the financial analysis.

Rental Market Performance (2023–2024)

Occupancy and Demand Trends

Myrtle Beach is one of the nation’s most active vacation rental markets, with 2023–2024 short-term rental occupancy averaging around 55–60% annually in this area. Occupancy is highly seasonal: Summer is the peak – “55% of annual vacation rental revenue is generated in June, July, and August” for Myrtle Beach rentals. During the summer high season, well-marketed units often achieve near 90–100% occupancy at premium nightly rates, whereas winter months see much lower occupancy (aside from monthly “snowbird” rentals). Key Data analytics for Summer 2023 showed some softening in demand: as of spring 2023, “occupancy on the books” for Summer was pacing around 39% vs 58% at the same time the previous year (2022), indicating a year-over-year demand decline. This was partly due to a surge in new rental supply (9% more listings year-over-year) combined with slightly lower guest demand. Despite that, last-minute bookings picked up closer to the summer, given that ~33% of reservations tend to be made within 30 days of arrival in Myrtle Beach. Overall, for full-year 2023, Myrtle Beach short-term rentals had an average occupancy around 55–60% and an average daily rate (ADR) around $150–$250 depending on property size/quality. This translates to an average annual revenue of about $27,000 per listing in this market (note: this average includes all property sizes – from small studios to large beach houses).

At Holiday Sands South specifically, demand remains strong given the prime oceanfront Boardwalk location and on-site amenities. The resort caters to families and couples who often return yearly. One metric of demand is the volume of guest reviews: Many Holiday Sands South condo listings on VRBO have 50–150+ guest reviews, indicating high booking turnover. For example, an oceanfront 1BR unit dubbed “All the comforts of home!!” received 161 guest reviews (rated 10/10), and a 2BR condo had 124 reviews with a 9.8/10 rating – extremely high for individual condo listings. Such review counts imply these units have been rented successfully dozens of times per year over multiple years, underscoring healthy occupancy. The average booking lead time in Myrtle Beach is about 2–3 months (87 days), which is longer than many markets – this gives owners an opportunity to open calendars early and secure summer reservations well in advance (although many guests also book last-minute, as noted). An interesting trend is that direct bookings account for ~28% of reservations in Myrtle Beach (higher than the U.S. average), meaning a significant portion of guests book through on-site or direct channels rather than third-party OTAs. Holiday Sands South benefits from an on-site rental program and repeat guests, contributing to a solid direct booking base (which can reduce commission costs and increase net income).

Rental Rates: Oceanfront vs. Oceanview

One major performance factor for units in this resort is whether they are oceanfront or oceanview. Oceanfront units (those facing directly east toward the ocean) command a premium in both rental rates and occupancy. Guests will pay extra for unobstructed ocean vistas and the soothing sound of waves from the balcony. Oceanview units, which have partial or angled views (often on the side of the building), still generate strong income but typically at slightly lower nightly rates and maybe a touch less demand. Based on local investor experience, direct oceanfront condos can command roughly 10–20% higher nightly rates than comparable oceanview units in the same building, all else equal (this premium is most pronounced in peak summer). For example, in peak July weeks an oceanfront 1BR might rent for, say, $200/night while an otherwise identical oceanview 1BR might rent for $170–$180/night. Over the full year, this can mean several thousand dollars difference in gross income.

However, oceanview units often cost less to purchase, which can equalize returns. At Holiday Sands South, a 2BR oceanview condo (Unit 913) sold in April 2024 for $267,500, whereas 2BR oceanfront units of similar size have been on the market around $300K+ (one active listing for a direct oceanfront 2BR was $318,900). The HOA fees for oceanview vs oceanfront are usually similar for the same unit size (since HOA is based on unit square footage and shared amenities, not the view). Thus, an investor must weigh paying a higher price for oceanfront against the higher income. In many cases, the cap rate (net yield) ends up comparable, but oceanfront may appreciate slightly better over time due to premium location within the resort.

