Carolina Beach Rental ROI and Kure Beach Investment Guide

Thinking about buying a beach place you can also rent out? In Carolina Beach and Kure Beach, the right short-term rental can fund a big part of your ownership costs, but only if you model it carefully. You need a clear view of summer-driven demand, real operating costs, and the rules that can impact your bottom line. This guide walks you through how to forecast revenue, expenses, and ROI so you can make a confident decision. Let’s dive in.

Market snapshot and seasonality

Carolina Beach and Kure Beach (New Hanover County, NC) are family-focused coastal towns with strong summer vacation demand. Many guests book weekly summer stays, especially for single-family beachfront homes.

Peak season typically runs from late May through early September. Weekly Saturday-to-Saturday bookings are common, and prime weeks often fill first. The majority of your annual revenue will likely come from this window.

Shoulder seasons in April to May and September to October can be productive. Weekend and extended-stay demand often remains strong, especially around events and holidays. Winter months from November through March usually see lower occupancy and shorter bookings.

The key takeaway: build your forecast by month. Summer drives revenue, shoulders add lift, and winter establishes your baseline.

How to forecast revenue

Define your property tier

Your price and occupancy potential will be shaped by location, size, and amenities. Sort your target property into a tier:

• Premium oceanfront single-family (4+ bedrooms): highest ADRs, weekly minimums in peak.
• Near-beach single-family (2–4 bedrooms): strong summer performance at lower ADRs than oceanfront.
• Condos and smaller units (1–2 bedrooms): lower top-end ADRs but more resilient in the off-season with shorter stays.

Also note amenities that move the needle: parking, outdoor space, pet policy, elevator, pool, and walkability.

Price by season, not annually

Set an Average Daily Rate (ADR) by month or by season. Peak summer ADRs are higher. Shoulder-season rates can stay healthy on weekends. Winter ADRs typically reset lower to keep bookings flowing.

If you enforce weekly minimums in peak, you can often hold stronger ADRs. Just remember that weekly rules limit the ability to fill partial-week gaps. Model both weekly and shorter minimum-stay scenarios to see which wins.

Model occupancy by month

Avoid a single annual occupancy number. Build a monthly profile instead. Expect near-capacity during prime summer weeks for competitive properties, a step-down in the shoulders, and a low baseline in winter.

Use local comparable calendars and event schedules to shape your curve. Focus on holiday weekends, festivals, fishing tournaments, and university calendars that can boost demand.

Account for add-on revenue

Include guest-paid extras in your gross revenue assumption, and expense the owner-paid portion:

• Cleaning and linens: cleaning is guest-paid, but you should still record the actual cleaning expense in your pro forma.
• Pet fees, early check-in, late check-out, and extra-person fees: treat as ancillary revenue with matching costs where relevant.
• Owner-use weeks: mark these as blocked and remove from rent-available nights.

Costs that shape ROI

Management and platform fees

Full-service coastal managers often charge between 20% and 30% of rental revenue for marketing, bookings, guest service, and on-site coordination. If you self-manage, include software, advertising, and the value of your time. Also include platform fees. Many Airbnb host fees are about 3% for hosts, while Vrbo varies.

Turnover and linens

Cleaning costs scale with bedroom count and pet policy. Most owners pass cleaning fees to guests, but you should still enter the real cleaning expense in your model. If you provide linens and laundry, estimate either a per-stay cost or a monthly program fee.

Utilities and supplies

Short-term rentals tend to use more water, electric, and internet than owner-occupied homes. Plan for higher monthly utilities, plus upgraded Wi‑Fi packages, streaming services, and guest supplies like toiletries and coffee.

Maintenance and reserves

Beach homes require proactive care. Many investors hold 5% to 10% of gross revenue as a maintenance and capital reserve. Account for coastal wear: deck sealing, exterior paint, HVAC tune-ups, and salt-air impact on metals and finishes.

Insurance and flood

Plan for higher premiums on the coast. You will need homeowner or landlord coverage, and possibly short-term rental liability endorsements. Properties in flood zones with federally backed mortgages require National Flood Insurance Program coverage. Private flood options exist, and wind or hurricane deductibles may be higher than inland properties.

Taxes and permits

Short-term rentals are generally subject to state sales tax and local occupancy or lodging taxes. New Hanover County collects occupancy taxes and municipalities may have their own rules. Include permit, inspection, and business license fees where required. Talk with a CPA about federal and state tax treatment of rental income and personal-use days.

HOA and condo rules

Some associations limit short-term rentals or set minimum rental periods. Others require registration. Budget HOA dues and confirm rules before you model revenue.

Local rules and risk checks

Each town sets its own standards. Carolina Beach and Kure Beach may have different registration requirements, safety inspections, occupancy limits, parking rules, noise policies, and enforcement practices. Confirm the current ordinance on each town’s official site or with the planning department.

Plan for storm and evacuation risk. Cancellations and downtime can reduce revenue in hurricane season. Review FEMA flood maps, speak with an insurance broker about wind and flood coverage, and build a contingency reserve for storm-related repairs and potential business interruption.

