Low Rental Income on a Myrtle Beach Condo? Find Out Why Before You Pass
When you're shopping for an investment condo along the Grand Strand, the first number most people look at is the rental income the property earned last year. That makes sense. It's real money, and it's right there on the owner statement.
But that number can be misleading on its own. A low rental history doesn't always mean a weak property. Sometimes the location, the building, and the unit are solid, and the real issue is how the property has been managed and marketed. Before you pass on a property because of its numbers, it's worth finding out why the numbers look the way they do.
Quick Answer
A property's current rental income shows how it performed under its current owner and management company. It doesn't tell you what the property is capable of. Before you pass on a low-earning Myrtle Beach condo, compare it with similar units in the same building, and look at how it's managed, how much the owner used it, and what shape it's in. If the gap comes from things you can fix, it may be worth a closer look. If it comes from things you can't change, like zoning or HOA rental rules, the low number may be telling you the truth.
I've been selling real estate since 2006, and I've also been an investor myself. For more than 17 years I owned a home improvement and contracting company that did new builds and fix and flips, so when I look at a rental property, I look at it the way an owner would: what's working, what isn't, and what it would take to fix it.
Why Is the Rental Income on This Myrtle Beach Condo So Low?
When a property's rental history looks weak, the cause usually falls into one of a few buckets. Some are fixable. Some aren't.
How it's managed and marketed. This covers how the unit is listed, the quality of the photos and description, how nightly rates change through the seasons, and how quickly guests get answers. Two management companies can handle the same type of unit very differently.
How much the owner used it. If the owner kept prime summer weeks for their own family trips, the rental history will show fewer booked nights. That says more about the owner's choices than the property's potential. Ask for the owner-use dates along with the income.
Condition and furnishings. Guests compare listings side by side. A unit with worn furniture and dated finishes competes against updated units in the same building, often at the same price point, and it can lose.
The unit itself. View, floor, size, and layout matter, and you can't change them. A street-side unit on a low floor won't perform like an oceanfront unit higher up, no matter who manages it.
The rules. Zoning and HOA rules decide whether and how a property can be rented short term. No management company can work around them.
How Do I Compare a Condo's Income to Others in the Same Building?
This is where a lot of investors skip a step. In my experience, there may be similar units in the same building earning double or even triple what the one you're looking at earns. When that's the case, you want to know why before you decide.
Here's how I'd approach it:
Get the history. Ask for recent owner statements from the management company that show gross rental income, management fees, other expenses, and owner-use dates. More than one year is better, since a single year can be unusual.
Find true comparables. Compare against units in the same building with the same number of bedrooms, a similar view, and a similar floor range. A two-bedroom oceanfront unit isn't a fair comparison for a one-bedroom street-side unit.
Look at the listings. Pull up how the comparable units are presented to guests. Photos, furnishings, reviews, and rates often tell you a lot about the gap.
Talk to more than one manager. Local management companies can tell you how they would market the unit and what they think it could produce. Ask how they came up with any projection, and treat it as an estimate, not a promise.
You can browse current investment condos and homes on the Grand Strand at our home search site while you compare.
Here's How This Can Play Out
Picture two condos in the same oceanfront building with the same floor plan. One has older furniture, a handful of phone photos online, and an owner who keeps most of July for personal use. The other was refreshed a few years ago, has professional photos, and is priced by a manager who adjusts rates through the season. Same building, same view, very different owner statements. An investor who only looked at the first unit's income might walk away from a location that clearly works.
This is only an example, not a typical result. Every property is different, and no one can promise what a unit will earn.
Is It the Management Company or the Property?
Once you know where the gap comes from, sort it into two lists.
Often fixable:
Marketing, photos, and the online listing
Pricing strategy through the seasons
Guest communication, cleaning, and maintenance response
Furnishings and cosmetic condition
Owner-use habits, which change when the owner changes
Not fixable, or not easily:
Zoning and whether short-term rentals are allowed
HOA rules on rentals
The unit's view, floor, and position in the building
HOA fees, insurance costs, and building-wide issues
This is where my contracting background helps. If a unit needs a refresh to compete, I can help you think through what that work involves so you can build it into your numbers before you make an offer, instead of finding out after closing.