Current Rental Income Levels: To illustrate 2023–2024 income, we draw on actual figures from recent Holiday Sands South units and similar Myrtle Beach oceanfront condos:

• A 1BR/1BA oceanfront condo at Holiday Sands South recently grossed about $27,500 in annual rental income, and another similar 1BR grossed $34,600/year, according to local brokerage data. These units sold for approximately $148,000 and $204,000 respectively (the difference likely due to one being updated or having better view/floor level). This implies that a well-kept 1BR can generate around $30K± per year in gross rent, which is roughly 15% of the property value in these examples.

• A 2BR/2BA oceanfront condo (larger unit) showed gross rental income of $52,700 in a year, on a purchase price of $379,000. That’s about $50K+ annual gross for a 2BR unit – consistent with expectations that two-bedroom units can earn mid-five-figure incomes if managed effectively.

• Smaller units (there are also some studio or “efficiency” units in Myrtle Beach resorts) have lower income: one example was an oceanfront efficiency that grossed $18,000/year on a $102,000 purchase. (Holiday Sands South’s condo inventory is mainly 1BR and 2BR as noted, but the older section of the resort might have had some studio-style hotel rooms in the past).

In general, 1BR units at Holiday Sands South tend to gross on the order of $20–$35K/year, and 2BR units tend to gross around $40–$55K/year in the current market, assuming decent marketing and high season availability. Oceanfront 3BR units (if available) could potentially gross in the $60–$70K+ range annually, but as Holiday Sands South has no standard 3BR condos (just a penthouse suite), investors seeking 3BR income would typically look at larger resorts or nearby condo-hotels with 3BR offerings.

It’s important to note that 2023 saw ADR (average daily rates) in Myrtle Beach up slightly (~+3–9%) from the prior year, even as occupancy softened. For example, one analysis showed Summer 2023 ADRs around $423/night on average for Myrtle Beach rentals (across all sizes) – a 9% increase – but with occupancy down, the net RevPAR was lower year-over-year. For an individual condo, setting competitive rates and adjusting to demand is key. Many owners use dynamic pricing tools (PriceLabs, Beyond Pricing, etc.) to optimize rates, which can add 10-15% in revenue by pricing higher on high-demand days and lowering price to fill gaps. Given that Myrtle Beach’s booking window is relatively long but with a lot of last-minute action, having agile pricing strategies is critical in maximizing occupancy and revenue.

Example Financials by Unit Type (2024 Estimates)

The table below summarizes example financial performance for different unit types at Holiday Sands South, using recent data and realistic assumptions for 2023–2024:

Notes: These figures assume the units are self-managed or managed by an off-site company with ~20% commission. If the owner instead joins the on-site rental management program (which often charges around 40–50% commission on gross rents in Myrtle Beach condotels), the net income would be substantially lower. For instance, a 1BR grossing $30K would net perhaps $15K before fixed expenses under a 50% management commission – barely breaking even after HOA and taxes. This is why many investors opt to self-manage via Airbnb/VRBO to retain more of the income. In the table above, “Net Operating Income” (NOI) is calculated before any mortgage payments – essentially assuming a cash purchase to isolate property yield. If financed, one would need to subtract debt service to determine cash flow.

From the example data, we see cash-on-cash returns (NOI divided by purchase price) in roughly the 6–10% range for self-managed units – not counting appreciation or tax benefits. The 1BR condos often show higher proportional yield (8–10% range) because their purchase prices are lower relative to income (they are “little money machines” as one local realtor says). The 2BR units have a slightly lower percentage yield (maybe 7–8%) but higher absolute cash flow. These returns are quite solid for real estate, especially when combined with personal use (owners can block off time to enjoy their condo, though doing so reduces rental days). Keep in mind, HOA dues are a large fixed expense – e.g. $10K/year on a 2BR is ~20% of gross income – so maintaining high occupancy in peak season is critical to cover the HOA and still profit.

