Investment Case Study: The Sailfish Resort (Myrtle Beach, SC – 2023/2024 Performance)

Overview of The Sailfish Resort (Breakers Resort Family)

The Sailfish Resort is an oceanfront high-rise condominium tower (built 1999) located at 2106 N Ocean Blvd in the heart of Myrtle Beach. It is part of the renowned Breakers Resort complex, granting owners and guests access to a wide array of amenities across multiple towers (including pools, hot tubs, a water playground, and even adjacent Marriott facilities). The building offers primarily one-bedroom and two-bedroom condos (some functioning like studios/efficiencies with open layouts), all with private balconies overlooking the ocean. Units come furnished and are condotel-style, meaning they operate both as individual condos and hotel rooms, fully permitted for short-term vacation rentals. The central location (near the Boardwalk, Convention Center, Broadway at the Beach, etc.) makes Sailfish especially attractive to tourists.

Amenities & Services: As part of Breakers, guests at Sailfish can enjoy indoor/outdoor pools, hot tubs, a lazy river, fitness center, on-site dining, and more. Importantly, owners who join the on-site rental program have “full access to ALL the Breakers amenities including the Marriott amenities”. This integration is a unique selling point, effectively giving a mid-priced condo access to upscale resort features. It can enhance rental appeal relative to stand-alone condos of similar age. However, the on-site management does charge substantial commissions (often 30–40% of gross rent) for these benefits, which investors must weigh against using independent management or DIY hosting.

Rental Income Performance by Unit Type (2023–2024)

Recent short-term rental data (post-pandemic travel boom) shows strong income generation at Sailfish, especially for upgraded units. While 2023 saw a slight market-wide softening from the 2021–2022 highs, Sailfish outperformed many peer resorts due to renovations and its amenities. Below is a breakdown of typical annual gross rental income by unit type, based on actual 2023/24 figures:

• Studio/Efficiency Units (~500 sq ft): These smaller one-room oceanfront suites (often with a kitchenette and Murphy bed) can gross on the order of $20,000–$30,000 per year in rental income. In late 2024, one such Sailfish unit (~550 sq ft 1BR) was reported at $37,123 gross for the year, though this was a fully renovated, high-performing example. Generally, low-$20Ks to upper-$20Ks is common for a well-marketed efficiency in this building. Peak summer weeks command high nightly rates (often over $200/night), while off-season months yield far lower monthly totals. Studios at comparable resorts like Camelot gross around $20–$22K, meaning Sailfish’s smaller units are on par or better, likely thanks to Breakers amenities. Recent sale prices for these units are roughly $170K–$200K, implying about 10%–15% of value in gross rent annually (a strong ratio).

• 1-Bedroom Condos (~550–600 sq ft): The majority of Sailfish units are one-bedroom, one-bath condos that sleep 4–6 (typically two beds plus a sleeper sofa). These are the workhorses of the rental program. Actual MLS rental data shows annual gross incomes in the $30,000 to $40,000+ range for 1BRs here. For example, a renovated 1BR corner unit grossed $38,928 from June 2023–May 2024 after upgrades, and another 1BR was on track for about $37,000 in 2024. Even average-condition 1BRs at Sailfish seem to reliably hit high-$20Ks to low-$30Ks per year in gross rental revenue. Notably, one listing highlighted that “while most resorts were down in 2023 vs 2022, [due to renovations] the Sailfish income numbers saw a big jump” – indicating upgraded units bucked the trend with superior performance. Overall, an investor can expect roughly $2,500–$3,000+ per month on average gross income for a 1BR, heavily concentrated in the summer season. This level of income is comparable to or even above some larger 2BR units in older resorts, underscoring the strong demand for updated 1BR oceanfront condos in prime locations.

• 2-Bedroom Condos (~846 sq ft): The two-bedroom, two-bath units at Sailfish accommodate larger groups (6-8 guests) and capture significantly higher peak rates. Recent data shows Sailfish 2BRs can gross in the $50,000–$65,000+ per year range. One 2BR unit (Unit 911) had about $65,231 in annual gross rental income documented – a standout example likely reflecting an excellent rental management strategy. Generally, mid/high-$40Ks is a reasonable conservative expectation for a well-rented 2BR, with top performers exceeding $60K in strong years. To compare, at Camelot (another central MB resort), 2BRs are projected around high-$30Ks to mid-$40Ks gross, and at the nearby Caribbean Resort (which has a waterpark), some 2BRs hit $70K+ in 2023. Sailfish’s 2BR income, therefore, is very competitive for its class – approaching the numbers of newer, amenity-rich resorts. Given recent 2BR sale prices around $350K–$380K (one sold at $380K in late 2023), the gross rent-to-price yield is roughly 13–17%. This indicates robust cash flow potential.

To summarize, Sailfish units in 2023–24 are grossing roughly 10–18% of their property value in annual rent – a key attraction for investors. The table below outlines typical figures:

Sources: Actual MLS-reported rental incomes for Sailfish units, listing data and market comps.

(Note: “Top” figures denote exceptional cases with upgrades and optimal management. Gross yields will fluctuate with market conditions.)

Net Operating Income and Cap Rate Projections

While gross income is impressive, investors must analyze net operating income (NOI) after expenses to determine cap rates. Key expenses for a condotel unit like Sailfish include: HOA dues, management fees, property taxes, insurance, and maintenance. Fortunately, many operating costs are bundled into the HOA. Sailfish’s HOA fee is approximately $943 per month for a 1BR condo (higher for 2BR, ~$1,345/mo). This includes most utilities and services – electricity (even inside the unit), water/sewer, trash, cable TV, internet, pest control, building insurance, common area maintenance, pools, etc.. Essentially, aside from property taxes and contents insurance, the HOA covers the bulk of recurring property expenses. This “all-inclusive” HOA simplifies budgeting, though the fee is on the high side. For context, a similar condo at Camelot by the Sea has ~$594/mo HOA (1BR) which excludes some interior utilities. Sailfish’s higher dues reflect its full utility coverage and the costs of being in a resort program (plus having fewer units to share costs than a mega-resort).

