InvestmentFolly Beach SC: Long Term vs Short Term Rental Investment Market

There is a lot of press these days in Charleston SC regarding property investors, from those that are behind mega development projects to the second home buyer looking to capitalize on Charleston’s lucrative short-term rental market. Savvy investors are much more than those individuals that simply purchase a second home from afar and have it managed by a local property management firm, overseeing their check-ins and housekeeping needs. Investors are those that take a hard look at the returns on a property, cost of maintenance and finance, revenue projections and market trends. When purchasing an investment property it’s vital to understand that it will be a brick and mortar investment within your overall investment portfolio. If you’re beginning to think of becoming an investor in the Folly Beach market, there are a few things to consider. Let’s dive into whether investing into a short-term rental or long-term rental is the ideal investment for you. 

Let’s begin with the term, short-term rentals, which are typically condos, villas, or single-family homes that are furnished and rented for a short period of time. Think “days or up to a week ” as opposed to long-term rentals which can span many months or even years rented by the same tenants. What makes a profitable short term rental at the beach? Proximity to the beach, or easy beach access are the leading factors that will influence the rental rates, as well as number of bedrooms + bathrooms and the total number of occupants the home can comfortably host. For a beach rental, the sweet spot for achieving optimal “occupancy nights ” is generally having 4-5 bedrooms and 4-5 bathrooms. In general, this allows for large groups, extended family or several couples to vacation comfortably together.  Our experience has shown that on Folly Beach, if the property includes a pool, you have an even greater opportunity to maximize both rental and occupancy rates.

Long-term rentals are typically considered a ‘safer’ investment opportunity. Long-term tenants often take pride in their home and generally look after them to a greater degree, relieving investors of the potential headache of grounds and general home maintenance. Returns can be modest but the cost of larger maintenance items can further reduce your potential income. While short term rental income may yield higher returns, the overall wear and tear on the property can be significantly increased. Your biggest benefit of utilizing a long-term rental is the increasing value of your home over time, and your renter consistently paying down the mortgage on your behalf. 

On Folly Beach, short-term rentals are appealing because you can rent your home to a continuously rotating group of guests throughout the year but particularly capitalizing on the beach vacationers during the summer months, thus delivering cash flow on your investment. With its prime location just two blocks from the beach and four blocks from Center Street, 420 E Cooper Avenue offers an excellent short-term rental opportunity on Folly Beach. With five bedrooms, including a bunk room that could sleep up to four, You can easily accommodate larger groups of guests (up to 12). This luxurious home with lush gardens and expansive porches for outdoor entertaining, offers everything vacationers look for a once-in-a-lifetime vacation experience. This stunning property delivers perfectly on the “location + rooms ” scenario for optimum rental performance.  

Additionally the investment appeal of the home at 420 E. Cooper is the steps that were taken during construction that make for lower-than-average carrying costs, including its location on high ground that means it qualifies for minimal flood insurance. A savvy investor will appreciate that this home was built to meet/exceed all coastal building codes with construction details designed to minimize damage in a hurricane including 140 mph wind resistant hurricane roof, and Anderson 400 hurricane windows and doors throughout the home.

After the busy summer months, 420 E Cooper Avenue, will entice those ‘snow birds’ looking to fly away from colder areas like New York, Connecticut, Ohio, or Pennsylvania, and ‘nest’ at Folly Beach for a few months (typically 3-6 months). 

NOTE: There are plenty of great reasons to own a vacation home on Folly Beach. Our Luxury Simplified Retreats team manages a array of vacation homes for investors throughout Charleston, Folly Beach and Palmetto Bluff. Whether you are looking for a place to call your forever home, enjoy a vacation home at the beach, or have a 5 BR/4 BA investment property that generates cash flow, 420 E. Cooper Avenue has it all! BROWSE the online e-book and see all that this home has to offer.