Investment Article · Folly Beach, SC

Short-Term Rental Rules & Investment Potential in Folly Beach, SC

Folly Beach has one of the more restrictive, and more closely watched, short-term rental frameworks in the Charleston area — a hard cap on the number of licenses the city will issue.

A Voter-Approved License Cap

Folly Beach voters approved a cap on the total number of short-term rental licenses the city will issue, reducing the number below the count of rentals that had been operating beforehand. A South Carolina appeals court has upheld the cap as a business-licensing matter, though further appellate review is possible — confirm the current legal status of the cap directly with the City of Folly Beach before assuming it will hold in its present form.

An Existing License Is Now a Real Asset

Because new licenses are capped, an existing, transferable STR license attached to a specific property carries real, separate value from the real estate itself. Confirm whether a license is active, in good standing, and transferable with the sale before assuming a property can operate as a short-term rental after closing.

Rules Continue to Evolve

Folly Beach City Council has continued to refine the short-term rental framework, including renovation protections and changes to owner-occupancy and tax-classification requirements. Confirm the current, most up-to-date ordinance directly with the city rather than relying on rules that may have since changed.

Confirm Before You Underwrite

Given the license cap, ongoing litigation, and continued rule changes, the single most important step before underwriting a Folly Beach short-term rental purchase is confirming current license status and city rules directly, in writing, before assuming any rental income is available.

Evaluating a specific Folly Beach property? Contact Chris Eller directly, or browse more Investment Articles.