Management Options: Owners have a choice to join the on-site Breakers rental program or self-manage (or use a third-party manager). This choice dramatically impacts NOI: on-site management might take ~40%–50% of gross revenue (but provides full-service handling of guests, check-in, and amenity access), whereas self-management via Airbnb/VRBO or an off-site agency may cost ~10–20% of gross (Airbnb’s platform fees ~3%, plus cleaning and maybe a 10% management service if used). The trade-off is that off-site guests might have restricted amenity access; however, in many cases guests still use the pools, etc., or the HOA grants access regardless of rental program (this is worth verifying in Sailfish’s HOA bylaws). Most importantly, net income (NOI) can range from ~30% of gross (with on-site management) to ~50%+ of gross (with efficient self-management).

For a concrete projection, consider a Sailfish 1BR purchased at $210,000 grossing $35,000/year:

• On-Site Program Scenario: Gross $35,000. Deduct ~40% management ($14,000), HOA dues ~$11,300/yr, property tax ~$2,000, insurance + misc ~$1,000. Estimated NOI ≈ $6,700/year. Cap Rate ≈ 3.2%. (Many Breakers program participants accept a lower cap rate in exchange for hands-off income and access to all amenities.)

• Self-Managed Scenario: Gross $35,000. Deduct ~15% for platform fees, cleaners, etc. ($5,250), HOA $11,300, tax ~$2,000, insurance/maintenance ~$1,500. Estimated NOI ≈ $14,950/year. Cap Rate ≈ 7.1%. If the owner self-manages and also personally cleans/minimizes expenses, NOI could be even higher (~60% of gross), yielding cap rates in the ~8–9% range. On a 2BR grossing $60K bought for $360K, a similar approach could net ~$25–30K (cap ~7–8%). These are attractive cap rates for oceanfront real estate, especially considering appreciation upside and owner enjoyment.

In practice, reported cap rates for Myrtle Beach oceanfront condos tend to fall in the 5%–8% range for savvy investors, after all expenses. A local market analysis noted that even after the run-up in prices recently, units “still pencil out as strong income generators relative to purchase price”. In other words, the rental yields support the market values. Investors targeting higher cap rates often opt for self-management to reduce expense ratios. It’s important to keep conservative allowances for repairs, supplies, and occasional vacancies or slow months when calculating NOI.

Table: Estimated Annual Income vs Expenses (1BR Example)

Assumptions: On-site commission ~40%; self-manage costs ~15%; maintenance reserve higher when self-managing. Actual results vary.

As shown, management strategy heavily influences net returns. An investor can target cap rates near 7–8% by self-managing (or using low-cost managers), which is excellent for beachfront property. However, even the ~3–5% cap under full-service management may be acceptable for those prioritizing passive income (or who anticipate strong future appreciation). Each investor must decide the balance of work vs return. Notably, cash purchases yield the full NOI as profit, whereas financed deals need debt service subtracted – with 20-25% down, a typical mortgage could consume much of the cash flow, leaving a smaller annual profit. Many condotel buyers therefore use cash or 1031 exchange equity to maximize cash-on-cash return, treating the condo primarily as an income property with appreciation and tax benefits.

HOA Policies and Impact on Profitability

Understanding the HOA policies and fees at Sailfish is critical, as they affect both costs and rental operations:

• HOA Fee & Inclusions: The Sailfish Resort’s HOA fee is high but comprehensive. As noted, ~$943/month for 1BR units and ~$1,345 for 2BR. These dues cover virtually all utilities (even in-unit electricity and high-speed WiFi) and building insurance/maintenance. The HOA maintains the pools, elevators, landscaping, and common areas. This “all-in” structure means owners don’t pay separate electric or cable bills – the trade-off is a larger single fee. By comparison, some other resorts have lower HOA fees but require owners to pay unit electric or insurance separately. At Sailfish, aside from HOA and taxes, an owner mostly budgets for interior upkeep and any optional upgrades. The HOA’s master insurance does include hazard and liability on the building, but each owner should carry an HO-6 condo policy for interior contents and personal liability.

• Rental Management Flexibility: Importantly, the HOA does not mandate use of the on-site rental program. Owners are free to self-rent or hire outside property managers, which is a significant investor advantage. This is similar to other condo-resorts like Camelot, where the HOA allows independent rentals and does not impose restrictions on Airbnbs. Sailfish offers an on-site front desk through Breakers, but participation is voluntary. This flexibility lets investors optimize their strategy (maximizing profit by self-managing, or maximizing convenience via on-site). Owners who self-manage typically provide guests electronic lock codes and handle cleaning, while their guests still enjoy the resort amenities (in most cases). It’s wise for an owner to confirm with the HOA any amenity usage rules for guests of independent rentals – some resorts require amenity wristbands and try to restrict outside rentals, but generally in Myrtle Beach, HOAs lean investor-friendly on this point. There are no known special rental restrictions at Sailfish beyond standard city rules (Myrtle Beach allows short-term rentals in this zone with no issue).

• Policies & Rules: As part of a larger resort, the Sailfish HOA abides by Breakers Resort policies on guest behavior: no pets for renters, no smoking in units or balconies, reasonable occupancy limits, quiet hours, etc. (Owners may have some privileges like pet allowances with HOA approval, but renters do not). One notable perk: unlike many resorts that ban motorcycles, Breakers properties historically allowed motorcycle parking during rallies, etc. However, current HOA rules should be checked – Camelot’s HOA explicitly allows motorcycles for example, which attracts bike-week travelers; Sailfish/Breakers may have similar leniency given its downtown location. This can be a minor factor in off-season occupancy (e.g. Harley week). Overall, the HOA rules are standard and not burdensome for rental use.