HOA Impact: The HOA fees at Holiday Sands South, while high, cover expenses an owner would otherwise pay separately (electric, water, cable/internet, building insurance, etc.). For instance, the HOA includes building insurance but an owner still needs contents insurance and liability (a smaller cost). The HOA also covers most maintenance of common areas and amenities, leaving owners mainly responsible for interior upkeep. This means unexpected costs are lower (no surprise roof assessments since it’s included in HOA reserve, etc.). But investors must factor in HOA increases over time – these can erode cash flow if rental rates don’t keep up. Currently, HOA fees here cover a “comprehensive list of services…ensuring a hassle-free experience”, which appeals to out-of-town owners who want hands-off maintenance.

Long-Term Appreciation Trends

In addition to rental income, investors care about property appreciation. Holiday Sands South units have generally appreciated along with the Myrtle Beach condo market. Back when the new tower opened in 2006–2007, one could buy a unit for under $100K (the developer advertised “your very own piece of Myrtle Beach – starting at $99,900”). After the 2008 financial crisis, oceanfront condo prices in Myrtle Beach dropped significantly, then slowly recovered over the 2010s. In recent years, the market surged: many oceanfront condos saw double-digit percentage appreciation from 2020 to 2022, fueled by a hot real estate market and increased demand for drive-to vacation destinations. As of 2024, 1BR condos at Holiday Sands South typically list around $185K–$240K, and 2BR condos around $255K–$335K (some larger or corner units pushing higher). In fact, the estimated value range for units in this building is about $185,000 up to $487,000 (the upper end likely reflecting rare larger combined units or penthouse suites). The median listing price in 2024 is roughly $275K for the Holiday Sands area.

Investors can expect moderate long-term appreciation in such oceanfront condos – historically perhaps 3-5% annualized over a full market cycle, though it comes in spurts. Location is prime (on the beach and near the Boardwalk attractions), which supports values. One should be aware of supply: Myrtle Beach continuously adds new resorts and there are many competing condo-hotels, which can keep appreciation in check compared to scarce inventory markets. Still, owning a well-located oceanfront unit provides a hedge as land along the coast becomes more built-out. Renovated units in older resorts like Holiday Sands South often see better appreciation than non-updated ones, as buyers increasingly prefer turn-key, modern interiors. This leads to the next topic – guest preferences and renovation impact.

Guest Reviews, Preferences, and Renovation Impact

What Guest Reviews Say (Airbnb/VRBO/Booking.com)

Holiday Sands South enjoys generally positive guest feedback on major rental platforms, but there is a range depending on unit condition. On VRBO and Airbnb, individually managed units often boast 4.8–5.0 star ratings. For example, one VRBO guest titled their review “A perfect retreat!” for a 1BR condo and rated it 10/10, citing an exceptional experience. Common praise in reviews includes: excellent location right on the beach, the convenience of multiple pools and the café, and good value for the money. Guests love waking up to ocean views from the balcony and many mention that the condos are “clean and spacious” with well-stocked kitchens (TripAdvisor reviews echo this). Families appreciate the kid-friendly amenities (lazy river, splash pool) and often mention returning year after year.

However, some reviews (especially on hotel sites like Booking.com) point out issues in certain units or during certain stays. For instance, a Booking.com reviewer noted that “public areas [were] not very clean…hallway smelled like pot” and that their particular room was dated. Another mentioned maintenance issues with plumbing and that the room felt hot. These mixed reviews highlight an important fact: not all condos are equal – some units are older or not renovated, leading to lower guest satisfaction. The on-site rental program may include units that haven’t been updated by their owners, which can drag down the resort’s average review score. Currently Holiday Sands South’s hotel is ranked mid-pack in Myrtle Beach (TripAdvisor ranks it around #90 out of ~200 hotels, with ~3.5 stars average). But the best individual condos managed via Airbnb/VRBO have stellar reviews. This divergence means an investor has control: by updating and attentively managing their unit, they can achieve top-notch guest reviews which drive more bookings and higher rental rates.

