Trying to decide between a condotel and a condo in Myrtle Beach? You are not alone. If you want beach time, rental income, or both, the rules, fees, and financing can look confusing at first glance. This guide breaks down the differences in plain language so you can match the right property type to your goals. Let’s dive in.
Condotel vs. condo at a glance
| Feature | Condotel | Conventional Condo |
|---|---|---|
| Typical setting | Resort or hotel property with on‑site staff and amenities | Residential building or complex, amenities vary |
| Rental control | Often limited by a rental program and building rules | Generally higher owner control per HOA rules |
| Booking & marketing | Central hotel-style reservation system | Owner or a hired manager handles bookings |
| On‑site services | Front desk, housekeeping, concierge, restaurants | Usually no daily housekeeping or front desk |
| Fees | Often higher due to resort operations and services | Often lower if fewer services |
| Insurance | May be treated partly as commercial, higher premiums possible | Typically residential master policy plus HO‑6 |
| Financing | Frequently restricted, higher down payments and rates common | Broader access to conventional, FHA, and VA if project approved |
| Taxes & remittance | Management may collect and remit occupancy taxes; confirm responsibility | Owner is responsible if renting short‑term |
| Income profile | Strong nightly rates are possible; net depends on fees and season | Potentially higher net if you self-manage, subject to HOA rules |
| Resale | Smaller buyer pool and discounted pricing common | Broader buyer pool and generally easier resale |
What is a condotel?
A condotel is a condominium unit located inside a hotel or resort property. You own your unit plus a share of common elements, but the building operates with hotel-style services and a centralized rental program. The governing documents may include rental pool agreements and management contracts that influence how you use the unit.
How condotels work in Myrtle Beach
In Myrtle Beach, condotels typically lean on a front desk and reservation system to book nightly and weekly stays. This can drive occupancy during peak seasons, especially summer and shoulder months tied to golf and conferences. In return, owners accept rules about owner stays, rental procedures, and revenue splits. Some buildings require participation in the rental program for part or all of the year.
Services and fees to expect
Most condotels include a staffed front desk, optional or daily housekeeping, and resort amenities like pools, fitness facilities, and on‑site food and beverage. These services support higher nightly rates, but they also add costs. Expect separate line items for management fees, housekeeping, marketing or reservation fees, utilities, and contributions to reserves. Insurance can be pricier because insurers may treat parts of the property as commercial.
What is a conventional condo?
A conventional condo is residential housing with an HOA that sets rules and manages common elements. Owners usually have wider control over occupancy and leasing, subject to those HOA rules. Some buildings allow short‑term rentals, while others restrict them.
How rentals work in a condo
If the HOA allows short‑term rentals, the owner or a private property manager handles marketing, guest communication, cleaning, and taxes. Because there is no hotel program, you may keep a larger share of gross rent. The trade-off is doing more work or hiring a manager to cover those tasks.
Services and costs to expect
Residential condos may have amenities like pools or clubhouses, but they rarely include a front desk or daily housekeeping. HOA fees often run lower than condotel resort fees, though costs vary by building and amenities. Insurance typically follows a residential pattern with a master policy and a standard HO‑6 for the owner’s interior and contents.
Owner usage and control
Owner usage is a key difference. Condotels can set limits on the number of owner weeks per year, restrict popular dates like holidays, and require that all bookings run through the on‑site program. A conventional condo’s rules come from the HOA, which may be more flexible for seasonal stays or long‑term leases.
Questions to ask before you buy:
- How many owner weeks are allowed each year, and are there blackout dates?
- Is participation in the rental program mandatory or optional?
- Can you market the unit on your own platform or must you use the front desk system?
- What housekeeping or resort fees apply to owner stays?
Financing reality in Myrtle Beach
Financing is often the biggest practical hurdle with condotels. Many mainstream loan programs have project eligibility requirements that hotel-like properties do not meet. When financing is available, lenders may require larger down payments and charge higher interest rates.
If you plan to finance, take these steps early:
- Obtain written preapproval from a lender experienced with condotels in the specific building you are targeting.
- Ask what project documents they need and whether the building passes their condo project review.
- If conventional programs will not work, ask about portfolio or jumbo options that may finance condotels, and compare rates and terms.
