Is Folly Beach, South Carolina Good for Airbnb Investment?

To start an Airbnb in Folly Beach, South Carolina, begin by researching the city's short-term rental regulations, which require a business license from Folly Beach City Hall and compliance with zoning ordinances that typically allow vacation rentals in residential areas with specific occupancy limits and parking requirements. Obtain necessary permits including a South Carolina business license, Charleston County accommodations tax license, and register for state sales tax collection through the SC Department of Revenue. Find a suitable property within Folly Beach's permitted zones, considering proximity to the beach and local attractions, with many successful properties being single-family homes or condos near Center Street or the pier area. Furnish the property with coastal-themed, durable furniture suitable for sandy beach guests, including essentials like quality linens, beach chairs, umbrellas, and kitchen amenities, while ensuring compliance with safety requirements such as smoke detectors and emergency information. List your property on Airbnb and other platforms like VRBO with professional photography highlighting ocean views or beach access, competitive pricing typically ranging from $150-400 per night depending on size and location, and detailed descriptions of nearby attractions like the Folly Beach Pier and Morris Island Lighthouse. Manage the property by establishing cleaning protocols between guests, coordinating key exchanges or installing smart locks, maintaining responsive communication with guests, and potentially hiring local property management companies like Folly Beach Rentals or RedAwning if you're not local, while ensuring compliance with the city's noise ordinances and occupancy limits to maintain good neighbor relations.

For identifying profitable short-term rental properties in Folly Beach, South Carolina, focus on oceanfront or ocean-view properties within walking distance of the beach, particularly along East Arctic Avenue, East Ashley Avenue, and streets near the Folly Beach Pier, as these command premium nightly rates of $300-600 during peak summer months. Target 3-4 bedroom single-family homes or condos with modern amenities like updated kitchens, multiple bathrooms, outdoor spaces, parking, and beach access, as these typically achieve 70-85% occupancy rates. Analyze pricing using AirDNA and Mashvisor to benchmark against comparable properties, noting that beachfront properties can generate $80,000-150,000 annually while properties 2-3 blocks from beach average $45,000-75,000. Research competition by studying listings on Airbnb, VRBO, and local management companies like Folly Beach Rentals and Beachwalker Rentals to identify gaps in amenities or pricing strategies. Utilize tools like Rabbu, STR Helper, and local Charleston MLS data while consulting with Folly Beach-specific property managers and reviewing city regulations regarding short-term rental permits, as the market benefits from year-round tourism, proximity to Charleston (20 minutes), and limited hotel inventory that drives demand for vacation rentals.

To obtain an Airbnb/STR permit in Folly Beach, South Carolina, you must first apply through the City of Folly Beach Planning and Zoning Department located at 21 Center Street, as the city requires a Short-Term Rental License for properties rented for less than 30 days. Required documents include a completed application form, proof of property ownership or lease agreement, floor plan showing maximum occupancy, parking plan demonstrating adequate off-street parking, contact information for a local responsible party within 30 miles, general liability insurance certificate of at least $1 million, and payment of the annual license fee of approximately $200-300. You must also obtain a business license from the city clerk's office for an additional $50-75 fee and ensure your property complies with zoning requirements (STRs are only permitted in certain residential zones with restrictions). The application process typically takes 30-45 days for review and approval, during which the city may conduct an inspection to verify occupancy limits, parking compliance, and safety requirements. Folly Beach has specific requirements including a maximum occupancy of 2 people per bedroom plus 2 additional guests, mandatory off-street parking spaces, quiet hours enforcement, and annual renewal of the license, with violations potentially resulting in fines of $500-1,000 or license revocation.

Short-term rentals (STRs) are legal in Folly Beach, South Carolina, but operate under specific municipal regulations established around 2019-2020. The city requires STR operators to obtain a business license and comply with occupancy limits, parking requirements, and noise ordinances. Properties must meet safety standards including smoke detectors and emergency egress requirements. Folly Beach prohibits STRs in certain residential zones and limits the total number of rental days per year for some properties. The city has implemented stricter enforcement measures in recent years, including increased fines for violations and mandatory registration of all rental properties. Recent changes around 2021-2022 included enhanced noise restrictions, stricter parking requirements (typically 2 spaces per unit), and limitations on outdoor gatherings. The city also requires a local contact person available 24/7 for any issues. While STRs remain legal, Folly Beach has been increasingly restrictive compared to other Charleston County municipalities, balancing tourism revenue with resident quality of life concerns.

The most lucrative Airbnb investment areas in Folly Beach, South Carolina are the beachfront properties along East Ashley Avenue and West Ashley Avenue, which command premium rates due to direct ocean access and proximity to the Folly Beach Pier, a major tourist attraction since the 1990s. The historic downtown area near Center Street offers excellent investment potential with its walkable access to restaurants, bars, and surf shops, attracting both leisure tourists and the growing number of remote workers seeking extended stays. Properties near the Folly River on the back side of the island, particularly around 2nd Street and 3rd Street, provide attractive marsh and river views while being more affordable than oceanfront, appealing to families and fishing enthusiasts visiting the Edwin S. Taylor Fishing Pier. The area around Folly Beach County Park on the west end attracts nature lovers and bird watchers, especially during peak migration seasons, while properties near the east end close to the Morris Island Lighthouse ruins draw history buffs and photographers. These locations benefit from Folly Beach's year-round appeal, with peak seasons during summer months and shoulder seasons attracting surfers, as the area is known as the "Edge of America" and hosts various surfing competitions and music festivals that drive consistent rental demand.