Common Guest Preferences: Based on review analysis and industry trends, guests in 2023–24 tend to prefer:

• Modern, updated interiors: Renters gravitate to units with fresh decor, new appliances, and contemporary furnishings. Words like “updated” or “renovated” in a listing attract more bookings. Many positive reviews mention new flooring (e.g. luxury vinyl plank instead of old carpet) or modern kitchen appliances. Owners who advertise “newly remodeled” often can charge a premium.

• Cleanliness: This is absolutely critical. Guests expect hotel-level cleanliness. Many VRBO “Premier Host” listings at Holiday Sands boast of deep cleaning and “super clean” in the title. Any lapse here gets called out in reviews.

• Comfort and amenities in-unit: This includes comfortable beds, a good quality sleeper sofa, fast WiFi (essential for families and remote workers), and entertainment options (smart TV with streaming). One highly-rated listing touts a 65" Roku TV and fast WiFi right in the title, indicating how important these are to guests. Units with an in-unit washer/dryer (some 2BRs have them) also get an edge for longer stays.

• Keyless entry & easy check-in: Many Airbnb guests appreciate digital key codes so they can do self check-in without front desk lines. Self-managed units typically offer this, whereas hotel-managed units have traditional keys.

• Balcony and view: Guests specifically love the balcony experience – many mention having coffee on the balcony watching the sunrise. Even for oceanview units, highlighting the balcony and any view is important.

• Resort amenities: While these are common to all units, many guests mention how much they enjoyed the pools, lazy river, etc. A unit that provides beach gear (chairs, umbrellas, boogie boards) can earn extra points in reviews, as it shows thoughtfulness.

In summary, guest feedback underscores that an updated, clean condo with a great view and smooth check-in will perform best. Owners who deliver on these preferences see it reflected in higher ratings and often repeat bookings.

Renovation and Upgrade Strategies

Given the above, renovation strategies play a key role in boosting both rental income and property value. At Holiday Sands South, some units have been fully remodeled with high-end finishes (e.g. granite counters, tile showers, LVP flooring, stainless appliances) and others remain in 2007-era condition. Renovating a condo might cost $10K–$20K for a 1BR (more if a full kitchen remodel) but can improve annual rental revenue by several thousand dollars and increase the resale value significantly more than the renovation cost. Savvy investors often:

• Upgrade flooring – replacing carpet (which wears out quickly in rentals) with durable LVP or tile. This not only looks modern but is easier to clean (guests perceive it as cleaner too).

• Update the kitchen – new appliances, new cabinet faces or a coat of paint, and adding a backsplash can make the kitchen feel high-end. Since these are often advertised as having “full kitchens,” making it attractive is a plus.

• Bathroom refresh – replacing an old tub insert with tiled walls or installing a modern vanity and new lighting can transform the bathroom. Some owners add a walk-in whirlpool or tiled shower; in fact one listing highlights a “new bidet toilet seat and walk-in whirlpool” added in the master bath as a selling point.

• New furniture and decor – especially the sofa bed (ensure it’s comfy), bedding, and balcony furniture. A beachy, contemporary style with pops of color photographs well for the listing. Many owners hire local designers or use feedback like “unit shows in pristine condition” as a result of remodels.

• Smart features – a smart lock, thermostat, and noise monitor can help manage remotely. While guests don’t always mention these directly, they appreciate a cool, comfortable room and a seamless entry.

The return on investment for such upgrades is twofold: immediate rental boost (higher rates and occupancy due to better reviews and photos) and long-term value. Buyers in the resale market pay a premium for a unit that’s turnkey with a solid rental history. In Myrtle Beach, remodeled units often sell faster and closer to asking price.

Management and Profitability Strategies

On-Site Management vs. Self-Management

Holiday Sands South offers professional on-site rental management for owners who want hands-off income. This means the resort’s staff will handle bookings (often through the hotel website and travel agents), front-desk check-in, and cleaning. While convenient, the cost is steep: typically around 45–50% of gross rental revenue goes to the management in condotel programs (this covers marketing, cleaning, credit card fees, etc.). Many legacy owners use this program, but the trend for newer investors is to self-manage via platforms like Airbnb and VRBO to improve net income.