What Should I Check Before Hiring a New Management Company?
If you're planning to switch managers after you buy, vet them carefully.
Check the license. Under South Carolina Code Section 40-57-20, it is unlawful to act as a real estate broker, associate, or property manager, or to advertise those services, without an active license from the South Carolina Real Estate Commission. Owners renting their own property are exempt under Section 40-57-240. You can look up a company or individual through the SC LLR licensee lookup.
Ask how they market and price. Where do they list the property, who takes the photos, and how often do they adjust rates?
Ask what their fee covers. Cleaning, linens, maintenance calls, and guest communication may or may not be included. Get it in writing.
Read the agreement. Know how long it runs and how to end it if it isn't working.
Check the HOA documents. Some associations have rules about rentals or management, so read those before you sign anything.
What Rules and Taxes Affect Short-Term Rental Income in Myrtle Beach?
Zoning. The City of Myrtle Beach defines short-term as any rental of less than 90 days. According to the City of Myrtle Beach, zoning districts that begin with "R" (residential) don't allow short-term rentals, with the exception of the RMV (Residential Multifamily Visitor) zone, and a business license is required to rent a property. Other Grand Strand towns and unincorporated Horry County have their own rules. I cover more of this in my guide to Myrtle Beach Airbnb and short-term rental rules.
Accommodations taxes. According to the South Carolina Department of Revenue, rentals of sleeping accommodations for less than 90 consecutive days are subject to the 5% state sales tax plus a 2% state accommodations tax, and local governments can charge up to an additional 3%. Ask any manager who handles collecting and filing these, and confirm the details with your CPA.
Ownership costs. HOA fees and insurance come out of the income before you see a dime. My posts on HOA fees in Myrtle Beach and hurricane insurance in Myrtle Beach walk through what to ask. If you're still deciding on property type, my comparison of condos and single-family homes as rentals is a good place to start.
Can a New Management Company Really Increase My Rental Income?
It can in some cases, especially when the gap comes from marketing, pricing, or guest experience. But no one can promise a specific result. Ask any company how they built their projection, compare it against similar units in the same building, and treat it as an estimate.
Do I Need a Licensed Property Manager for a Myrtle Beach Vacation Rental?
If you manage your own property, South Carolina law exempts you from real estate licensing for that property. If you pay someone else to manage it, SC Code Section 40-57-20 makes it unlawful to act as a property manager without an active license. You can confirm a license through the SC LLR licensee lookup.
Should I Walk Away From a Property With Low Rental Income?
Not automatically. Find out why the income is low first. If the reasons are fixable and the numbers still work after you budget for the fixes, it may be worth pursuing. If the reasons are zoning, HOA rules, or the unit itself, the low number is probably accurate.
Is Past Rental Income the Same as a Rental Projection?
No. Past income is what the property actually earned under its current setup. A projection is someone's estimate of what it could earn under a different setup. Both are useful, but only the past income is a fact, so weigh projections carefully.
Final Thoughts
Rental history is a starting point, not a verdict. The best investment on a street isn't always the one with the best numbers today. Sometimes it's the one in a great location that just hasn't been run well. The work is in figuring out which is which before you buy.
If you've found a property whose numbers don't seem to match its location, send it my way and I'll help you dig into why. I can also introduce you to management companies we work with, so you can hear their take before you decide. Book a quick Zoom call with me, or call or text me at (843) 385-6630.
The information in this article is for general educational purposes and is not legal, tax, or financial advice. Market conditions change, so please confirm details with the appropriate professional before making decisions. Beach Properties Group, Keller Williams Innovate South, 601 21st Ave N, Myrtle Beach, SC 29577, (843) 443-9400. Each office is independently owned and operated. Equal Housing Opportunity.
Brian Staub is a real estate agent in Myrtle Beach, South Carolina helping people buy with clarity and confidence.
Brian Staub Beach Properties Group Keller Williams 601 21st Ave N, Myrtle Beach, SC 29577 (843) 385-6630 [email protected] https://beachpropertiesgroup.com/
