Myrtle Beach is a wonderful place to visit for its pristine beaches and prime family atmosphere.
Many people from all over the East Coast find themselves in Myrtle Beach summer after summer for family vacations, golf getaways, and fine dining. It's also a great locale for investors because of the multiple properties available for vacation and rental homes.
What does it take to buy a vacation home in Myrtle Beach? It really depends on your personal and financial situation.
There are a few things you should know before investing in a vacation home--in Myrtle Beach or otherwise. Buying vacation rental property vacation homes for sale is a big decision that shouldn't be taken lightly.
If you're interested in buying a vacation home in Myrtle Beach, then you're in the right place. In this post, we'll discuss some tips to get you started on your journey.
10 Tips for Buying a Vacation Home in Myrtle Beach
Whether you're looking for beachfront condos for sale in Myrtle Beach or a private oasis on the outskirts, there's something to suit any taste and budget. All you have to do is determine how you want to use the property when you're visiting and when you're not.
If you're ready to retire and spend most of your days golfing or playing on the beach, you may not need anything too elaborate. If you plan to spend a lot of time entertaining and living in your home, something more spacious may be your best bet.
Here are some things to think about before you jump into the first property you find for sale.
1. Occupancy
The first thing you'll want to do when considering investing in a vacation home is to decide whether you'll rent it out when you're not using it.
You can perform a simple search of vacation rentals for sale to find homes that fall into this category. It's also important to make sure that the home you're considering is eligible as a vacation rental if that's how you intend to it.
Sometimes there are strict regulations pertaining to using your vacation home as a vacation rental. You'll need to be sure you understand the rules governing the area where you're shopping.
2. Get a Realtor
Once you've decided what type of property you're interested in, it's time to contact a reputable and reliable realtor.
There are literally hundreds of properties for sale at any given time in Myrtle Beach. Having a realtor on hand will help matters immensely. Your real estate agent can give you advice on property rental rules and clarify local transaction fees, taxes, and commissions.
A good realtor can also help you negotiate the cost of the property. They'll help you find out what it costs to maintain as well as previous rental history.
3. Location
Of course, one of the most important things to consider for your vacation property is the location.
You will probably pay more for prime real estate right on the beach in comparison to an ocean view condo on the back side of a building. Your decision may also depend on what you plan to do while you're visiting Myrtle Beach.
If you plan to rent your vacation palace out, you'll need to be sure it's in a short-term rental zone. These zones are set by Homeowner's Associations throughout the region. Ask your real estate agent to confirm these areas before you start shopping.
4. Budget
Perhaps the most important thing you'll need to focus on before you can invest in a vacation home is to set up your budget.
Of course, you'll need to plan for the overall cost of the property--including loan origination fees. But there are other costs and even income to consider, especially if you plan to rent the property out.
If you do plan to rent the property, you should be realistic about your rental income expectations. You should also consider how often you will plan to use the property yourself and account for that time in your budget making decisions.
Other things to consider when compiling your budget are insurance, HOA fees (if applicable), and taxes.
HOA Fees
One of the first questions you should ask your realtor before deciding on a property is whether the property is part of an HOA. If so, there are definitely extra monthly fees involved on top of your regular mortgage payment.
You'll need to find out what the HOA fees cover specifically such as utilities, including electric, internet, and water/sewer expenses. You may also be interested to learn if the HOA fees include home owner's insurance. Other charges included in your HOA fees may include building repairs and maintenance.
Taxes
Taxes in South Carolina are not as hefty as some other states, but you'll still be required to pay them. If you're not a resident of the state, you'll pay a little more than in-state residents.
You'll want to consider the type of property you're buying in order to assess the taxes that you'll be liable for. High-risk properties such as oceanfront homes or condos will fall into a higher tax bracket.
Find out or ask your realtor what the tax map number is for the home in question to review the taxes. You can also visit the county property records for more detailed information.
Rental Income
Assessing your rental income will be based on a few different factors. Depending on the location of the property in proximity to the beach, golf, or dining options may also depend on how much you can charge.
You can review the prior rental history by requesting it from the current owner. If the property in consideration is a condo unit, you can ask the property management company to supply this information.
Besides the income, you'll also need to be prepared for other expenses that come along with renting. These may include repairs and maintenance, but you should also think about cleaning costs after each visitor leaves.
