Ever wished you could own a beachfront place and also have it managed like a hotel when you are not there? In North Myrtle Beach, that model exists, and it is called a condotel. If you are weighing lifestyle time at the coast with potential rental income, understanding how condotels work will help you make smart decisions.
In this guide, you will learn what a condotel is, how the rental programs operate, the fees and taxes to expect, and the financing and insurance details that matter on the Grand Strand. You will also get a clear due diligence checklist tailored to North Myrtle Beach so you can move forward with confidence. Let’s dive in.
Condotel basics
What a condotel is
A condotel is a condominium unit that operates like a hotel room. You own the unit, and you also share in the building’s common areas. Many condotels offer a rental pool so you can place your unit into short-term rentals when you are not using it. The on-site manager typically handles bookings, housekeeping, and guest services in exchange for fees or a revenue split.
How daily operations work
Most condotels feature hotel-style amenities such as a staffed front desk, pools, fitness rooms, or on-site dining. A master insurance policy usually covers the structure and common areas. You carry an HO-6 policy for your unit’s interior and contents. Monthly HOA fees often include utilities, staffing, and building maintenance, which is why they tend to be higher than a typical residential condo.
How condotels differ
Versus a traditional condo
- Short-term rentals are common and often centralized through a rental program.
- HOA fees may include hotel-like services and utilities.
- Your revenue potential depends on seasonality, unit features, and the property’s rental program.
Versus a hotel
- You own the unit rather than a hotel owning the inventory.
- Income and costs are shared across owners and the manager by agreement.
- Resale happens in an owner-driven market, not through a hotel brand’s allocation.
Rules and permits in North Myrtle Beach
Short-term rental licensing and zoning
Short-term rental activity is regulated at the city and county level. In North Myrtle Beach, confirm whether the building’s zoning allows transient lodging and whether you need a business or rental license for short-term rentals. Requirements can change, so verify current rules with the City of North Myrtle Beach and Horry County before you buy.
Taxes and remittance
If your unit rents short-term, lodging taxes typically apply. In South Carolina, that can include state sales tax and accommodations taxes, with local components managed at the city and county level. Many condotel managers collect and remit these taxes on your behalf, but you should confirm exactly who files, how often, and how compliance is documented.
Association documents and owner rights
Condotels are governed by the recorded condominium declaration and bylaws. These documents set rules for rentals, owner use, assessments, and any rental pool requirements. Ask for the current CC&Rs, rental program agreements, and any addenda so you understand owner-use limits, blackout dates, and termination options for management contracts.
Financing and insurance realities
Mortgage options and eligibility
Lenders often view condotels as non-warrantable or higher risk than standard condos. That can limit access to certain conforming, FHA, or VA loans, and it can raise down payment requirements. Work with lenders experienced in condotels so you know your options and the project’s eligibility before making an offer.
Insurance layers and flood considerations
Expect two layers of coverage: the association’s master policy and your HO-6 policy for interiors, contents, loss assessment, and liability. Review the master policy carefully to understand what is covered, what is not, and the deductible exposure. Many coastal properties require flood insurance if they are in a FEMA flood zone, so check maps and request quotes early.
Income, expenses, and seasonality
Revenue drivers on the Grand Strand
Rental performance in North Myrtle Beach is seasonal. Peak occupancy and average daily rates tend to arrive in late spring and summer, with holidays also performing well. Unit size, oceanfront location, building quality, and the effectiveness of the rental program all influence annual returns.
Costs to watch
- HOA fees: Often higher due to utilities, staffing, and reserves.
- Management fees: Can include marketing, distribution, housekeeping per stay, and a revenue split.
- Capital projects: Coastal exposure increases maintenance needs, from exterior updates to roof replacements.
- Taxes and accounting: Rental income is taxable; coordinate with a qualified tax advisor for depreciation and deductions.
