Rental expectations for a beach house split into a tri-plex?
Member since 2015 · 53 posts · 88 votes
I'm trying to run the numbers for a beach house in South Carolina and am having trouble figuring out the expected income. The house is 7 bed 4 bath in the Myrtle Beach area, but the house has been split up into a triplex consisting of a 3/2 top floor and two 2/1s beneath that. When I use the STR estimate tool here on BP I get the units bringing in somewhere around $45k each per year. I've also discussed the house with a property manager in the area and they estimate that the entire house would bring in around $75k a year once it acquired an established rental clientele. The two numbers ($135K from str tool and $75 from prop mgmt) are really far off.
Does anyone have any experience with a house like this? I was thinking that the units would be full in the summer and that they would also do much better in the off season than a regular 7 bed house because in the off season there are many more people looking for smaller units and not entire families coming for vacation.
Hello Palmer,
Because the STR is subjected to the spring/summer season (April to September) of the rental year, and varies according to traffic during that season, I would be more inclined to trust the property management companies like (Elliott, Thomas, Dunes or Palmetto).
@Palmer Thomas Steamboat is very seasonal. Most properties operate under 50% occupancy for the year. I find I run about 50% occupancy in low season (April, May, October, November) And we run about 90% the rest of the year. Our occupancy numbers are much higher than larger properties. I do not have a direct contact for a comparable property in the area but have done research through airdna, rankbreeze, etc and feel my revenue would be similar if I owned a single family of the same size. The difference was the purchase price. I was able to buy this multi family property that needed work for $645,000 in 2018. I put about $300,000 in repairs and upgrades into the property. A 7 bed/ 4 bath home would have been about $1.5 million to purchase at that time. Would a 7/4 single family cost the same? If so I would buy the single family. If not, the multi family may be a better deal and offer more cash flow for your purchase price.
I think a good purchase price is going to be my only hope for this one. The family is planning on listing for a little over $1.5 million. If it was a single family house I don't think they'd have any trouble getting that. Since it's already split up, I think it's only going to get interest from investors like myself and I don't think it makes investment sense at that price. I need to go ahead and talk with the sellers to be first in line if they get crickets at their asking price.
@Palmer Thomas Steamboat is very seasonal. Most properties operate under 50% occupancy for the year. I find I run about 50% occupancy in low season (April, May, October, November) And we run about 90% the rest of the year. Our occupancy numbers are much higher than larger properties. I do not have a direct contact for a comparable property in the area but have done research through airdna, rankbreeze, etc and feel my revenue would be similar if I owned a single family of the same size. The difference was the purchase price. I was able to buy this multi family property that needed work for $645,000 in 2018. I put about $300,000 in repairs and upgrades into the property. A 7 bed/ 4 bath home would have been about $1.5 million to purchase at that time. Would a 7/4 single family cost the same? If so I would buy the single family. If not, the multi family may be a better deal and offer more cash flow for your purchase price.
I think a good purchase price is going to be my only hope for this one. The family is planning on listing for a little over $1.5 million. If it was a single family house I don't think they'd have any trouble getting that. Since it's already split up, I think it's only going to get interest from investors like myself and I don't think it makes investment sense at that price. I need to go ahead and talk with the sellers to be first in line if they get crickets at their asking price.
I think I would be fine at $900k. Not that I'm sure it would cash flow at that price. It's just that I would be ok if I had to put some money into the house every year as it's an area that I'd really like to own something. I would think of it more as buying a vacation house for myself that's subsidized by the renters rather than a pure investment that has to cash flow.
Hi - I have 2nd row duplex in North Myrtle Beach. Each side is 7br/5ba, a shared jacuzzi and pool, a shared game room with pool table and foosball, a 1 minute walk across her street and to the beach.
+$80k each side this year but after sinking $14k into furniture and the wall decor to give it a strong “beach house” feel. Let me know if I you want to talk.