• HOA Financial Health: The Sailfish is part of an established resort, so economies of scale help with management. The HOA is professionally managed (Ally Management, per MLS info). There have been no publicized special assessments recently; the 2023 renovations were mostly within units (owner-funded) and some common-area refreshes presumably funded from reserves. Investors should always review the latest HOA financial statements and meeting minutes. A healthy reserve fund is important for future projects (roof, exterior, etc.). Given the building’s age (~25 years), maintenance is ongoing – e.g. painting, concrete restoration, HVAC replacements in common areas. Recent HOA efforts in similar buildings have included updating décor and mechanical systems to keep the resort competitive. The Breakers group has an interest in maintaining a consistent quality across its towers, which bodes well for upkeep. HOA dues can increase over time with insurance costs and aging infrastructure, so pro forma budgets should allow an inflation factor.

In summary, Sailfish’s HOA, while costly, simplifies ownership and bundles most expenses. The lack of rental restrictions adds flexibility that many investor-landlords appreciate. When comparing to other buildings, one must compare total cost of ownership (Sailfish’s higher HOA vs others’ separate bills). Often, the net difference is not huge, but it can affect cash flow. It’s advisable to factor the full HOA fee into the cap rate calculations (as we did above) and recognize that this fee will be paid regardless of occupancy (thus, maintaining off-season carrying capacity is key – more on seasonality below).

Comparison with Nearby Resorts (Oceanfront & Ocean View)

How does Sailfish Resort stack up against similar Myrtle Beach condo-resorts in terms of investment potential? Below is a comparison of Sailfish with a few notable peers in the central/oceanfront market:

• Camelot by the Sea (2000 N Ocean Blvd, ~0.2 miles south): 18-story oceanfront resort (built 2001) with 231 units. Camelot offers extensive amenities (lazy river, multiple pools, attached parking garage, on-site Dunkin’ Donuts) and has a strong rental history as well. One-bedroom units at Camelot sell for ~$220K–$250K and gross $25K–$33K typically – slightly less on average than Sailfish’s highest 1BR figures, but similar in order of magnitude. Camelot’s HOA fees ($594/mo for 1BR) are lower than Sailfish’s, though Camelot owners must pay in-unit electric separately (so part of that difference is cosmetic). Both resorts allow outside management freely. Sailfish’s Advantages: part of Breakers network (guests can use adjacent Marriott/Breakers amenities, whereas Camelot is standalone) and potentially higher rental upside per 1BR (some Sailfish 1BRs hit ~$38K, higher than Camelot’s usual max around low-$30Ks). Camelot’s Advantages: larger scale amenities (big lazy river complex), a themed experience (“medieval” décor) that stands out in marketing, and slightly newer construction. Camelot also has some 3BR units (Sailfish does not), attracting larger groups. Both are prime downtown locations. Overall, Camelot and Sailfish are top-tier mid-scale oceanfront investments – Camelot might be considered a touch more family-oriented with its water features, while Sailfish leverages Breakers’ brand and perhaps achieves better ROI for similar unit sizes due to superior integration and recent upgrades.

• Anderson Ocean Club (2600 N Ocean Blvd, ~5 blocks north): A luxury oceanfront condo resort opened in 2007, Anderson targets a higher-end clientele with amenities like a full-service spa, valet parking, and upscale furnishings. Rental rates at Anderson are premium – e.g., a 2BR there can gross $80–90K in a good year, far above Sailfish’s typical 2BR. However, Anderson units cost roughly double Sailfish’s (often $600K+ for a 2BR) and come with very high HOA fees (because of multiple pools, lazy river, and even a miniature golf). Also, Anderson’s HOA/management is stricter: to access certain services, owners must use their in-house rental management (limiting independent rental flexibility). Sailfish’s Edge: a much lower entry price and more freedom to self-manage, which can actually result in higher cap rates. While Anderson boasts luxury and personal use appeal (ideal if an owner wants a high-end vacation condo for themselves), Sailfish delivers better cash-flow ROI for the price – more “bang for buck.” In short, Anderson might yield a similar cap rate (or even lower) when you factor its cost, despite higher gross rents. Investors focused purely on income yield often prefer buying two mid-level units (like Sailfish or Camelot) for the price of one Anderson unit.

• Caribbean Resort & Villas (3000 N Ocean Blvd, ~1 mile north): A popular family-oriented oceanfront resort (main tower 2005) known for its extensive water park (water slides, kiddie splash zones) and on-site restaurant. Caribbean has multiple buildings and hundreds of units, meaning lots of competition internally for rentals, but also major drawing power for families. Some units at Caribbean have documented $70K+ annual rentals in recent years – outperforming Sailfish, thanks to the water amenities and scale of the resort. Condo prices at Caribbean are moderately higher than Sailfish (maybe a 10–20% premium per square foot). Sailfish vs Caribbean: Sailfish is a smaller, quieter building; Caribbean is a large bustling resort. Sailfish’s integrated amenities (via Breakers) are good but Caribbean’s on-site water park is a huge draw that can justify higher summer rates. Caribbean’s parking is across the street for some towers, whereas Sailfish owners have convenient parking (Breakers garage nearby) and a less overwhelming footprint. Both allow outside rentals. If an investor’s top priority is maximizing rental income and they don’t mind a very busy resort atmosphere, Caribbean might edge out Sailfish. However, Sailfish holds its own as a solid performer and may have less saturated rental competition (fewer units to compete with in the same building). Additionally, some investors prefer the Breakers brand and its loyalty with repeat guests – Sailfish benefits from being part of a complex that travelers know (the Breakers has been hosting Myrtle Beach vacationers for decades). In contrast, Caribbean, while very successful, is one of many stand-alone resorts in the area.

• The Strand (Oceanfront Boutique, 2700 N Ocean Blvd): Formerly known as the Breakers Boutique tower, The Strand is a small oceanfront hotel/condo that was rebranded and upgraded under the Marriott umbrella a few years ago. It’s a hybrid – more of a hotel feel but with some condo ownership. It offers free breakfast and a quieter experience. The Strand is relevant as it was originally part of the Breakers family (like Sailfish) but now operates separately. Its rooms are generally not sold as individual condos anymore (it’s more of a hotel now), so it’s not an investment option. However, it’s worth noting that Breakers’ strategy to partner with Marriott (for The Strand and amenities sharing) elevates the overall profile of the Breakers/Sailfish complex. Guests perceive added value, and this can help Sailfish rentals. In essence, Sailfish gives a budget-conscious guest a Marriott-adjacent experience at a lower price, which is a marketing angle independent owners can exploit.