With self-management, owners list the property on Airbnb, VRBO, Booking.com, etc., and handle guest communication, pricing, and coordinating cleaning themselves (or with hired local cleaners). The platforms charge a much smaller fee (Airbnb ~3% host fee, VRBO ~8% guest fee) compared to on-site management. The trade-off is the owner’s time and effort to manage turnover and guest support. However, technology has made remote management far easier:

• Channel managers and PMS: Tools like Guesty, Hostfully, or Lodgify allow owners to manage bookings across Airbnb/VRBO/Booking.com in one calendar, preventing double-bookings and automating messages.

• Dynamic pricing tools: As mentioned, services like Beyond Pricing or PriceLabs plug into your listings and adjust nightly rates based on demand, events, and occupancy goals. This can significantly optimize revenue without constant manual effort.

• Local support team: Successful self-managers usually partner with a reliable cleaning service that does turnovers and reports any maintenance issues. Many also have a handyman on call. The cleaning fee is usually paid by guests (as a separate fee on Airbnb), so the owner just coordinates it.

• Self-check-in: Installing a keyless smart lock or lockbox enables guests to check in with a code. Owners simply email or message the code, often automatically via the booking system. This eliminates the need for an in-person key exchange and is highly preferred by guests who may arrive late.

• Monitoring and safety: Products like NoiseAware (which detects noise spikes) and security cameras outside the unit (like at the front door) can help enforce house rules (e.g., no parties, no smoking). These protect the property and nearby guests without violating privacy inside the unit.

By self-managing, owners at Holiday Sands South commonly save tens of thousands in management fees, directly boosting their cash flow and ROI. For instance, that 2BR example grossing $50K – if on-site managed at 45% fee, the owner would only get $27.5K before HOA/expenses; if self-managed, the owner keeps most of $50K minus maybe $5K in platform fees/cleaning, so perhaps $45K. That difference alone ($17.5K) covers the annual HOA and then some. Many investors find that self-management is the only way to make a high-HOA condotel cash flow positive. It does require treating it like a business – responding to inquiries promptly, keeping the calendar updated, and maintaining high cleaning standards to sustain those 5-star reviews. Some owners who don’t live locally hire a local co-host or property manager for a smaller fee (maybe 10-20%) to handle on-the-ground tasks while still using Airbnb/VRBO for marketing – a hybrid approach.

Maximizing Profitability

Beyond choosing the right management approach, investors can employ several strategies to maximize profitability:

• Target the right rental niches: Myrtle Beach gets a variety of guests – families in summer, golfers in spring/fall, snowbirds in winter. Adjusting minimum stay requirements and marketing to these groups can extend the rental season. For example, offering monthly discounts in Dec-Feb can attract winter “snowbird” renters for 1-3 month stays, bringing in income during the off-season (and reducing wear-and-tear from weekly turnovers). Holiday Sands South does advertise “Snowbirds” specials in winter.

• Dynamic minimum stays: Use shorter minimum stays (2-3 nights) during shoulder seasons to capture weekend getaways, but longer minimum stays in peak season (5-7 nights in July) to ensure full-week bookings that maximize occupancy and reduce turnover costs.

• Monitor competitors: There are ~48 rental listings at Holiday Sands South on VRBO alone. An investor should keep an eye on comparable listings’ calendars and prices. If all similar units are filling up and yours isn’t, it’s likely price or listing quality. If competitors slash prices for an approaching low-season weekend, you might do the same to get a booking instead of sitting empty.

• Offer perks: Little extras can generate goodwill and repeat bookings. Some owners leave a welcome basket (snacks or a list of local recommendations), provide beach towels or sand toys, or allow use of an Amazon Fire Stick/Netflix account on the TV. These small touches often lead to better reviews.

