The $40,000 Number That Gets People in Trouble
If you've been shopping oceanfront condos in Myrtle Beach, you've seen it. A listing that says the unit brings in $40,000 or $50,000 a year in rental income. You start doing math in your head, and it looks like a slam dunk.
Here's the thing. That number is real. It's also not the whole story.
Most listing agents show you the gross income and stop there. They don't walk you through what it actually costs to run that condo. And once you see the real numbers, the picture changes.
I've been selling real estate on the Grand Strand for over 20 years. I've been part of more than 15,000 home and condo sales. I've watched a lot of buyers fall in love with a rental projection and skip right past the expense side. Let's fix that.
Watch the full breakdown here: The True Cost of Owning an Oceanfront Condo
What It Actually Costs to Run an Oceanfront Condo
Operating expenses on an oceanfront condo typically eat up somewhere between 55 and 65% of your gross rental revenue. Not 10%. Not 20%. More than half.
Let's break down where that money goes.
HOA and Regime Fees
Oceanfront buildings sit right on the water, and that comes with a price tag. The HOA is covering building maintenance, elevators, pools, lazy rivers, and coastal insurance policies that are far more expensive than what you'd see on an inland property.
You should expect HOA fees to run anywhere from $600 to over $1,000 dollars a month. That's before a single guest checks in.
Property Management Fees
If you hire an on-site or local vacation rental manager, plan on handing over 25 to 40% of your gross income for that service.
Think you'll dodge that by self-managing on Airbnb? You'll save some money, but you won't save it all. Cleaning crews, booking software, and dynamic pricing tools still cost you real time and real cash every month.
South Carolina's Investment Property Tax
Here's one that catches a lot of buyers off guard. In South Carolina, non-owner-occupied rental properties are taxed at a 6% assessment ratio, not the 4% ratio you get on a primary residence.
That difference can double your property tax bill compared to what you'd pay on a home you actually live in. If you're running the numbers off a friend's primary residence tax bill down the street, you're going to be short.
Salt Air and Guest Turnover
Living on the ocean is beautiful. It's also brutal on a building.
Salt air destroys HVAC units, door locks, and outdoor furniture at roughly twice the rate you'd see inland. Add in heavy guest turnover from short-term rentals, and your wear and tear climbs even faster.
On top of that, you need to budget for HOA special assessments. When the elevator needs replacing or the roof needs repair, that bill gets split among every owner in the building, and it can show up with little warning.
The Real Math: $40,000 Gross vs. $12,000 to $14,000 Net
Let's put it all together.
Say a two-bedroom oceanfront condo grosses $40,000 a year in rental income. After you subtract HOA fees, taxes, insurance, management fees, and maintenance reserves, you might walk away with $12,000 to $14,000 net.
That works out to a realistic cap rate of around 2 to 4%. Not the double-digit return the gross number made you picture.
So Are Oceanfront Condos Still Worth Buying?
Not at all does that mean stay away. It means buy for the right reasons.
Oceanfront condos still offer strong equity growth over time. You get real tax depreciation benefits. And you get a place your own family can vacation in whenever you want, which isn't something you can put a dollar figure on.
The buyers who do well with these properties are the ones who go in with real numbers instead of the rental projection off a flyer. They know the expense side going in, so nothing surprises them a year later.
Want the Real Numbers on a Specific Building?
I can run an actual ROI spreadsheet on a specific Myrtle Beach condo building so you know exactly what you're walking into before you make an offer.
Drop a comment on the video or send me a direct text. I'll get you real numbers, not a listing sheet fantasy.
My name is Greg Harrelson with Century 21 The Harrelson Group.
About Greg Harrelson
Greg Harrelson is a seasoned Realtor® with more than 30 years of experience serving the Myrtle Beach and Grand Strand markets. As the founder of Century 21 The Harrelson Group, Greg has built his career helping buyers, sellers, and investors achieve success in every corner of the coastal Carolina real estate market. His expertise spans residential homes, investment properties, land development, and coastal condos. Known for his deep local knowledge, innovative marketing strategies, and commitment to personal service, Greg consistently helps clients reach their real estate goals while navigating the ever-changing market with confidence and precision.