• Ocean View Comparisons: In the immediate vicinity, nearly all comparable buildings are direct oceanfront. Slightly off-ocean (second row) properties near downtown tend to be older motels or smaller condos that don’t achieve the rental rates Sailfish does. For example, a block inland might be an “ocean view” high-rise like Anderson’s Carolinian Beach Resort (which is actually oceanfront as well) or low-rise condos that permit STR. These usually see far less demand – oceanfront is king in Myrtle Beach for maximizing revenue. Therefore, Sailfish’s competition is primarily other oceanfront resorts. Among those, we’ve discussed the key ones. Another to mention is Bay View Resort (5th Ave N, opened 2007 on the Boardwalk): Bay View is newer and on the promenade, with 1BR units grossing $50–$60K, but it’s in a different part of town (closer to the Boardwalk action, further from the convention center). Bay View’s 1BRs cost more ($300K+). So again, Sailfish’s value proposition is a mid-priced buy-in with high rental efficiency. It may not have waterslides or new construction, but as an investment it “delivers better ROI for the price” when compared to many upscale options.

In conclusion, Sailfish stands out as an excellent mid-market oceanfront investment. It’s often considered alongside Camelot as one of the best choices for central Myrtle Beach condos under ~$250K, given its rental output. Higher-end resorts can earn more gross income but require much higher capital. At the same time, Sailfish (thanks to Breakers) edges out a lot of other older oceanfront motels/condos that don’t have access to such amenities. One investor summed it up: if you want upscale personal use, go for the luxury tower; if you want solid cash flow and a family-friendly vibe, Sailfish (Breakers) is hard to beat.

Guest Reviews & Occupancy Sentiment (Airbnb/VRBO/Booking)

A crucial part of an STR investment’s success is guest satisfaction – which drives repeat bookings and online ratings. The Sailfish Resort’s guest reviews in 2023–2024 reflect its resurgence after renovations:

• Airbnb: Individual Sailfish condo listings on Airbnb show excellent ratings. For example, one “Budget Friendly Oceanfront” 1BR listing in Sailfish holds a 5.0 out of 5 stars average (across 6 reviews). Guests consistently praise the unbeatable oceanfront location, proximity to attractions, and overall value for the price. Many note that while the building is older, the unit interiors (if updated by owners) are comfortable and clean, providing everything needed for a beach stay. The personal touches by attentive hosts (fast WiFi, keyless entry, stocked kitchens, etc.) also earn high marks. Superhost-managed units are capitalizing on the recent upgrades – essentially turning what was once an “okay” budget tower into a pleasantly surprising find for travelers.

• VRBO: On VRBO, Sailfish (Breakers) condos similarly garner strong feedback. A sample 1BR unit had a 9.6/10 rating (“Exceptional”) with guests raving “Great room, great location and a beautiful view!”. Another larger unit was rated ~8.8/10 (“Excellent”). These scores indicate that as long as expectations are managed (mid-range furnishings, not luxury), visitors are very happy with what Sailfish offers. They love having all Breakers amenities included, and often mention that the convenience of being walking distance to restaurants and the SkyWheel area is a huge plus. Any minor complaints usually relate to things like parking in the deck down the street or elevators being busy – typical resort issues.

• Booking.com / Expedia: Some units are rented via online travel agencies; for instance, an Expedia listing for “Oceanfront 2BR Suite – Sailfish 1111” had a 9.6/10 rating on VRBO and a 7.0/10 on Booking (the lower Booking score was from only 2 reviews, citing staff and comfort issues, likely anomalies). Generally, professional vacation rental managers list Sailfish units on these sites and have to compete with the Breakers hotel rooms. The independent listings attract guests by advertising larger space and full kitchens at a lower rate than booking directly through the hotel. Reviews there highlight “direct beachfront access,” “spacious living room,” and the same location perks. Some negative points included that a particular unit’s furnishings were dated or the AC was a bit noisy – hinting that not all units are renovated, so quality can vary.

• TripAdvisor: TripAdvisor’s hotel reviews of the Breakers Resort often reference the Sailfish Tower. Historically (2010s), Sailfish was considered the “older, budget tower” of the Breakers property. One 2018 review bluntly stated “Sailfish was ok, just outdated and not as nice as the others” – reflecting the sentiment before the recent upgrades. The Breakers overall still gets a high volume of reviews (as a large resort); as of early 2024, Breakers Resort (all towers) averaged around 4 stars on TripAdvisor, but the Sailfish-specific feedback within that is mixed. The good news: recent reviews specifically of Sailfish units note improvements. Travelers in 2023 commented that their Sailfish condo was “very nice, great location” and that being “in the heart of Myrtle Beach with so many things to do” outweighed any dated aspects. In essence, the location and view are unbeatable, and if the room is clean and updated, guests are satisfied.

• Common Themes: Across platforms, location is the universal five-star feature – guests love being oceanfront and walking distance to downtown attractions. Value for money is also frequently praised; many reviewers say they would return, feeling they got a great deal on an oceanfront condo with lots of amenities. Areas of critique tend to be related to the building’s age: e.g., occasional mention of older decor in common areas, slow elevators when the resort is full, or the fact that this is not a “luxury hotel.” However, those complaints have diminished as units have been refurbished. One can see that renovated units with modern decor and comfy beds get virtually no complaints, whereas units that haven’t been updated might get 4-star reviews with notes like “could use a refresh, but it was clean.” For investors, this underlines the importance of keeping the unit updated (see next section on renovations). Another note: off-season guests sometimes comment about amenities being closed or limited (e.g., outdoor pool bar closed in winter) – this is typical in Myrtle Beach and not unique to Sailfish.