• Expense management: While HOA is fixed, owners can save on other expenses – for instance, getting a good insurance rate for contents/liability (bundling multiple properties if they have more than one), and ensuring the condo’s energy usage is controlled (smart thermostats can limit AC not running full blast when balcony doors are open, etc., since the owner ultimately pays the electric via HOA). Keeping a moderate temperature set when unit is vacant can prevent extremely high electric draw (though HOA covers electric here, in some condos it doesn’t – in Holiday Sands South it does include electric, so that’s less of an issue for individual budgeting).

Advanced Investment Considerations

Tax-Deferred Strategies (1031 Exchange)

Investors looking at Holiday Sands South also consider 1031 exchanges and other tax strategies when buying or selling. A 1031 Exchange (named for IRS Code Section 1031) is a powerful tool that allows real estate investors to defer capital gains taxes when they sell an investment property, by reinvesting the proceeds into another “like-kind” property of equal or greater value*. For example, an owner could sell their Myrtle Beach condo that has appreciated and roll the gains into purchasing a larger condo (or multiple condos) elsewhere, paying no capital gains tax at sale. The catch is strict timelines – identifying replacement property within 45 days and closing within 180 days – and the need to use a qualified intermediary to hold funds. The benefit is tax deferral: essentially, the owner can re-leverage pre-tax dollars into a new investment, enhancing buying power and portfolio growth. Some investors use 1031s to “level up” from a smaller 1BR to a 2BR, or from one condo to multiple cheaper condos, or even to diversify into other rental markets, all while deferring taxes. Eventually, if they keep exchanging, the capital gains tax can be deferred indefinitely (or eliminated if the owner holds until death, as heirs get a stepped-up basis – a common long-term estate planning angle with 1031s).

Holiday Sands South condos qualify as 1031 exchange properties since they are investment real estate. An investor who has built substantial equity might consider selling if the market is high and using a 1031 to buy a property in a different market or a different type (say, a duplex or a beach house) that might offer higher returns, without incurring immediate tax. It’s worth noting you cannot 1031 exchange into a property that you immediately use primarily as a residence; it needs to be held as an investment (though eventually one can convert a 1031 property to personal use by following IRS guidelines).

Using Self-Directed Retirement Accounts (IRA/401k)

Another advanced strategy is purchasing rental condos through a self-directed IRA or 401(k). Some investors use a Self-Directed IRA (SDIRA) or Solo 401k to invest retirement funds into real estate. The advantage is that all rental income and appreciation grow tax-deferred (or tax-free in a Roth SDIRA). For example, if you have $300K in a rollover IRA, you could purchase a condo inside the IRA. All rent would go back into the IRA, and all expenses paid from IRA funds. This can supercharge retirement growth if the property performs well, since you’re not paying taxes on the cash flow in the meantime.

However, there are crucial rules: no personal use is allowed (the IRS prohibits self-dealing, so you or your family cannot vacation in the condo if it’s IRA-owned), and all funds for expenses (and receipt of income) must flow through the IRA custodian. Many investors create an IRA-owned LLC (often called a Checkbook IRA) for ease of paying bills. Also, if the SDIRA uses financing (a mortgage), it must be a non-recourse loan and can trigger some tax (UBIT) on the leveraged portion. Despite complexity, it is a viable way to use retirement funds for those who are very investment-minded and don’t need the liquidity until retirement.

A self-directed Solo 401(k) (for self-employed individuals) can similarly purchase real estate. Solo 401ks have the advantage of not incurring UBIT tax on leveraged real estate, making them even more attractive for real estate investment. The key is that using retirement funds is essentially another form of tax deferral: “all gains from investment properties held within your Self-Directed IRA are tax-deferred” as long as they stay in the account. Upon retirement, you can withdraw or even take the property as a distribution (taxable if traditional). Some investors basically buy a vacation rental in their IRA, rent it out for years growing the IRA, and then plan to take it as a distribution in retirement (paying taxes then and perhaps using it themselves at that point).

