Remote Newbie Vacation Rental SC from PA

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Remote Newbie Vacation Rental SC from PA

Investor · North Myrtle Beach SC · Member since 2019 · 12 posts · 5 votes

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!

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Zach Stroud

Investor · Kitty Hawk, NC · Member since 2017 · 6 posts · 8 votes

@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.

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Heather Carrow
Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes
6y
Jeffrey, congratulations on your first STR! I live close to PA and I am planning on doing STR's in the Carolinas as well! Haven't jumped in yet because I am working on saving for a down payment. What made you choose Myrtle beach?
1 Reply
Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
6y
Hey @Jeffrey Hillen, welcome to the forum! You will find tons of great info on here, especially about self management.
AirBNB might put in all the occupancy taxes for your area, so double check that. They do for me.
https://www.airbnb.com/help/ar...
Seeing as you have added a layer of complexity with an LLC, you might want to consider a CPA to do you taxes to make sure you are on the up and up. I am assuming that they house is in the LLC.
2 Reply
Katie Hole
Realtor · Myrtle Beach, SC · Member since 2017 · 39 posts · 11 votes
6y
@Jeffrey Hillen Welcome! My husband and I live in Myrtle Beach but are from Reading PA. We have a LTR but have been thinking about getting into STR.
2 Reply
Jeffrey Hillen
OP
Investor · North Myrtle Beach SC · Member since 2019 · 12 posts · 5 votes
6y
Thank you Heather! We liked the North Myrtle Beach area with the overall family feel and safety when we use it ourselves. My parents wanted a getaway option in winter as well as an area that has more than just a beach (they get bored easily).
I like the airport being under 30 minutes and the pricing in the area still allowed the numbers to make sense. I’d recommend BareFoot Resorts which is where we settled on.
1 Reply
Jeffrey Hillen
OP
Investor · North Myrtle Beach SC · Member since 2019 · 12 posts · 5 votes
6y
Thank you Michael. The LLC was formed with the purpose of the property. I appreciate the insight and link on AirBnB.
0 Reply
Jeffrey Hillen
OP
Investor · North Myrtle Beach SC · Member since 2019 · 12 posts · 5 votes
6y
Thank you Katie. You made a wise choice to go South haha. Let me know some local places you recommend in Myrtle; we spent most of the time north of the city. I’m hoping to be back down and would definitely be interested in additional properties.
0 Reply
John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
6y
Definately get a tax professional to make sure you get set up correctly with your taxes.
1 Reply
Andrew Daniels
Flipper/Rehabber · Lancaster/ Chester County · Member since 2019 · 5 posts · 1 vote
6y
Has anyone here tried rentals in the Outer Banks area in North Carolina? I am also from Pennsylvania looking for more STR other than the Poconos.
0 Reply
Heather Carrow
Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes
6y
@Andrew Daniels The OBX is where I am planning to go for STR's. It seems like a great market. Just trying to get my ducks in a row before I pull the trigger.
0 Reply
Mark Miles
Rental Property Investor · Philadelphia, PA · Member since 2016 · 543 posts · 716 votes
6y
Originally posted by @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!

Welcome and much love to all my fellow Pennsylvanians on this thread! You’re all making the right move by investing down south, trust me on this one! That’s where I’ve made my big money!
Running a successful STR comes down to 3 Ps: pics, people & pricing.

1) Decorate your house nicely & pay a professional photographer to take some amazing pics

2) Hire amazing people - cleaners, handyman, recruit some neighbors to help fill in the gaps, & self-manage or hire an offshore VA to manage the property if you'd rather make yourself rich instead of making a local property manager rich (more on that here: https://www.biggerpockets.com/... )

3) Price fiercely to maximize profits not occupancy (they're not the same thing). If you set higher prices and rent fewer nights but make the same amount of money, you actually come out ahead. Less money spent on supplies, less wear and tear on your place, less money spent on utilities, fewer guest headaches, etc.
1 Reply
Jeffrey Hillen
OP
Investor · North Myrtle Beach SC · Member since 2019 · 12 posts · 5 votes
6y
@Markmiles, thank you for posting and appreciate the advice. We were able to put this first property under agreement without financing. It would take me another 9-12 months to consider anything in That price range. What Is your opinion on HELOC on the unit or other lending alternatives once we get some rents coming in?