In summary, guest sentiment for Sailfish is largely positive and improving. The combination of Breakers amenities and a well-furnished condo leads to happy guests and strong reviews on Airbnb/VRBO (crucial for driving bookings). As one reviewer put it: “Fantastic rental! Exceeded expectations!”. This bodes well for investors aiming to maintain high occupancy and justify premium nightly rates. The key is ensuring the unit itself meets or exceeds expectations through good maintenance and hospitality. With that in place, Sailfish units can achieve both high revenue and high guest satisfaction.

Renovation ROI and Resale Value Uplift

One of the most striking aspects of The Sailfish Resort’s recent performance is the return on investment from unit renovations. Many units in the Sailfish tower were dated (stuck in early-2000s decor) until owners began updating them in the last few years. In 2023, a number of condos underwent remodels – and the data shows immediate benefits in rental income and resale prices:

• Income Jump Post-Renovation: A prime example, Unit 1110 (a corner 1BR), was “renovated top to bottom… in 2023” with an opened-up kitchen, new lighting, barn door, etc.. Thanks in part to these upgrades, its rental income surged. The listing noted “while most resorts were down in 2023 vs ’22, due to the renovations the Sailfish income numbers saw a big jump”. Indeed, that unit grossed nearly $39K in the following 12-month period, which is well above what similar units had been earning pre-renovation (many were mid-$20Ks gross). We can infer at least a 20–30% boost in revenue attributable to a modernized, more appealing interior. Renters browsing listings see updated photos and are willing to pay a bit more (and leave better reviews). In a competitive rental market, an attractive unit stands out – leading to higher occupancy and higher nightly rates. This is a direct, quantifiable ROI: for perhaps $10–$15K in renovation expense, the owner is now earning maybe $8–$12K more in annual rent versus an unrenovated peer. That’s a potential 50–100% annual return on the rehab cost through increased income alone, not to mention the higher resale value.

• Resale Premiums: Renovated units are commanding significantly higher sale prices and selling faster. Unit 1110 (with the upgrades and stellar rental record) sold in late 2024 for $203,000, which was above the typical $170K–$180K range that original-condition 1BRs were trading for a year prior. Another renovated 1BR (Unit 410, also a corner) was listed at $209,900 in 2025 and went under contract in under 90 days – a strong indicator of buyer demand. Meanwhile, units that haven’t seen updates sometimes linger or sell at discounts. Buyers (often investors) heavily weigh rental potential, and seeing a recent $38K gross on a unit like 1110 justifies paying a premium. In essence, every dollar spent on updating has been coming back as multiple dollars in sale price. Even 2BRs show this: the 2BR that hit $65K gross likely benefitted from updates and fetched $380K, whereas a more dated 2BR might only fetch ~$300K-$320K. Renovations that particularly pay off include: modern LVP flooring, granite or solid-surface countertops, updated bathroom fixtures, fresh coastal décor, and high-quality beds and furnishings. These not only improve rental appeal but ensure the property shows well during resale. With many out-of-town buyers, a “turn-key” updated unit with proven income is like gold – they can plug into the cash flow immediately, no need for downtime to rehab.

• Guest Experience & Reviews: The ROI on renovations isn’t just financial; it’s reflected in guest satisfaction. Upgraded units at Sailfish consistently get 5-star reviews (as noted earlier). This creates a virtuous cycle: good reviews = more bookings (and often at higher rates). Conversely, an outdated unit might get some lukewarm feedback that can hurt future bookings. By renovating, owners protect their revenue stream and make their investment more resilient. It also reduces maintenance calls – new A/C, plumbing, appliances, etc., mean fewer emergency fixes.

• Competitive Positioning: Within the Breakers complex, Sailfish used to be the weakest link. Now, renovated Sailfish units can compete with or even outshine some rooms in the newer towers. A traveler might actually prefer a modern condo in Sailfish (with a full kitchen and separate bedroom) over a smaller hotel-style room in, say, the Palms tower – especially if the decor is similar. This internal competition angle means renovations help capture bookings that might have gone to other Breakers towers or other resorts.

• Long-Term Value: Real estate appreciation tends to favor properties in good condition. A renovated condo will appreciate from a higher baseline. Moreover, the deferred maintenance is essentially reset – new HVAC, new water heater, etc., push out the timeline of future capital expenditures. The Myrtle Beach oceanfront condo market saw substantial appreciation from 2020–2022, and while it has leveled, quality units are holding value better. For instance, Camelot 1BRs that sold around $120K in 2018 hit $220K+ by 2022. Sailfish units similarly roughly doubled from mid-2010s to mid-2020s. Renovations amplify that: an untouched unit that sold for $125K in 2021 might sell for maybe $180K in 2024, whereas a renovated one sold for $203K (as we saw). So the delta is clear.

Bottom line: Investors in Sailfish should strongly consider budgeting for updates if the unit isn’t already remodeled. The return on renovation is evidenced by both higher rents and higher sale prices in this resort. As the listing agents often advertise, an updated condo in Sailfish is a “fantastic rental property” with “everything you need to maximize your beachside returns”. From a strategic perspective, doing a renovation soon after purchase can essentially “force appreciate” the property and boost cash flow, accelerating the overall investment payoff. In a few years, the Myrtle Beach market may expect all units to meet a certain standard; getting ahead of that curve secures a competitive advantage in the rental market now.

