Folly Beach Short-Term Rental Basics For Buyers

Thinking about buying a place on Folly and using it as a short-term rental? You’re not alone. The beach lifestyle is appealing, and Folly’s proximity to Charleston adds year-round demand. This guide gives you the essentials you need to evaluate a property with clear eyes, from permits and taxes to income, insurance, and day-to-day operations. Let’s dive in.

Folly Beach STR rules at a glance

Regulations for short-term rentals on Folly Beach exist at the city, county, and state levels. You’ll typically need a municipal STR permit or registration, a business license, and a designated local contact who can respond 24/7. You must also register for state and local sales and accommodations taxes and follow operational standards like occupancy limits, parking, noise, and trash rules. Always confirm the latest steps and timelines with the City of Folly Beach, Charleston County, and the South Carolina Department of Revenue before you go under contract.

Zoning rules affect where STRs are allowed and how they operate. Some zones may allow STRs by right, while others have conditional uses or limits. As you evaluate addresses, check the zoning designation, any overlay districts, and HOA covenants that may set stricter rules than the city.

Taxes and licensing basics

You should expect to collect and remit state sales tax plus local accommodations or hospitality taxes. Filing frequency and rates can vary by jurisdiction, so build a simple tax calendar early and decide whether you will file yourself or use a service. Plan for permit application fees, renewals, and possible inspection charges. Keep records of filings and payments in case the city or county audits your account.

Safety, inspections, and insurance

Local rules often require safety equipment such as smoke and carbon monoxide detectors and fire extinguishers. Some municipalities require inspections before issuing a permit and periodic reinspections. Coastal homes typically need wind or hurricane coverage and flood insurance, which can be a major line item. Get quotes early and verify coverage availability for STR use.

HOA and private covenants

If the property is in a community with an HOA, the governing documents can make or break your plan. HOAs may prohibit or limit STRs, impose minimum stay rules, cap occupancy, or require owner registration. Request the full set of covenants, bylaws, and rules during due diligence and verify compliance history with the management company.

Neighborhood and demand patterns

Seasonality and timing

Summer and holiday weekends are the peak season for Folly Beach. Spring and fall can deliver strong shoulder-season demand, especially when Charleston hosts events and festivals. Off-season weekends still draw visitors who want the beach and easy access to the city.

Location traits guests value

• Walkability to Center Street for dining and shops
• Easy beach access and views, especially near the pier
• Private parking and simple check-in
• Outdoor spaces like decks and grills
• Pet-friendly setups where allowed

Homes in the Center Street area offer convenience and nightlife, which can come with more noise and parking pressure. Quieter residential blocks often attract guests looking for a calm stay and can align with more restrictive neighborhood expectations.

Risk and infrastructure factors

Parking is tightly enforced on Folly, so off-street spots are a real advantage for guest satisfaction. Flood zones and elevation matter for insurance and long-term resilience. Some properties are on septic systems, which can affect occupancy assumptions and maintenance costs. Budget for coastal wear, salt exposure, and storm readiness.

Estimating income and expenses

Revenue drivers and benchmarks

Projected income depends on bedroom count, amenities, nightly rates, occupancy, and your marketing and management strategy. Ask the seller for historical booking calendars, platform payout reports, and a profit-and-loss statement. Cross-check with local managers and trusted STR data services to model seasonal rates and occupancy bands for homes similar in size and location.

Common operating costs

• Utilities, internet, and streaming services
• Cleaning, laundry, and consumables
• Routine maintenance, landscaping, and trash service
• HOA dues if applicable
• Management fees and booking platform costs
• Sales and accommodations taxes; permit and renewal fees
• Insurance for wind, flood, liability, and contents
• Capital reserves for exterior paint, decks, dune protection, and guest wear-and-tear

Build a conservative pro forma that includes a reserve for storm-related repairs and unexpected downtime.

Management options

You can self-manage, hire a full-service manager, or choose a hybrid approach. Self-management can reduce fees but requires strong systems for guest communications, turnovers, and 24/7 response. Professional managers handle marketing, guest support, cleaning coordination, maintenance calls, and compliance reminders, which can be ideal for remote owners or high-volume calendars. A hybrid model gives you control of messaging while outsourcing operations such as cleaning and emergency response.

Financing and insurance tips

Lenders often use stricter underwriting for investment properties and for homes in higher-risk flood or wind zones. If you are relying on rental income to qualify, gather documented earnings such as platform statements and bank deposits from the seller. Shop insurance early to confirm coverage availability and pricing for STR operations, including wind and flood. Bring quotes to your lender so your debt-to-income and reserve requirements reflect true carrying costs.

Buyer due diligence checklist

Regulatory and title

• Confirm current STR permit and business license requirements with the City of Folly Beach
• Verify zoning, overlay districts, and any STR caps or moratoria
• Request copies of existing STR permits and confirm if they transfer upon sale
• Obtain HOA declarations, bylaws, and rental policies

Physical and insurance

• Check FEMA flood maps and request any elevation certificates
• Get wind, flood, and liability insurance quotes for STR use
• Confirm sewer or septic and capacity for planned occupancy
• Inspect roof, structure, decks, HVAC, electrical, GFCI, and life safety systems

Operational and financial

• Request P&L, booking calendars, reviews, ADR, occupancy, and recent capital expenses
• Verify property taxes, utility averages, HOA dues, and current vendor agreements
• Confirm off-street parking count and local parking rules for guests
• Check code enforcement history and neighborhood complaint records

Transaction safeguards

• Include a contingency to confirm STR eligibility and obtain insurance and revenue quotes
• Consider escrow holdbacks to resolve code or HOA compliance items discovered during closing

Smart ways to protect returns

• Document house rules that mirror city standards for parking, occupancy, trash, and quiet hours
• Install smart home monitors for noise, water, and HVAC to reduce damage risks
• Schedule annual safety checks for alarms, fire extinguishers, and GFCI outlets
• Keep a reserve fund for storm prep and post-storm repairs
• Maintain clear check-in instructions and parking guidance for guests

A thoughtful plan lets you deliver a great guest experience and stay compliant, which is the foundation for stable occupancy and five-star reviews. If you want help identifying properties that align with your revenue goals and navigating permits, insurance, and management, schedule a private consultation with Gus Bright.

FAQs

Can I legally operate a short-term rental at a specific Folly Beach address?

• Verify eligibility with the City of Folly Beach planning and zoning office and confirm any HOA restrictions for the property.

Do Folly Beach short-term rental permits transfer when I buy an existing STR?

• Request the current permit from the seller and ask the city whether permits transfer or require reapplication and inspection at closing.

What taxes apply to a Folly Beach short-term rental?

• Expect state sales tax plus local accommodations or hospitality taxes; register and confirm filing schedules with the South Carolina Department of Revenue and Charleston County.

How does flood risk affect Folly Beach ownership costs?

• Many areas lie in FEMA flood zones, which can increase insurance costs and lender requirements; obtain flood and wind quotes early in due diligence.

Should I hire a property manager for a Folly Beach STR?

• Professional management can boost guest experience and compliance for remote owners, while self-management can work if you have reliable systems and local support.

What occupancy and parking rules will affect my guests on Folly Beach?

• The city sets occupancy limits and enforces strict parking rules; confirm current standards and ensure your listing and house rules match what is allowed at the property.