SC has the best place in the US to buy and rent out a beach house, new ranking shows. Here’s why
Pawleys Island is the best city in the United States to buy a beach house to use as a short-term rental property, according to real estate website Realtor.com and vacation rental analytics company AirDNA.
The Grand Strand is a popular destination for beachfront fun and the rise of short-term vacation rentals like Airbnb and VRBO means homeowners have entered the hospitality market traditionally dominated by hotels, motels and bed and breakfasts. But where is the short-term rental market most lucrative?
The report analyzed median home prices, average annual rental revenue, expected yields and regulations on short-term rental properties to rank the best cities in the United States to buy a beach house to use as a short-term rental property.
To calculate expected yield from rental properties, the report divided potential revenue by median home value. But even if an area has a high yield, strict short-term rental regulations can make renting out a beach house difficult.
Pawleys Island hosts scores of vacationers in the summer and snowbirds in the winter, making it an obvious choice for anyone looking to rent out property in a beach town. While Pawleys Island took the top spot, the report recommends keeping an eye on local short-term rental regulations if you’re looking to buy a house.
While the original ranking has a warning about buying house in Pawleys Island because of a proposed amendment to the Georgetown City Council zoning ordinance that would require property owners offering short-term rentals to get a business license and a special permit, the town isn’t under the city’s jurisdiction. Instead, the town of Pawleys Island is only apart of Georgetown County and therefore would be unaffected if the amendment is passed.
Other highly ranked cities are on the East Coast, West Coast, Gulf Coast and even in the Midwest.
The top 10 places to buy a beach house to rent out are:
1. Pawleys Island, South Carolina
Median home price: $497,237
Annual revenue potential: $41,995
Expected yield: 19.8%
2. Michigan East Coast, Michigan
Median home price: $208,513
Annual revenue potential: $20,265
Expected yield: 16.7%
3. Cape San Blas, Florida
Median home price: $798,807
Annual revenue potential: $64,264
Expected yield: 12.8%
4. Gulfport Biloxi, Mississippi
Median home price: $303,930
Annual revenue potential: $23,646
Expected yield: 12.4%
5. Wilmington, Delaware
Median home price: $614,856
Annual revenue potential: $35,361
Expected yield: 11.2%
6. Lincoln City/Newport, Oregon
Median home price: $597,379
Annual revenue potential: $43,241
Expected yield: 11.10%
7. Greys Harbor, Washington
Median home price: $421,627
Annual revenue potential: $29,331
Expected yield: 11%
8. Outer Banks, North Carolina
Median home price: $705,939
Annual revenue potential: $34,237
Expected yield: 10.5%
9. Corpus Christi, Texas
Median home price: $541,169
Annual revenue potential: $27,154
Expected yield: 10.4%
10. Gulf Shores, Alabama
Median home price: $615,535
Annual revenue potential: $112,281
Expected yield: 10.3%