1031 Exchange Strategies and Retirement Account Investing

Investors often not only look at the immediate income, but also how an asset like Sailfish fits into their tax strategy and long-term portfolio (e.g. retirement planning). Luckily, oceanfront condos can be very useful tools in this regard:

• 1031 Exchange into (or out of) a Sailfish Condo: U.S. tax law allows deferral of capital gains through a Section 1031 like-kind exchange when swapping one investment property for another. Vacation rental condos do qualify as investment property (as long as they are rented out and not used solely as a second home). This means an investor can sell another property – say a duplex or another condo – and roll the proceeds into a Sailfish unit, deferring any capital gains tax. Many buyers in Myrtle Beach use 1031 exchanges, especially if they are coming from higher-priced markets. For example, someone might sell a rental in the Northeast for $400K, then buy a $350K Sailfish 2BR and a $50K piece of land, deferring tax on the entire transaction. Strategies: One popular strategy is to use a 1031 exchange to acquire a vacation rental that the investor eventually wants to retire to. The IRS safe harbor guidelines (Rev. Proc. 2008-16) suggest that if you rent the condo out for at least 14 days a year for the first two years after purchase and keep personal use under 14 days in those years, it solidly qualifies as an investment. After a period of time, you can even convert the condo to your primary residence (with some tax considerations beyond scope). In essence, you could buy your future retirement condo now, enjoy rental income for, say, 5–6 years, then move in – all while deferring gains from your previous property. This could be attractive for someone eyeing Myrtle Beach as a retirement locale. If done correctly, after meeting the rental use requirements, the owner could later sell that unit as a primary residence and potentially take advantage of the Section 121 exclusion (tax-free gain up to $250K/$500K) after owning for >5 years and living in it >2 years. It’s a longer game plan, but very tax-efficient: it transforms a taxable sale into a largely tax-free sale years later, plus you got rental income in between.

  From an exchange standpoint, Sailfish units are often downleg targets – meaning people sell larger properties and buy these. But an investor could also eventually 1031 out of the condo if they decide to diversify or upgrade. For instance, after some appreciation, one could exchange the Sailfish unit for a larger beach house or multiple condos elsewhere, again deferring taxes. The key is to maintain it as a rental (an “investment intent”). Using a reputable Qualified Intermediary and adhering to the 45-day identification and 180-day closing rules is crucial. Myrtle Beach’s popularity makes it easy to argue investment intent (it’s clearly not a purely personal second home if it’s generating substantial rental income). The IRS has allowed vacation rentals in 1031s as long as the owner did limit their personal use and treated it as a business asset.

• Using Retirement Accounts (401k/SDIRA) to Purchase: Another avenue is using a Self-Directed IRA (SDIRA) or Solo 401(k) to invest in a condo. Self-directed retirement accounts allow alternative assets like real estate, giving investors tax-deferred (or tax-free, in a Roth) growth on rental income and appreciation. For example, an investor with $250K in a rollover IRA could form an SDIRA LLC and purchase a Sailfish condo under that IRA. All rental income would go back into the IRA, growing without current taxes, and any sale proceeds would likewise stay in the IRA. This can be a powerful way to diversify retirement holdings beyond stocks. However, there are strict rules: The IRS prohibits personal use of a property owned by your IRA – you (and your close family) cannot vacation in the condo at all, or it jeopardizes the IRA’s tax status. It must be purely for investment. Also, any expenses must be paid from the IRA, and all income goes into the IRA (no pocketing rental money personally). Financing is tricky but possible: an IRA can only take a non-recourse loan, which typically requires ~50% down. Many IRA buyers just pay cash via the IRA. A Solo 401k (for self-employed individuals) has similar capabilities with possibly higher contribution limits and no custodian fees. The advantages of buying via retirement funds are: tax-sheltered rental income (building wealth for retirement), and avoiding needing a mortgage in one’s personal name. Essentially, you’re using pre-tax (or Roth) dollars to invest. The disadvantages: you lose the personal enjoyment of the condo (until maybe you distribute it to yourself years later, which would then trigger taxes if pre-tax IRA). Also, you can’t easily deduct depreciation in your current taxes (the IRA doesn’t get to use depreciation like a person would, though the income is tax-deferred anyway). Despite these, it’s entirely feasible – many have used SDIRAs to buy rental condos. The appeal of a Myrtle Beach condo in an IRA is that it’s hands-off enough (with a manager) to not require prohibited transactions (you can’t, for example, manage it yourself too actively or pay yourself). Hiring a property manager to do everything is allowed, since that’s a third party. All expenses (HOA, etc.) must be paid from the IRA’s cash balance. So an IRA investor would need to leave maybe a year’s worth of HOA and expenses liquid in the account as reserve.

• Leveraging Retirement Savings: The case for using retirement funds might be strongest for someone who has substantial IRA/401k assets but limited cash for a down payment. Rather than withdrawing (and paying penalties/tax), they can direct those retirement funds into an investment property. Over time, the rental income and appreciation accrue tax-free. For instance, if the IRA buys a $200K 1BR and in 10 years it’s worth $300K and the IRA collected $200K in rents over that time, all that could potentially be withdrawn slowly in retirement at a lower tax bracket (if traditional) or tax-free (if it was Roth to begin with). It’s a long-term play.

• Exit Strategy via Retirement: We mentioned converting a 1031 exchange property into a primary residence for retirement. Another strategy is using current retirement account money to generate future retirement rental income. Some people plan to eventually take the condo out of the IRA when they retire (a distribution of property in-kind). This would involve a taxable event (property value counted as distribution), but then you’d personally own the condo and could live in it or continue renting. There are sophisticated methods to minimize the tax hit (like doing it in a year with large medical deductions or spreading via partial distributions). The bottom line is that owning a condo through a retirement plan provides flexibility – you can either sell it within the plan and just take cash distributions, or take the property as a distribution.

Important Considerations: If going the SDIRA/401k route, consult with a CPA or attorney experienced in these. There are prohibited transaction pitfalls (you can’t even rent the unit to your family, or do sweat equity yourself). Also, UBIT (Unrelated Business Income Tax) may apply to leveraged income – e.g., if your IRA got a mortgage, the portion of income attributable to borrowed funds can be taxable within the IRA. Many SDIRA investors just avoid loans to sidestep UBIT.