It's wise to make buying decisions based on cost before calculating income.
5. Property/Rental Management
A vacation property requires just as much if not more security than your primary home.
For this reason, it's always a good idea to hire a property management company to keep an eye on your property for you. You would hate to be caught in a situation where your pipes burst or the home has burglarized without your knowledge.
If you intend to rent your property when you're not using it, you'll want a rental agency to handle the logistics for you. A rental agency or management company can help you find renters, take care of maintenance and housekeeping. They'll also notify you in the event that something happens with your property.
You'll want to know the difference between an on-site rental management company and an off-site rental management company. That way, you can make the best choice for your property.
On-Site Rental Management
If you're purchasing a unit within a building, most likely you'll have an on-site rental management company that manages units in the building. These companies typically charge anywhere from 40%-50% of your gross profit rental income.
The important thing to keep in mind, however, is what these companies can do for you.
An on-site rental management company works directly on the premises. They take calls and queries about potential units for rent. If your unit is available, the rental management company can plug renters in and keep your unit occupied throughout the peak seasons.
Considering this, you'll net more profit over the long term than you might with an off-site rental management company.
Off-Site Rental Management
Off-site rental management companies only charge 10%-20% of your gross profit. But it's important to keep in mind that they may not be as efficient at caring for your guests as an on-site management company.
If you have an off-site rental management company taking care of renters and maintenance and cleaning, that's fine. But what about amenities for your guests or getting guests to fill your unit in the first place?
If your property is a unit in a building, the on-site rental management company will not rent your unit if it is managed by an off-site company. This could lead to the loss of renters. Besides that, your guests may not be allowed to use property amenities such as the pool, which can be a deterrent.
6. Lending/Financing
Financing options for vacation homes are different than primary residences. For this reason, you'll need to be prepared for the approval process.
Many investors opt to pay cash for condos because lenders are not likely to provide financing. Condos are considered high-risk properties and are therefore non-warrantable. This can make it far more difficult to find a lender that's willing to finance.
Otherwise, if you are financing a vacation property, you can expect to come up with at least 30% down. You should also expect a higher interest rate.
7. Choosing the Best Unit/Property
Remember what we mentioned about getting a realtor?
A realtor can help you find the right property for your taste and budget without a lot of hassle. Depending on your intention for the property, the realtor can help you assess associated costs or average occupancy and rental rates.
If you're planning to use the property for rental income, it's important to consider your return on investment to help your decision. The recommendation is to look for properties that offer as close to 10% annual return as possible.
For those that only plan to use the unit as your primary vacation destination, it's important to match your choice with your lifestyle. If you live in the city, you may want a property off the beaten path. Likewise, if you live outside the city limits, you may want something closer to the hustle and bustle for your vacation residence.
8. Security
Of course, you want your vacation home to be safe from intruders and vandalism just as much as you want security for your primary home.
This is something to discuss with your property management company up front. You can also talk to neighbors or other locals that you may know to ask them to keep an eye on your property from time to time.
You may consider reviewing crime rates for the area where you intend to purchase. It will also be easier to rent your property out if there is a security system in place.
9. Maintenance
While your rental management company can take care of basic maintenance for you throughout the year, you'll still need to be prepared to take some time fixing up your property.
Make sure to account for this necessary task when planning your visits to your new vacation home. You may need extra time during your stay to perform maintenance so that you don't spend your entire vacation couped up fixing things.
10. Ask Questions
The most important thing you can do when buying a vacation home is to ask as many questions as you can possibly think of.
Especially if you don't live in the state, you'll want to make sure that your property will be properly cared for. Don't hesitate with your queries to ensure that you get the most honest and upfront answers.
Remember, the more questions you ask, the fewer surprises you'll run into later.
Final Thoughts
Buying a vacation home may be one of the most exciting things you ever do--as long as you know what you're getting into.
Make sure to keep these tips in mind when you start thinking about your purchase so that you can be best prepared for what to expect in the process. And then, get ready for vacation because you'll have your own property to visit!
When you're ready to invest in the perfect vacation home, check out our search page. We have an extensive list of Myrtle Beach real estate available.
Give us a call 843-839-9870 We are here to answer your questions.
Talk soon!