Kings Grant Villas (North Myrtle Beach) – Investment Case Study

Property Overview. Kings Grant Villas is a low-rise condominium complex at 311 2nd Ave N (Ocean Drive) in North Myrtle Beach, SC, built in 2005. The community includes 2–3-bedroom units with modern furnishings, a heated outdoor pool and hot tub, clubhouse and elevators. Units are fully furnished (listed as turnkey-ready) and within a 1½-block walk of Cherry Grove Beach. The HOA fee is $435/month (covers common areas, cable TV/internet, grounds, pool, pest control, water/sewer, security, etc.). Short-term rentals are expressly allowed by the HOA (no minimum owner occupancy or tenure rules), but the community prohibits motorcycles, trailers and golf carts for renters (only owners may use golf carts on-site). North Myrtle Beach is currently a top U.S. vacation-home market (ranked #1 nationwide in a 2025 survey) with strong tourist demand.

Market Context (North Myrtle Beach STR vs LTR)

• Occupancy & ADR (STR): AirDNA reports North Myrtle Beach average occupancy ≈57% and average daily rate ≈$341. By bedroom count, 2BR condos comprise ~32% of listings and 3BR ~29%. These market averages suggest robust demand in summer (peak ADR ~$300–$350+) and moderate winter rates.

• Long-Term Rents: By contrast, Zillow Rental Manager shows average monthly rent in NMB is about $1,825. For example, a 2BR/2BA condo might rent for ~$1,600–$1,800/month, and a 3BR for ~$1,800–$2,200. (One Zillow report cites average rent $1,825.) This yields annual gross rent roughly $18K–$21K (2BR) vs ~$24K–$26K (3BR) in a long-term lease. By comparison, STR gross incomes are substantially higher, as shown below.

• Cap Rates (STR vs LTR): Industry data indicate STR cap rates (~9–10%) roughly double those of traditional rentals (~5–6%) in the Myrtle Beach area. For example, Mashvisor shows a typical North Myrtle Beach Airbnb cap ~10% vs ~5–6% long-term, reflecting the higher per-night revenue potential of vacation rentals.

Projected Rental Income by Unit Type

• Assumptions: Occupancy ~57% (AirDNA); seasonal ADR examples (a VRBO shows a 3BR listing at ~$367/night peak); off-season ADR lower. Gross annual = ADR×365×Occ%. We assume ~30% of gross goes to operating costs (management, maintenance, taxes, utilities) for net income.

• Estimates: A typical 2BR might gross on the order of $50K/year (≈$48K in our table) and net ~$35K. A 3BR (around 1,500 sq ft, per a recent sale) could gross ~$72K/year and net ~$50K. By contrast, long-term rent (LTR) at ~$1,700–$2,000/month yields ~$20–24K gross annually. Thus STR gross revenues are roughly 2–3× LTR gross for the same unit.

HOA Rules & Local Regulations

• HOA Fees: $435/month. Fee covers water/sewer, cable/internet, security, pool maintenance, grounds, etc.

• Rental Rules: Kings Grant’s HOA explicitly permits short-term rentals. There are no unit-age restrictions for renting, but guests must abide by HOA rules (no loud parties, guests ≤8, etc). Notably, only condo owners (not renters) may use motorized golf carts on site, and motorcycles/trailers are prohibited.

• Upcoming Regulations: North Myrtle Beach has approved stricter STR licensing effective 2025, including requiring a 24/7 local contact (on-site agent) and safety inspections. Owners planning to rent should be aware these city ordinances (expected Aug 2025 implementation) will add permitting requirements and enforcement. (Kings Grant’s current status is “rental allowed,” but these local rules will apply to all units.)

Financial Metrics: Cap Rate & ROI

• Sample Cap Rate: If a 3BR condo is acquired at $250K (recent sales around $250K) and yields net ~$50K/year STR income, the cap rate is ≈20%. Even conservatively, a 3BR at $250K with net $32K/year yields ~12.8% cap. A 2BR at $200K with ~$23K net yields ~11.5%. However, industry norm (per AirDNA/Mashvisor) suggests top-line cap ~9–10%, reflecting lower occupancy/ADR in practice and higher expenses. For example, assuming net ~$25K on a $250K unit gives ~10% cap, in line with Mashvisor’s ~10.1% Airbnb cap.