Taxes and local rules
Short‑term rental income in Myrtle Beach and Horry County is generally subject to occupancy and sales taxes. Either you or the on‑site manager must collect and remit them. Some properties or locations may also require registration or a business license. Because local rules change, verify current requirements for your specific address with the city or county before you begin renting.
From a federal tax perspective, rental income is taxable. Owners can typically deduct operating expenses, management fees, and depreciation. If you participate in a rental program, you should receive annual income reporting from the manager. Consider working with a CPA who handles short‑term rental returns.
Income and seasonality
Myrtle Beach is a strong seasonal market. Summer months usually deliver the highest occupancy and nightly rates. Spring and fall can be solid due to golf and conferences. Winter demand is lighter, so your annualized returns will reflect that seasonality.
To underwrite income, gather real numbers:
- Ask the on‑site manager or a local property manager for unit‑level occupancy, average daily rate, and net distributions.
- Review a detailed fee schedule for the rental program, including housekeeping, marketing, and any reserve contributions.
- Compare similar units in the same building and nearby properties with similar amenities and views.
Which one fits your goal?
- Second‑home first, income second: You want flexible personal use and occasional rentals. A conventional condo with permissive HOA rules often provides more control and simpler ownership.
- Investor first, resort experience second: You want plug‑and‑play bookings and on‑site staff. A condotel’s centralized marketing can keep occupancy healthy, but model your net after all fees and seasonal swings.
Due diligence checklist
Documents to request:
- Association declaration, bylaws, rules, operating budget, financials, reserve study, and recent meeting minutes
- Management and rental program agreements, including fee schedules and owner usage rules
- Unit‑level rental history: occupancy, average daily rate, gross revenue, and owner distributions
- Master insurance summary and recommended HO‑6 requirements
- Details on any pending litigation, special assessments, or major capital projects
- Condo project eligibility documentation if your lender requires it
Key questions to ask:
- Is the rental program mandatory, and how long is the management agreement?
- What is the exact revenue split and what fees are deducted before owner payouts?
- Can owners market independently or must all bookings run through the front desk?
- Who collects and remits occupancy and sales taxes, and how are payouts scheduled?
- What percentage of units are investor‑owned versus owner‑occupied?
Financing prep:
- Get preapproved with a lender who has financed your target building or similar projects.
- Confirm the building’s status on the lender’s approved list and what documentation is needed.
- Compare conventional, portfolio, and jumbo options if available.
Professional support:
- Engage a CPA experienced with short‑term rental taxation
- Consult a real estate attorney for a plain‑English review of association and management agreements
Resale and exit planning
Condotels often sell at a discount relative to conventional condos because of higher fees, rental rules, and limited financing. That can be a buying opportunity if income justifies the model, but it narrows your future buyer pool. Conventional condos usually draw a wider range of buyers, which can make resale smoother when HOA and project documentation are strong.
Next steps with a local guide
Choosing between a condotel and a condo comes down to how you want to use the property, how you plan to finance, and what net income you need for the numbers to work. If you want a clear, local take on specific buildings, documents, and lenders, connect with a Grand Strand native who reviews these projects every day. Book an appointment with The Kirk Stalvey to compare options, request the right documents, and move forward with confidence.
FAQs
What is a condotel in Myrtle Beach and how is it different from a condo?
- A condotel is a condo inside a hotel-style resort with front desk services and a centralized rental program, while a conventional condo is residential with owner-controlled leasing under HOA rules.
How does financing work for Myrtle Beach condotels?
- Many mainstream loans are limited for hotel-like projects, so expect stricter underwriting, higher down payments, and possibly portfolio or jumbo options from specialized lenders.
Are short‑term rentals allowed in Myrtle Beach condos?
- It depends on the HOA rules for the specific building and location, and you must comply with local registration and occupancy tax requirements if short‑term rentals are permitted.
What fees should I expect in a Myrtle Beach condotel rental program?
- Typical fees include a base management commission, housekeeping, marketing or reservation charges, utilities, and contributions to reserves, all deducted before owner payouts.
How are taxes handled for short‑term rental income in Myrtle Beach?
- Short‑term rentals are subject to local occupancy and sales taxes, and rental income is taxable; managers may remit some taxes, but owners remain responsible for compliance and should consult a CPA.