In summary, Sailfish condos are attractive candidates for 1031 exchanges – allowing savvy investors to defer taxes and possibly position a future retirement home. They can also be bought through retirement accounts, offering a path to diversify one’s 401k/IRA into tangible real estate. Both strategies highlight the condo’s dual nature as an investment and a lifestyle asset. Whether you’re rolling over gains or nest-egg funds, the key is that the property must be treated as an investment first (rent it, limit personal use) to reap the tax benefits. For those who navigate the rules properly, the reward is significant: either tax-free compounding (in an IRA) or tax-deferred swapping (via 1031) of a high-income asset like Sailfish, all while enjoying the pride of owning a slice of beachfront real estate.

Seasonality, Nightly Rates and Risk Factors

Myrtle Beach is a highly seasonal market, which directly impacts Sailfish Resort occupancy rates and nightly pricing throughout the year. Additionally, as with any coastal investment, there are risk factors to consider. Below we analyze the seasonal dynamics and potential risks:

• Occupancy Seasonality: The bulk of rental income is earned in late spring and summer. In fact, along the South Carolina coast, about 55% of annual vacation rental revenue is generated in June, July, and August. Myrtle Beach’s peak season sees very strong demand: one owner noted “most of your money is made from May through September,” with occupancy rates pushing 85%+ in peak summer months. During June–August, Sailfish units often run near full occupancy (especially weekends), with back-to-back turnovers. Shoulder seasons (April/May and September/October) are also active, thanks to festivals, spring break, and fall golf trips – occupancy might be a healthy 50–70% then. Winter (Nov–Feb) is the slow period: monthly occupancy can drop to 10–20% in the coldest months for vacation rentals. Many owners secure monthly snowbird tenants in Jan/Feb at discounted rates to cover HOA costs. Sailfish’s indoor pool and central location do attract some off-season guests (holiday travelers, convention attendees, etc.), but the reality is that from November through February, nightly bookings are sparse. Savvy investors budget zero or negative cash flow in winter, made up by large surpluses in summer. One report advises: keep a reserve of a few months’ HOA payments to get through the off-season – a sound practice. On the flip side, during summer, occupancy is often 90–100% if priced right, so one must be prepared for rapid turnovers and higher variable costs then (cleaning, wear-and-tear). The seasonal swing in occupancy is both an opportunity (you can use the condo yourself in winter with little “cost” in missed rent) and a risk (you must carry it through lean months).

• Nightly Rate Fluctuations: Hand in hand with occupancy, ADR (average daily rate) fluctuates dramatically by season. At Sailfish, a 1BR unit might command $200–$250+ per night in July (even higher for July 4th week), whereas in winter it might fetch only $60–$80/night, if anything. For example, one rental manager advertises a Sailfish 1BR at $79/night in winter up to $279/night in peak summer – an enormous range. Summer weekends can even see rates pushing $300/night for 2BR units. The highest rates are typically mid-June through early August, and again around holiday weekends (e.g. Memorial Day, Labor Day ~$180–$220/night for 1BR). During Spring Break and April weekends, 1BRs might go for $120–$150/night. Monthly off-season rentals (to snowbirds) might be ~$900–$1,200/month, which on a per-night basis is very low but these long stays ensure occupancy. As an investor, setting the right rates is crucial. Many use dynamic pricing tools or adjust frequently – drop rates in slow periods to capture limited demand (since an empty condo in January yields $0). Also, booking windows differ: summer weeks get booked far in advance at high rates, whereas winter bookings are often last-minute. In 2023, a trend of shorter booking windows was observed; guests waited until within 30 days to book, hoping for deals, which meant occupancy “on the books” early was lower and then filled last-minute. Conclusion on rates: Investors should be prepared for volatility – you may achieve $3,000+ for a prime July week on a 2BR, but then have a whole month in winter net the same $3,000 in total. It averages out, and we use those averages in projections, but cash flow management is key.

• Market Trends & Competition: A risk factor emerging in 2023–2024 is market oversupply of rentals relative to demand. After the pandemic travel surge, many investors bought condos or homes to rent, increasing supply. Data from mid-2023 showed Myrtle Beach had a 9% increase in listed rental properties year-over-year, while guest reservations were down 22% vs the prior year. This caused occupancy and RevPAR declines in 2023 compared to 2022. For example, by spring 2023, only ~39% of summer nights were booked vs 58% at the same point the year before. The result was that many owners had to cut rates or accept last-minute bookings to fill units. Sailfish Impact: being part of Breakers, the on-site program likely employs aggressive marketing and dynamic pricing to stay competitive. Independent owners also had to adjust. While Sailfish saw a renovation-driven boost, one cannot ignore macro trends: if the destination overall sees fewer bookings or more competition (new resorts, etc.), even a great unit might experience slightly lower occupancy or rates than expected. The 2023 softness appears to be a normalization after two record years, plus inflation pressuring travel budgets. For 2024–2025, a more modest growth in supply is expected, which should help stabilize occupancy. Still, investors should keep an eye on new developments (though in Myrtle’s downtown area, new oceanfront construction is limited – most new builds are further south or north). Competitive pricing and maintaining a high-quality offering (so that your unit is chosen first) mitigate this risk. In short, being average in a crowded field is risky; being a top-reviewed, well-marketed unit is the best defense.

• Weather and Natural Disaster Risk: Being on the coast, hurricanes and tropical storms are an ever-present risk. Myrtle Beach generally sees glancing blows (compared to Florida or the Gulf), but it’s not immune. A direct hit could cause property damage, temporarily depress tourism, or spike insurance costs. Owners should ensure the HOA’s master insurance is robust (and it is included in HOA fees) and carry loss-of-income insurance if possible. In recent memory, hurricanes like Florence (2018) and Ian (2022) impacted Myrtle Beach moderately – causing some flooding and a few weeks of disruption, but the area was quick to recover. Still, a severe storm could shut down rentals for a part of the prime season, which would hit revenue. This is largely unpreventable, but having reserves and the proper insurance (including special assessments coverage, etc.) is wise. Additionally, climate change trends could affect insurance and HOA costs long-term. So far, MB hasn’t seen the huge insurance spikes that some Florida condos have, but it’s something to monitor.

