Beginner Investing in Charleston

[Frank Piccioni]

Good morning

My name is Frank and I am new to the bigger pockets community and to real estate.  I live in Charleston SC and I am wanting to possibly buy my first rental property to turn into an Air bnb.  Is there anyone on here that is familiar with this market down here?  I want to buy as close to the city or to the beach, but those areas are super expensive. I just started a business about 7 months ago.  It is doing well but I still have quite a bit of debt. I was wondering as well, do I focus on the debt before I start this venture or is it possible that this venture will help pull me out of debt?  Thanks so much, Frank

[Wilson Hunter]

I researched this market a lot, and it seems difficult for beginners with a limited budget. Charleston itself has detailed regulations that parse out the differences between the typical self-managed single family house Airbnb and a room share Airbnb. From my understanding it's quite possible to operate a room share or actual bed and breakfast on the property that you live on, but you probably can't do the typical STR thing.

The beaches are all INCREDIBLE but extremely expensive which hurts ROI. I could see someone being successful with a $4M property on Isle of Palms, but anything around $1M or less simply doesn't have the ROI. Kiawah is similar except there is an interesting class of villas in the sub-$1M range. Still, I talked to Vacasa and learned that the small Kiawah properties gross about the same as a Smoky Mountain cabin that costs 2-2.5x less. Folly Beach was traditionally the highest ROI beach and caters to younger beach goers, but prices have shot out of what I consider to be reasonable ROI range. Two years ago beachfront Folly would have been the way to go.

Sullivan's Island has heavy STR regulations and the 20 or so properties grandfathered are insanely expensive. Dewees is a beautiful and natural ferry-only access beach and has a heavy-handed "nature first" POA that currently disallows STRs, but even if they starting allowing them I would be very uncomfortable investing there with the amount of power that the collective residents have to turn on a dime.

I’ll repeat what others say here all the time - just because your local market isn’t ideal doesn’t mean you shouldn’t do STRs. I invest in a market that is a 6 hour drive from my primary residence, and not once have I felt like I could do better living closer. Everything is optimized for remote monitoring these days - I even learned about some cool phone app-operated mouse traps in another thread I posted.