The property features Outdoor Pool, Hot Tub / Spa, Fitness Center, Beach Access, Grill / Fire Pit — amenities that support premium nightly rates, reduce vacancy, and improve guest satisfaction scores critical to Superhost/Premier Host status.
| Acquisition Cost | Amount | Notes |
|---|---|---|
| Down Payment | $106,250 | 25.0% of purchase price |
| Estimated Closing Costs | $12,750 | ~3% of purchase |
| STR Permit Fee | $250 | Annual registration |
| Initial Supplies & Setup | $1,500 | Smart lock, supplies, professional photography |
| Total Cash to Close | $120,750 |
| Amortization Detail | Value |
|---|---|
| Year 1 Interest Paid | $22,313 |
| Year 1 Principal Paid | $3,135 |
| Total Interest Over Loan Life | $444,685 |
| Loan-to-Value (LTV) | 75.0% |
| Scenario | Occupancy | Blended ADR | Gross Revenue | NOI | Net Cash Flow | CoC Return |
|---|---|---|---|---|---|---|
| Upside | 52.7% | $448 | $86,329 | $46,562 | $21,114 | 19.9% |
| Base | 44.7% | $380 | $62,000 | $33,440 | $7,992 | 7.5% |
| Downside | 32.2% | $312 | $36,605 | $19,743 | $-5,705 | -5.4% |
Base case assumes moderate dynamic pricing and seasonal optimization across Airbnb + VRBO. Upside reflects Superhost/Premier Host status and aggressive peak-season pricing. Downside models minimal optimization and a soft shoulder-season demand environment.
| Month | Est. ADR | Occupancy | Nights | Revenue | Season |
|---|---|---|---|---|---|
| January | $170 | 20% | 6 | $1,023 | Off |
| February | $177 | 22% | 6 | $1,064 | Off |
| March | $245 | 42% | 13 | $3,191 | Off |
| April | $273 | 55% | 16 | $4,363 | Shoulder |
| May | $314 | 70% | 22 | $6,899 | Peak |
| June | $426 | 88% | 26 | $11,079 | Peak |
| July | $477 | 92% | 29 | $13,840 | Peak |
| August | $416 | 85% | 26 | $10,813 | Peak |
| September | $273 | 55% | 16 | $4,363 | Shoulder |
| October | $239 | 42% | 13 | $3,102 | Off |
| November | $177 | 22% | 7 | $1,241 | Off |
| December | $170 | 20% | 6 | $1,023 | Off |
| Expense | Annual | Monthly | % of Gross | Notes |
|---|---|---|---|---|
| HOA / community fees | $7,200 | $600 | 11.6% | Pool, grounds, insurance (if included) |
| Property tax | $3,613 | $301 | 5.8% | Est. assessed value × local rate |
| Utilities (electric, water) | $3,000 | $250 | 4.8% | HVAC, water, guest usage |
| Internet / WiFi | $960 | $80 | 1.5% | High-speed required for guest satisfaction |
| Repairs & maintenance | $2,975 | $248 | 4.8% | Age-based rate; 2018-vintage property |
| Furnishing reserve | $850 | $71 | 1.4% | Annual refresh set-aside |
| Insurance | $0 | $0 | 0.0% | Coastal wind + liability |
| STR permit & license | $250 | $21 | 0.4% | Annual registration |
| Accounting / tax prep | $500 | $42 | 0.8% | STR-specific CPA |
| Miscellaneous / contingency | $500 | $42 | 0.8% | Unforeseen guest issues, supplies |
| Platform booking fees | $3,410 | $284 | 5.5% | Blended ~5.5% of gross (Airbnb 3% + VRBO 8%) |
| Cleaning & turnover | $5,303 | $442 | 8.6% | ~$130/clean × 41 turnovers/yr |
| Total Operating Expenses | $28,560 | $2,380 | 46.1% | |
| Debt service (P&I) | $25,448 | $2,121 | 41.0% | $318,750 @ 7.0% / 30-year fixed |
| Total All-In Cost | $54,008 | $4,501 | 87.1% |
| Return Component | Annual Value | % of $106,250 Equity |
|---|---|---|
| Pre-Tax Cash Flow | $7,992 | 7.5% |
| Mortgage Principal Paydown | $3,135 | 3.0% |
| Estimated Appreciation (4.0%/yr) | $17,000 | 16.0% |
| Tax Benefits (depreciation shield) | $2,967 | 2.8% |
| Total Return on Equity | $31,095 | 29.3% |
While Year 1 cash-on-cash is 7.5%, the total return profile is 29.3% when accounting for equity building via principal paydown, market appreciation, and a depreciation tax shield ($340,000 building value / 27.5 years = ~$12,364/yr deduction at a 24% bracket). The 25.0%% down payment de-risks the investment by providing a meaningful equity cushion from day one.
