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%