• Economic Cycles: Tourism is a discretionary spend. In a recession or gas price spike, Myrtle Beach might see fewer visitors or more discount-hunters. Historically, MB has been somewhat recession-resilient relative to other destinations because it’s a budget-friendly beach (when people can’t afford Hawaii or Disney, they still might drive to Myrtle). For instance, during the 2008–2009 recession, occupancy dipped but then Myrtle Beach tourism rebounded quickly, and during COVID recovery it boomed as people took regional trips. Nonetheless, an economic downturn is a risk to rental income – we factor this in by not over-leveraging and by maintaining a good value proposition (Sailfish can actually benefit if travelers “downgrade” from expensive resorts to more affordable ones – trade-down demand).

• HOA and Regulatory Changes: Internally, an HOA could impose special assessments (say for a major renovation of common areas). While none are known currently, an investor should be prepared for occasional one-time fees. Also, city regulations could change – though Myrtle Beach has been very welcoming to STRs in the core tourist zones. No bans or onerous restrictions are on the horizon for this area. If anything, regulations are a larger concern in residential neighborhoods, not in resort districts. Still, it’s worth keeping abreast of any changes in property tax rates, tourism fees, etc., that could affect the bottom line.

• Liquidity and Financing Risk: Condotels like Sailfish can be harder to finance (since many banks consider them “hotel” properties). Typically, buyers need 20–30% down and may pay a higher interest rate. This can limit your buyer pool on resale (mostly cash buyers or investors with strong financing connections). If interest rates rise, the demand from leveraged buyers might fall, potentially softening prices. As an investor, one risk is if you plan to refinance or pull out equity – the lending market could tighten for such properties. It’s advisable to not over-leverage; many treat these as cash purchases or use a HELOC on another property to avoid dealing with condotel loans.

• Operational Risks: Managing a short-term rental remotely (if you’re not local) has inherent challenges: cleaners or contractors could be unreliable, guest damage can occur, etc. These micro-risks are mitigated by building a good team (cleaner, handyman, perhaps a local co-host). Using the on-site management reduces these risks but at a cost to NOI. Also, technology and listing platforms come with risk – an Airbnb algorithm change or a shift in travel behavior (e.g., more people booking via new platforms) could affect how you get bookings. Staying informed and adaptive is part of the STR business.

Despite these risks, the overall outlook remains positive. Myrtle Beach tourism is stable to growing, and the city continues to invest in infrastructure and attractions (new restaurants, entertainment, airport expansion). Downtown is experiencing renewal – a new Publix grocery and arts center opened nearby, making the area more livable and attractive. Such developments will only enhance the appeal of owning/renting at places like Sailfish.

Risk Mitigation Tips for Sailfish Investors:

• Maintain adequate cash reserves (6–12 months of expenses) to weather off-season and any emergencies.

• Use dynamic pricing and monitor market data (occupancy pacing, etc.) to adjust rates quickly in response to demand shifts. Last-minute discounts can salvage revenue if bookings are slow.

• Keep your unit in top shape to outperform competitors – aim for Superhost status or high rankings on search results due to great reviews.

• Ensure proper insurance coverage (including loss of income). The HOA covers the big stuff, but your HO-6 policy should cover interior damage and liability.

• Network with other owners or hire a local property manager to have boots on the ground. This reduces operational hiccups and improves guest experience (quick issue resolution).

• Think long-term: Even if one season underperforms, Myrtle Beach real estate historically appreciates and the good seasons usually outweigh the bad. For example, after the brief tourism drop in 2020, 2021 shattered records – those who held on reaped the rewards. Prepare for ups and downs, but zoom out: a well-bought oceanfront condo tends to be a solid asset over a horizon of 5+ years.

Conclusion

The Sailfish Resort offers a compelling case study in 2023–2024 as a high-yield oceanfront investment. Its combination of mid-level purchase price, strong gross rental income across unit types, and the flexibility to self-manage or use on-site services provides multiple paths for investors to achieve their goals. Financially, Sailfish condos demonstrate cap rates that can reach the high single-digits with optimized management – a remarkable feat for beachfront property. When benchmarked against similar resorts, Sailfish (as part of the Breakers family) holds its own or excels, especially after recent renovations that have elevated its profile among guests.

The data and analysis presented show that a 1BR Sailfish condo grossing ~$35K can net $15K+ and yield ~7%+ cap rate with savvy management, and a 2BR can surpass $60K gross, offering scale for those who invest more. Compared to alternate investments, these returns, combined with personal use possibilities and tax advantages like depreciation, make for a very attractive investment proposition.

However, success with this asset is not automatic – it hinges on active and informed ownership: keeping the unit updated, monitoring market trends, and delivering great guest experiences. The Sailfish Resort has proven that even an older building can reinvent itself through upgrades and smart strategy, turning into a revenue “sailfish” (marlin) in a sea of vacation rentals. Investors can further leverage this asset through 1031 exchanges (to defer taxes and perhaps eventually retire in their condo) and even include it in retirement accounts for long-term, tax-advantaged growth.

In closing, The Sailfish Resort exemplifies a balanced investment: it’s part of a stable, well-located resort with a track record, yet it still has an upside (through renovations and hands-on management) that an investor can capitalize on. Occupancy and ADR will ebb and flow with the tides of tourism, but the fundamental demand for affordably priced oceanfront vacations in Myrtle Beach endures – and Sailfish is positioned to capture that demand. With prudent management, an eye on the market, and strategic use of financial tools, an investor in Sailfish can enjoy not only sunny beach vacations but also a sunny outlook on their investment returns for years to come.

Sources: Real-time MLS data on Sailfish sales and rentals; Oceanfront Commercial Group market reports; Guest review analysis from Airbnb/VRBO and TripAdvisor; HOA details from property listings; Key Data and industry reports on Myrtle Beach STR trends; Vacasa 1031 Exchange guidelines; Coach Carson SDIRA rules. (All data is specific to the Myrtle Beach market 2023–2024 for relevance.)

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.