This 3BR condominium in Kure Beach represents a workable STR investment at $425,000, with returns that are positive but dependent on above-average execution. The 7.5% cash-on-cash return leaves limited margin for error — outperformance requires disciplined dynamic pricing, Superhost-level reviews, and active shoulder-season demand generation. The deal works; it just does not offer significant cushion against occupancy softness or rising expenses.
The base-case ADR of $380 and 44.7% occupancy represent a realistic but not conservative projection for a 3BR condominium in this segment. Achieving the upside scenario ($448 ADR / 52.7% occupancy) requires Superhost status on Airbnb, Premier Host on VRBO, professional photography, and active dynamic pricing management. The downside scenario models a year of minimal optimization or a soft demand environment, which remains a real risk in highly seasonal markets where 60%+ of revenue is earned in a 10-week window.
The Kure Beach coastal premium market benefits from constrained beachfront supply and strong repeat-visitor loyalty. Oceanfront and first-row properties command a 40–60% ADR premium over comparable inland units. Summer demand is effectively inelastic — quality properties are booked 8–12 weeks in advance through July. The primary risk is regulatory — municipalities along the NC coast have increasingly scrutinized STR permitting, and HOA restrictions continue to tighten in condo complexes built before 2010.
Dual-list on Airbnb (3% host fee) and VRBO (8% host fee). Airbnb dominates domestic leisure; VRBO captures longer-stay family groups. Both platforms are necessary to reach 60%+ occupancy. Self-management saves $12,400/yr versus a 20% property manager — a savings that substantially improves cash-on-cash return.
Local cleaning team ($130/turn recommended), smart lock, noise monitoring device (Minut or NoiseAware), dynamic pricing tool (PriceLabs or Wheelhouse), professional photography, and guest automation software (Hospitable or Hostfully).
Dynamic pricing with weekly updates, 3-night minimums during peak summer weekends, 7-night minimums during holiday weeks, seasonal pricing uplift of 40–60% in June–August, and Superhost targeting via response rate and review management.
Occupancy tax: NC state sales tax (6.75%) plus local county occupancy tax (varies 3–8%). Major platforms (Airbnb, VRBO) collect and remit automatically in NC — confirm coverage for your county before listing.
Property tax: Estimated $3,613/yr based on assessed value. Verify with county tax assessor — purchase price often triggers reassessment within 1–2 years.
Income tax: Report on Schedule E (if personal use <15 days/year) or Schedule C (pure investment). Consult a CPA to determine optimal treatment.
Depreciation: Building value ~$340,000 / 27.5 years = ~$12,364/yr federal deduction. NC conforms to federal depreciation rules.
14-day rule: Personal use exceeding 14 days or 10% of rented days converts property to mixed-use and limits expense deductions. Track personal use rigorously.
1031 exchange: Fully eligible as US investment property. Consult a Qualified Intermediary before listing for sale.
Recommended team: (1) STR-experienced local real estate attorney for HOA/title review; (2) CPA familiar with STR Schedule E; (3) Fee-only fiduciary financial planner (NAPFA).
| Requirement | Action Needed |
|---|---|
| STR Registration | Apply with local planning department |
| Safety Inspection | Schedule before first guest |
| Emergency Info | Post in unit per local requirements |
| Local Contact | Designate 24/7 emergency contact |
| HOA Review | Verify STRs permitted in CC&Rs |
| Liability Insurance | Consider supplemental STR liability coverage |
| Metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Gross Revenue | $62,000 | $63,860 | $65,776 | $67,749 | $69,782 |
| Platform Fees | ($3,410) | ($3,512) | ($3,618) | ($3,726) | ($3,838) |
| Cleaning | ($5,303) | ($5,462) | ($5,626) | ($5,794) | ($5,968) |
| Net Rental Revenue | $53,287 | $54,886 | $56,533 | $58,229 | $59,975 |
| Operating Expenses | ($19,848) | ($20,443) | ($21,056) | ($21,688) | ($22,339) |
| NOI | $33,440 | $34,443 | $35,476 | $36,541 | $37,637 |
| Debt Service | ($25,448) | ($25,448) | ($25,448) | ($25,448) | ($25,448) |
| Pre-Tax Cash Flow | $7,992 | $8,995 | $10,029 | $11,093 | $12,189 |
| Cumulative Cash Flow | $7,992 | $16,987 | $27,016 | $38,109 | $50,298 |
| Property Value | $442,000 | $459,680 | $478,067 | $497,190 | $517,077 |
| Loan Balance | $315,615 | $312,260 | $308,670 | $304,829 | $300,720 |
| Total Equity | $126,385 | $147,420 | $169,397 | $192,361 | $216,358 |
| Cash-on-Cash Return | 7.5% | 8.5% | 9.4% | 10.4% | 11.5% |