@Mark Milesundefined
0 Reply
Meg Minetree
Real Estate Broker · Outer Banks, NC · Member since 2020 · 8 posts · 6 votes
6y
@Andrew Daniels and @Heather Carrow - I am a full-time resident (since 2011) and licensed North Carolina REALTOR® and Broker on the Outer Banks. Let me know if you can use my services. My husband and I own 3 LTR, 1 STR, and are finishing up a rehab project we plan to put on the market by the end of the month.
2 Reply
Zach Stroud
Investor · Kitty Hawk, NC · Member since 2017 · 6 posts · 8 votes
6y
I have 2 STR and 1LTR on the Outer Banks. Overall, I think it is a good market with positive cash flows on the short term rental side, not long term rentals-at least for me. The market does appear to be heating up since Covid has caused more people than usual to vacation here this summer. I am hearing that there are multiple bids on properties Kitty Hawk-North of Kitty Hawk primarily in the 300k-500k range.
If you have any questions about investing in the area, let me know. There are certainly nuances to the area and spots you want to avoid, mostly for flooding/beach erosion issues.
1 Reply
Heather Carrow
Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes
6y
@Zach Stroud What are your thoughts on STR's in the southern part of OBX (Buxton, Frisco, Hatteras) ?
0 Reply
Zach Stroud
Investor · Kitty Hawk, NC · Member since 2017 · 6 posts · 8 votes
6y
@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.
4 Reply
Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
6y
Hey @Jeffrey Hillen, that @Zach Stroud has got it goin on! Lots of good info in that post.
Now, with the mention of all the flooding, you need to check on flood insurance. That will depend on your mortgage company.
We looked at a beach house in Lincoln City, OR first. It was Zone A I believe and the flood insurance was astronomical. Our mortgage company only allowed the FEMA flood insurance which was about $5900 a year. The Lloyd's of London policy with more coverage was just about $800 a year.
So, double check as you are searching for a place what your mortgage company will allow in regards to flood insurance.

0 Reply
Jeffrey Hillen
OP
Investor · North Myrtle Beach SC · Member since 2019 · 12 posts · 5 votes
6y
This all looks good. Our HOA covers the exterior but the contents were ur on a Lloyd's policy.
0 Reply
Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
6y
@Jeffrey Hillen

It looks like you have to file a partnership return for the LLC.
The partnership return will distribute a k-1 to you and your dad which you would then use to file your individual return.
[email protected]917-280-8544
Basit Siddiqi CPA4.979 Reviews
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1 Reply
Heather Carrow
Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes
6y
@Zach Stroud Thank you for your comment! I appreciate your input. I figured that flooding/storms would be a huge barrier in the southern side of OBX. I wish It wasn't because that is my favorite part of OBX.
0 Reply
Valerie Rogers
Property Manager · Aurora, CO · Member since 2014 · 221 posts · 210 votes
6y
When I read your initial post/question I interpreted your question to be about filing/remitting the required (lodging/sales) taxes for your bookings (not the federal/state taxes you would file on annual returns).

@Michael Baum mentioned that Airbnb might already be collecting & remitting 100% of the required taxes is your area. If that is so and you ONLY advertise on Airbnb and do not accept any direct bookings then you don't have to worry about it; Airbnb will take care of it for you.

But if you advertise elsewhere or take direct bookings from guests (always the preferred method) then you do need to collect and remit the required taxes for your property's location (city, county, state).

I always recommend Avalara MyLodgeTax service to my clients who are new to the STR business. When you are getting your first rental up and running it can be overwhelming with all that needs to be done. Making sure your taxes are properly collected and remitted is something you want done right from the start. Their prices are reasonable to take that important piece off your plate.

Best wishes to you on your new endeavour!
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