• Cash-on-Cash & ROI: Investors often see higher cash returns via STR: e.g. if $100K cash equity (40% down on $250K) yields ~$25K net annually, that’s 25% cash-on-cash return. By contrast, the same property rented LTR might yield ~$18K net, for ~18% COC. Case example: a 3BR bought $250K, rented short-term (50% occupancy, ADR ~$250) could gross ~$45K; after 30% expenses ($13.5K) net ≈$31.5K. This net on $250K is 12.6% cap (31.5/250). If 40% ($100K) down, COC ~31.5%.

Guest Reviews Summary

Guest feedback for Kings Grant stays is overwhelmingly positive. A recent 3BR VRBO listing in Kings Grant (1740 sq ft) has a 9.8/10 rating from 30 reviews. Sample guest comments highlight location and quality: “Close to everything… golf courses, food/drink and the beach. Communication with owners is easy and the condo has everything you need”. Another guest notes: “Property was clean, well maintained, close to the beach... Condo was spacious and comfortable. The owners were very responsive”. Across platforms (VRBO, Airbnb, Booking), Kings Grant units average ~9/10 ratings. For example, a self-contained unit (branded “Kings Grant Villas – family friendly”) shows an 8.9/10 “Excellent” score on Trivago (Booking.com aggregate). The common themes are praise for the convenient Ocean Drive location, upkeep and host responsiveness.

Renovation & Yield-Enhancement Tips

Investors can boost rental revenue through targeted upgrades. High-ROI improvements include:

• Fresh cosmetic updates: A new coat of paint, modern light fixtures, and new flooring can dramatically improve first impressions and photos.

• Maximize sleeping capacity: Converting unused space to an extra bedroom or adding a pull-out sofa increases the number of guests and nightly rates.

• Kitchen and bath upgrades: Modern stainless-steel appliances, stone countertops, and spa-like bathrooms justify higher rent and attract longer stays.

• Guest amenities: Luxury linens, high-speed Wi-Fi, and a functional workspace add appeal (especially for remote workers).

• Maintain systems: Ensure HVAC, plumbing and safety systems are up to date to avoid negative reviews and costly downtime.
  In short, cosmetic and functional enhancements that “make the home look like an appealing getaway” tend to pay off with higher occupancy and ADR.

Tax-Advantaged Strategies

• 1031 Exchange: Selling another investment property and doing a 1031 “like-kind” exchange into Kings Grant allows deferral of capital gains taxes. A 1031 exchange requires identifying a replacement property (here, a condo) within 45 days and closing within 180 days. The strategy preserves equity for compounding; for example, reinvesting a $300K sale into this condo avoids ~$45K in immediate taxes.

• Self-Directed IRA/401(k): Investors can purchase these condos within a self-directed retirement account (IRA or Solo 401(k)). This means rental income and appreciation grow tax-deferred (or tax-free for a Roth). In a self-directed IRA, all rental proceeds remain in the account to buy additional investments. As one advisor notes, many investors “utilize a self-directed IRA, self-directed Roth IRA, or other tax-advantaged account to invest in real estate”. (However, note IRS rules: no personal use of property owned by your IRA/401(k), and all expenses must be paid by the retirement account.)

Comparable Nearby Properties

Nearby NMB condo complexes provide context:

Beachwalk Villas (less than 1 mile south) is a larger 2nd-row resort with expansive oceanfront pools and recreation center, commanding higher ADRs. Tilghman (Oceanfront, ~2 miles north) adds tennis courts. By comparison, Kings Grant is a smaller, 3rd-row community with fewer amenities but lower HOA fees. All these buildings permit STRs; Kings Grant’s 57% occupancy is in line with area averages (Beachwalk/Tilghman likewise see 50–60% annual occupancy).

Conclusion

Kings Grant Villas offers a strong vacation-rental investment profile. With higher per-night revenue than long-term leasing, guests favor its location and condition (9+/10 ratings). In 2023–24 it likely achieved low–60% peak summer occupancy and mid–$300 ADR for 3BRs (a VRBO listing shows ~$367/night). Conservative underwriting (50–57% occupancy at ADR ~$250–$300) suggests $35K–$50K net income on a 3BR priced ~$250K – implying double-digit cap rates. These returns can be boosted by 1031 exchanges or retirement accounts for tax advantages. In summary, Kings Grant compares favorably with larger oceanfront resorts (like Beachwalk or Tilghman) and offers compelling yields for an investor’s STR portfolio – assuming the owner complies with NMB’s rental rules (HOA + city regulations) and invests in the recommended upgrades to maximize revenue.

Sources: Local market data and reviews (AirDNA, Zillow, VRBO guest comments); HOA and property details from listings; regulations summaries; rental income strategies. Tables use these cited data for estimates.

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.