For those considering this at Holiday Sands South, they must treat it purely as an investment property until they remove it from the IRA. Also, any repairs or upgrades must be paid from the IRA funds, so adequate reserves are needed. And you cannot personally manage it in a way that’s considered providing “sweat equity” – so you’d hire cleaners and contractors rather than fixing a toilet yourself (that would be a prohibited transaction if you provide free labor to your IRA-owned property). Given these restrictions, not all investors choose this route, but it’s worth mentioning as it can be advantageous for some.

401(k) Loan or 401(k) Real Estate Investing

Aside from SDIRAs, some investors tap their 401(k) via a 401k loan to help buy a condo. If your 401k plan allows a loan, you can borrow (typically up to $50K or 50% of the balance) and use it for the down payment. You then pay yourself back with interest. This can be a way to access retirement money without outright distribution (which would be taxable) to invest in a rental property. Essentially you become both borrower and lender to yourself. This strategy has limits (loan must be repaid usually in 5 years, or longer if it’s for a primary home purchase – but a vacation rental wouldn’t qualify as primary home). It can be risky if one loses their job (the loan can become due), but it’s an option to consider for funding.

Overall, strategies like 1031 exchanges and retirement account investing allow investors to grow their real estate portfolio efficiently. A 1031 exchange lets you compound investments without the drag of taxes as you trade up properties, while a self-directed retirement account can turn a vacation rental into a high-yield retirement asset sheltered from current taxes. Both require planning and professional guidance (1031 intermediaries, SDIRA custodians, CPA advice), but they highlight the flexibility investors have beyond just buy-rent-sell in a taxable account.

Conclusion

Investing in a short-term vacation rental at Holiday Sands South on the Boardwalk can be a profitable venture when approached strategically. This oceanfront resort combines an unbeatable location, strong amenity package, and a mix of unit types that appeal to a broad tourist base. In 2023–2024, rental performance has been robust – with 1BR units grossing around $25–$35K and 2BR units $45–$55K in annual rent – although increased competition means owners must actively manage pricing and guest experience to capture demand. Oceanfront units tend to lead in income (and long-term appreciation), but oceanview units can offer solid returns for a lower entry price.

The key to success lies in delighting guests and managing efficiently. Top-performing units are those with modern renovations, sparkling cleanliness, and responsive hosts – evidenced by their 5-star reviews and repeat guests. By investing in upgrades and leveraging tools for self-management, owners can significantly improve their net income (often outpacing on-site managed units by a wide margin). The HOA fees, while high, simplify ownership and cover nearly all operating costs, turning the investment into more of a fixed-cost business where every dollar above the HOA and taxes is profit. Thus, maximizing revenue (through occupancy and rate strategies) is paramount.

In the long run, owners have multiple ways to build wealth: enjoying annual cash flows, riding the wave of property appreciation on the Myrtle Beach oceanfront, and utilizing tax-savvy moves like 1031 exchanges to upgrade their portfolio without tax leakage. Even retirement funds can be employed to invest in these rentals, under the right structures, allowing for tax-deferred rental income growth inside an IRA/401k.

Holiday Sands South demonstrates how a well-located vacation condo can be both a lifestyle asset and a financial asset. An investor can not only earn solid returns and build equity, but also have the option to personally enjoy the beachfront life in the off-season (so long as the property isn’t in a retirement account!). As with any investment, due diligence is vital – analyzing rental comps, reviewing HOA financials for any upcoming fee changes or assessments, and perhaps most importantly, having a plan for management and maintenance. With prudent management, a focus on guest satisfaction, and smart use of real estate investment tools, owning a condo at Holiday Sands South can yield rewarding income today and significant financial upside in the future.

Sources: Recent market data and examples have been drawn from local Myrtle Beach real estate reports and listings, including gross rental income figures for comparable units, HOA fee disclosures, and industry analytics on occupancy and rates. Guest sentiment and preferences were gleaned from online reviews on VRBO, Booking.com, and TripAdvisor. Additionally, tax and investment strategy information was referenced from IRS guidelines and financial expert analyses to ensure accuracy. This comprehensive approach provides a data-driven foundation for evaluating the short-term rental investment potential at Holiday Sands South, Myrtle Beach.

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.