All Forum Posts by: Mike Dawson

@Mike Dawson please include the details on your transaction. Condotel is shorthand for a condominium complex that is used mostly for short term rentals or rented out and not occupied by owners. Depends on HOA but usually more than 50% of the units are rented out. Also, high rise condos have a lesser LTV as they are deeming higher risk.

Next is warrantability. If the condo isn't warrantable, LTVs are limited to about 65. Next is what you are doing with the condotel, living in it, renting is Short term, long term, etc. Lastly is your qualifying info. Lower FICO, minimal experience, less than 20% down payment have higher rates so considering, 10% is on the market if some of the above factors are deemed riskier. 

@Mike Dawson if your agent is any good or has any experience working with investors they should know which buildings in Myrtle Beach lend themselves well to STR and which to avoid. Some properties have little to no amenity restrictions if you choose to self-manage or use a third-party property manager (offsite). Others, like the ten or so properties managed by Brittain, restrict guest access to the commercial facilities onsite (restaurants, bars, laundry, fitness rooms) unless they book directly through the resort. But in general, your guests can still use the pools and lazy rivers, and most owners report their occupancy rates are not affected by the restrictions so long as they have set the proper expectation. None of the gyms are any good anyway, and in my opinion most folks pack enough for a week-long vacation to not have to worry about doing laundry.

As you're finding, HOA fees vary greatly in these condotel high-rises. You can't take them at face value though, as some are packed with pretty decent value. For example, I have a client under contract for an efficiency unit at Grande Cayman (a Brittain property). This is a well-maintained resort loaded with water attractions and things to do. The monthly HOA fee is $509. Not only does that $509 cover maintenance of the pools, elevators, common areas and landscaping, but it also covers electricity within the unit, cable TV and internet, water/sewer, and trash. Essentially my client will have no utility expenses outside of that monthly HOA fee. And to answer your question about building insurance - also included in the HOA fee - it's necessary to ensure the building can be reconstructed in the event of a fire, major hurricane, etc. You'll have your own coverage for your individual unit, but what good is that if the building can't be recreated?

Regarding other fees, you'll need a business license to operate an STR in Myrtle or North Myrtle. It's treated like a tax and based on your annual revenue. Budget for around $300/year.

Hi @Mike Dawson,

We own a condo in MB as a vacation home.  I’m sitting on my balcony staring at the beautiful Atlantic as I write this :)

Agree with some of the others here but also want to add:

1. Some of the buildings DO allow you to self-manage.

2. This city thrives on tourism so STRs are usually welcome but there are areas that want to keep it to residents only. 

3. Find a realtor that REALLY knows this area. There are some on BP that will chime in here and they will help you with the items I mentioned. 

4. If you want a vacation home that mostly pays for itself, a condo in MB is great. If you start looking at other metrics (cash on cash, ROI, etc), you'll be looking a long time. A vacation home is personal, investing is not.

Good luck on your journey!

Can your realtor filter things out for you based on the HOA costs and hidden fees?

Otherwise I'm not sure there's much to do other than put your head down and keep at it.  For most of us every deal we've bought required plenty of tedious work at the computer and had plenty of deals that we thought looked great only to find there was something hidden underneath upon further inspection.

I wouldn't worry too much about always avoiding HOA. That works for some people but there are plenty of people around here doing well with STRs in an HOA, especially HOA's designed specifically to embrace and support STR like many beach condos.

As far as things to look out for, the other big one is assessments, as well as potential financing roadblocks with warrantable/non-warrantable condos.  Avery Carl (active on this forum) has a podcast episode on her show (The Short Term Show) with an episode specifically about condos in Myrtle Beach that touches on a lot of these things specifically.  I would think it's a must listen as part of your search.