Pro forma steps and metrics

9-step pro forma

1. Define the property profile and tier.

2. Set monthly ADR assumptions by season.

3. Set monthly occupancy percentages.

4. Compute gross rental revenue: ADR times occupied nights, summed by month.

5. Add ancillary revenue: cleaning fees collected, pet or extra-person fees.

6. Subtract variable expenses: cleaning expense per turnover, platform fees, management commissions.

7. Subtract fixed expenses: utilities, insurance, property taxes, HOA, maintenance reserve, permits, supplies.

8. Calculate Net Operating Income (NOI), then subtract debt service to find annual cash flow.

9. Compute ROI metrics: cap rate, cash-on-cash return, net margin, and payback period.

Key ROI metrics

• Gross Rental Yield: gross rental revenue divided by purchase price.
• Net Operating Income: gross revenue minus operating expenses, excluding debt service.
• Cap Rate: NOI divided by purchase price.
• Cash-on-Cash Return: annual cash flow after debt service divided by total cash invested.
• Break-even Occupancy: fixed costs plus debt service and target profit, divided by average ADR.

Stress test scenarios

Run at least three sensitivity checks to understand risk and upside:

• ADR change: plus or minus 10% to 20%.
• Occupancy change: plus or minus 10% to 20%.
• Insurance or utilities increase: plus 10% to 50%.
• Added regulatory costs: permits, inspections, or required vacancy periods.

Break-even and owner use

If you plan to use the home, block those days and measure the trade-off. Many owners enjoy using off-season weeks while renting summer at peak. Compare a lifestyle-first plan to a commercial plan to see how owner use affects cash flow.

Property selection tips

What drives performance

Rank these factors when comparing options:

1. Proximity and access to the beach.

2. Bedroom count and sleeping capacity.

3. Dedicated parking and ease of access.

4. Outdoor living and family-friendly amenities.

5. Condition and recent updates.

6. HOA rules and permitability for short-term rentals.

Condo vs single-family

• Condos: lower entry price and simpler maintenance. Watch for rental limits set by the HOA. Often more resilient in shoulders and winter due to shorter-stay demand.
• Single-family homes: higher ADR potential, especially oceanfront, along with higher maintenance, insurance, and seasonality. Weekly summer bookings are common.

Example scenarios to model

3-bedroom near-beach condo

• Profile: walk-to-beach, parking for two cars, updated interiors, no pets.
• Revenue: set monthly ADR higher in summer, moderate in shoulders, baseline in winter. Aim for shorter minimums outside peak to fill calendars.
• Costs: HOA dues, moderate cleaning cost per turnover, typical utilities, insurance plus any flood if required.
• Notes: resilient weekend demand in shoulders; consider flexible minimum stays.

5-bedroom oceanfront single-family

• Profile: direct beach access, ample parking, outdoor areas, pet-friendly.
• Revenue: highest summer ADRs, often with weekly minimums. Shoulder seasons can attract larger groups for weekends.
• Costs: higher cleaning and linen expenses, larger utilities, higher insurance and flood exposure, increased maintenance reserve.
• Notes: strong peak revenue concentration; model both weekly and shorter minimums for shoulder months.

Your next steps

• Confirm town ordinances and permit steps for both Carolina Beach and Kure Beach.
• Verify HOA or condo rules and review meeting minutes for rental topics.
• Get insurance quotes for homeowners, wind or hurricane coverage, and flood.
• Pull a 12-month ADR and occupancy comp set using STR data tools or a manual sample of comparable listings.
• Request fee schedules and sample P&Ls from local property managers.
• Consult a CPA on tax treatment for mixed owner-use and fully commercial rentals.
• Build a contingency reserve for storm events and potential evacuations.

When you are ready to explore real properties and dial in a tailored model, connect with a local advisor who knows both the lifestyle and the numbers. If you want a clean, data-backed plan for your next step, reach out to Happy Clark to request a complimentary home valuation or schedule a private consultation.

FAQs

What is peak season in Carolina and Kure Beach?

• Peak season typically runs from late May through early September, with weekly bookings common and the largest share of annual revenue earned in this window.

How should I set my nightly rates for a beach rental?

• Price by month or season, not annually: higher ADRs in summer, steady weekend pricing in the shoulders, and lower winter rates to keep bookings moving.

What management fees should I expect in these towns?

• Many coastal managers charge between 20% and 30% of rental revenue for full-service management, plus platform fees and any third-party software if you self-manage.

How do cleaning fees impact my ROI model?

• Guests usually pay a cleaning fee, but you should still enter the real cleaning expense per turnover on the expense side to calculate true net income.

Do I need flood insurance for a Carolina Beach or Kure Beach STR?

• If the property is in a flood zone and has a federally backed mortgage, flood insurance is typically required; coastal homes may also have wind or hurricane deductibles.

What taxes apply to short-term rentals in New Hanover County?

• Expect state sales tax and county or municipal occupancy taxes on short stays, plus any required permits or licenses; verify current rates and filing procedures with local tax authorities.