Exit and resale factors
Resale values can depend on the manager’s reputation, HOA fee levels, reserve strength, and local short-term rental demand. Compare recent sales in the same building and nearby condotels, and study the rental history to understand buyer expectations.
Buyer due diligence checklist
Request these documents
- Condominium declaration, bylaws, and association rules
- Current HOA budget, financials, and the latest reserve study
- HOA board meeting minutes for the past 12 to 24 months
- Property management and rental pool agreements, including fees and termination terms
- Unit-level rental income and expense history, plus property performance for the past 2 to 3 years
- Any occupancy, ADR, or RevPAR statistics available from the manager
- Master insurance policy summary and owner HO-6 requirements
- Records of any special assessments and planned capital projects
- Litigation disclosures and engineering or inspection reports for building systems
- Zoning and permit documentation supporting transient lodging use
- Recent property tax bills and unit tax records
Ask these questions
- Is the unit in the rental pool, and what is the revenue split and fee schedule?
- Who collects and remits lodging and sales taxes, and how is compliance documented?
- Can owners opt out of the rental pool? Are there owner-use limits or blackout dates?
- What are per-stay housekeeping and linen costs, plus any concierge or resort fees?
- What is the association’s reserve funding relative to recommended levels?
- Has the HOA imposed special assessments recently, or are major projects planned?
- Is the project considered warrantable or non-warrantable by common lenders?
Watch for red flags
- Long, exclusive management agreements that limit owner rights
- Low reserves or frequent special assessments
- Pending litigation involving the association or developer
- Unclear tax remittance procedures
- Deferred maintenance or negative engineering reports
Who condotels fit
Second-home buyers
You want turnkey convenience with the option to offset costs through rentals. An on-site team handles bookings and housekeeping so you can focus on beach time.
Investors focused on STRs
You prefer professional marketing, centralized reservations, and transparent reporting. Seasonality and building quality drive returns, so data access matters.
Remote and seasonal owners
You need streamlined service, digital access, and predictable operations. A well-run condotel with strong reserves and a clear rental program can simplify ownership from a distance.
Pro tips for North Myrtle Beach sellers
Present the right data
Provide verified rental statements for the past 2 to 3 years, including occupancy and average daily rates. Buyers will want to see how peak summer and shoulder seasons perform.
Clarify fees and coverage
Spell out what HOA fees include, from utilities to staffing and reserves. Share a summary of the master insurance policy so buyers understand owner responsibilities.
Highlight improvements
Detail recent updates and capital projects that support guest appeal and reduce near-term maintenance risk. This builds confidence and can support stronger pricing.
Next steps
Buying or selling a condotel in North Myrtle Beach is part real estate and part hospitality. When you align the right building, rental program, and financing, you can enjoy the beach and achieve a clear financial plan. If you want tailored guidance, market comps, and remote-ready tours, connect with Angela Bohnaker for a concierge experience on the Grand Strand.
FAQs
What is a condotel in North Myrtle Beach?
- A condotel is a condo unit that operates like a hotel, with optional short-term rentals managed by an on-site or third-party operator.
How do condotel rental programs work for owners?
- You can place your unit in a rental pool where the manager handles bookings and housekeeping in exchange for fees or a revenue split.
Are HOA fees higher in condotels than condos?
- Typically yes, because fees often include utilities, staffing, amenities, and building operations common to hotel-style properties.
What taxes apply to short-term rentals in North Myrtle Beach?
- Short-term rentals usually require sales and accommodations tax remittance at state and local levels; confirm responsibilities with the manager and local authorities.
Is condotel financing harder to obtain than a condo loan?
- Often yes; many lenders treat condotels as non-warrantable, which can raise down payments and limit FHA or VA options.
What insurance do condotel owners need?
- The association carries a master policy for the structure and common areas. You typically need an HO-6 policy for interiors, contents, liability, and loss assessment.
Can I use my condotel unit anytime I want?
- It depends on the condominium documents and rental program. Some properties set owner-use rules or blackout dates, so review those before you buy.
