Remote Newbie Vacation Rental SC from PA

[Jeffrey Hillen]

After listening to BP Podcasts for 6 months on a hour commute to and from work, I finally jumped in! I'm 33 and started an LLC with my Dad. We bought a 4 bed 2.5 bath in North Myrtle Beach SC. We both live near Lancaster, PA.

I listed on Air BnB and have it fully booked through August. I’m looking for advice on handling the tax filings since I currently am not setup because I didn’t think it would go this fast. Also, I’m looking to grow my network and want to join a community with like minded people to generate passive income and build wealth. 

Any advice and people willing to connect for future deals I’d appreciate it.... HERE WE GO!

[Zach Stroud]

@Heather Carrow Hi Heather, Many people successfully do short term rentals in this area. In general, these properties are going to rent 100% of the time memorial day through labor day. There are some hurricane risks to consider. Those areas seem to get a major hit by a hurricane about every 3 years. If you look at a map, you can see why. They stick out in the middle of the Atlantic Ocean.  Ocracoke (just south of Hatteras) was devastated in Sept 2019 from Hurricane Dorian. 

Frisco and Hatteras tend to have more sound side flooding than beach side. Most houses are elevated. Buxton actually doesn't flood as much as it has some more elevation in the land. The problem is that there is limited beachfront real estate available in Buxton. It is mostly off of Old lighthouse road. Another consideration is that the beach erosion is significant in Buxton. They had to move the Buxton lighthouse inland in 1999 due to beach erosion. They will likely have to move it again due to encroaching sea levels. 

The actual island (Rodanthe, Salvo, Avon, Buxton, Frisco and Hatteras) has a tumultuous history. The main road on it, highway 12, seems to flood all the time. This pushed people away from investing in the area. However, they built a new bridge over the Oregon Inlet last year and they are building what locals call the "jug handle" bridge in Rodanthe to bypass the main part of highway 12 where it floods. This is to be completed in the next year. This has created more investor confidence in investing in the area and house prices have gone up. My honest opinion though is that by the year 2100, i think most of the island will be underwater. 

You can get a reasonable house, 3/2 "beach box" for under 300k in the areas you mentioned, within walking distance to the beach, and rent it out and it should cash flow. But be prepared for some capex. Take an average life span of roof, HVAC, etc... and cut it in half. The salt air and high winds destroy a lot. 

My personal preference, however, is to invest "in town." I think Southern Shores, Duck and Corolla (still part of the outer banks) are safer in regards to storms and flooding. Most of these areas are X flood zone. And they tend to attract wealthier vacationers. I also think we are seeing more long term residents in the area as telecommuting becomes more permissible. I think this should increase values long term. In addition, long term residents with children clamor to get in the Kitty Hawk Elementary School zone district. It is a very good public school.