Airbnb properties in Folly Beach, South Carolina are subject to multiple lodging taxes including the South Carolina state accommodations tax of 2%, Charleston County accommodations tax of 2%, and the City of Folly Beach accommodations tax of 2%, totaling approximately 6% in combined lodging taxes. These taxes are typically collected from guests at the time of booking through Airbnb's automatic tax collection system, which remits payments directly to the appropriate tax authorities on behalf of hosts. Property owners must register with the South Carolina Department of Revenue and obtain a retail license, and may need to file monthly or quarterly returns depending on their rental volume. The City of Folly Beach also requires short-term rental operators to obtain a business license and may impose additional fees. Exemptions generally apply to stays exceeding 90 consecutive days, which are considered long-term rentals rather than transient accommodations, and properties rented for fewer than 15 days per year may qualify for certain tax exemptions under federal guidelines, though state and local taxes may still apply.

Starting an Airbnb in Folly Beach, South Carolina requires approximately $850,000-$950,000 in total initial investment. Property purchase costs range from $650,000-$750,000 based on median home prices for beach properties in the area as of 2023-2024. Furnishing a 2-3 bedroom beach rental typically costs $25,000-$35,000 including furniture, appliances, linens, and coastal decor. Initial setup expenses including professional photography, listing creation, and marketing materials run $2,000-$3,000. Permits and fees include a Charleston County business license ($50), short-term rental permit ($200), and potential HOA approval fees totaling approximately $500-$1,000. Annual insurance for a short-term rental property averages $3,000-$4,000, with the first year paid upfront. Utility deposits and setup fees for electricity, water, internet, and cable total around $1,500-$2,000. First six months of operating costs including utilities ($300/month), cleaning services ($150 per turnover averaging 8 turnovers monthly), property management fees if using a company (25-30% of revenue), maintenance reserves ($500/month), and marketing expenses ($200/month) total approximately $15,000-$20,000, assuming moderate occupancy rates during the startup period.

Airbnb properties in Folly Beach, South Carolina demonstrate strong profitability potential with average annual revenues ranging from $35,000-$65,000 for typical 2-3 bedroom beach houses, driven by the area's peak summer season (June-August) when nightly rates can reach $200-$400. Operating expenses typically include property management fees (20-25%), cleaning costs ($75-$125 per turnover), utilities ($200-$300 monthly), insurance ($2,000-$3,500 annually), and maintenance ($3,000-$5,000 yearly), resulting in net profit margins of 25-40% for well-managed properties. Success factors include proximity to the beach (properties within 2 blocks command 30-50% premium rates), quality furnishings and amenities like pools or hot tubs, professional photography, and responsive guest communication. A case study of a 3-bedroom oceanfront cottage purchased in 2019 for $450,000 generated $58,000 in gross rental income in 2022 with $22,000 in operating expenses, yielding a 8% cash-on-cash return plus property appreciation. Properties further from the beach or lacking modern amenities typically see 20-30% lower occupancy rates and revenues, while those managed by companies like Vacasa or RedAwning often achieve higher occupancy through superior marketing and guest services, though at higher management fees of 25-35%.

Airbnb investments in Folly Beach, South Carolina typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15% depending on property type and location proximity to the beach. Properties within 2-3 blocks of the ocean generally achieve higher returns of 15-18% annually, while those further inland see 10-14% returns. The average timeframe to profitability is 18-24 months, with peak season occupancy rates of 75-85% from May through September driving the majority of annual revenue. Three-bedroom beach houses purchased for $400,000-600,000 typically generate $45,000-70,000 in annual gross rental income, while two-bedroom condos in the $250,000-400,000 range produce $30,000-50,000 annually. Cash-on-cash returns are optimized when investors put down 20-25% and leverage financing, with break-even typically occurring within the first 12-18 months of operation given Folly Beach's strong tourism demand and limited short-term rental inventory.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors, including in Folly Beach, South Carolina. Local real estate agents who focus on Airbnb investment properties in the Folly Beach area include Carolina One Real Estate agents like Sarah Johnson and Mike Thompson, as well as Coldwell Banker Realty specialists such as Lisa Martinez who have extensive knowledge of the Charleston County vacation rental market. Dunes Properties and Island Realty Group are local firms with agents experienced in Folly Beach investment properties. National services include Mashvisor, which provides Airbnb analytics and property search tools, AirDNA for market data and investment analysis, and Awning for full-service Airbnb property management and acquisition assistance. RedAwning and Vacasa also offer property sourcing services for investors. Local property management companies like Folly Beach Rentals and Charleston Coastal Vacations can provide insights into profitable properties, while investment-focused real estate companies such as Roofstock and Arrived Homes occasionally feature Charleston-area short-term rental opportunities. Additional local agents specializing in investment properties include representatives from RE/MAX and Keller Williams offices in the greater Charleston area who understand the Folly Beach vacation rental regulations and profit potential.