Raised beach cottage with a wraparound porch and a dune walkover at sunset, How to Start an Airbnb in Folly Beach, Isle of Palms or Sullivan's Island

How to Start an Airbnb in Folly Beach, Isle of Palms or Sullivan's Island

How to Start an Airbnb in Folly Beach, Isle of Palms or Sullivan's Island

Starting a short-term rental on Folly Beach, Isle of Palms or Sullivan's Island works differently than in most of South Carolina. There is no statewide rule that decides whether you can rent a house by the night. Each beach town licenses or restricts short-term rentals (STRs) on its own terms, and those rules have been changing. Get the town's answer first, then build the business, tax and property steps around it.

This guide covers the steps in the order that protects your money: confirm the local rules, set up the business, register for taxes, check your insurance and HOA documents, and prepare the property. It also covers the Folly Beach short term rental permit situation, which is unsettled right now, and what to expect in Isle of Palms and Sullivan's Island.

This article is informational content, not legal or tax advice. Zoning, short-term rental and tax rules change, and the towns and state agencies named here make the final decisions. Before you buy property, sign a lease or set up an ownership structure, talk with a South Carolina attorney and a certified public accountant (CPA).

What You Need Before You Start

Gather these items before you file anything or call a town office. Most delays happen because one of them is missing.

  • The property address and proof that you own it, or written permission from the owner (a lease that allows subletting, or an owner consent letter)
  • Your HOA rules, condo declaration or deed restrictions, if the property is in an association
  • A business name that meets South Carolina naming rules. An LLC name must include the words limited liability company or limited company, or an abbreviation such as LLC or LC
  • $110 for Articles of Organization if you form a domestic LLC through the Secretary of State
  • A registered agent with a South Carolina street address
  • A federal Employer Identification Number (EIN) from the IRS, which is free to obtain
  • A South Carolina Department of Revenue (SCDOR) account through the Business Tax Application on MyDORWAY
  • Written quotes for short-term rental liability insurance
  • A list of the safety items your town inspector requires, such as smoke and carbon monoxide detectors and fire extinguishers

Step-by-Step: Starting Your Airbnb

  1. Confirm your town allows the rental. Call or visit the zoning or planning office and the business license office for the town where the property sits. Ask whether an STR business license is required, whether a separate short-term rental permit applies, whether occupancy limits apply, whether the property's zoning allows STRs, and whether new licenses are open or on a waitlist. Ask for the answers in writing. Do this before you form a company, buy furniture or pay for photography.
  2. Choose a business structure. A sole proprietorship needs no organizing filing with the Secretary of State, so you can start it by getting the local license and tax registrations. An LLC is the most common choice for a rental because it separates the rental business from your personal assets. Form it through Business Entities Online at businessfilings.sc.gov, where the filing fee is $110 and documents are returned within 24 to 48 business hours. Mailed and in-person filings take longer. The Secretary of State does not offer a separate expedite fee. Corporations also file a $110 fee, plus a one-time $25 initial License Fee on Form CL-1 within 60 days of doing business in South Carolina. This is general information, so have a CPA confirm which structure fits your situation.
  3. Name the LLC and appoint a registered agent. Search the business records at businessfilings.sc.gov before you pick a name. The name must be distinguishable from other registered names. If you want to reserve the name while you finish paperwork, a name reservation costs $25 and lasts 120 days, with no renewal. Under South Carolina law, every LLC must designate a registered agent with a street address in the state. The agent can be a South Carolina resident, a domestic corporation or another LLC, or an authorized foreign entity. The agent's name and address must appear on the formation document. If you change agents later, file a statement of change with the Secretary of State.
  4. Get an EIN and record your trade name locally. South Carolina has no state DBA filing. The Secretary of State does not register DBAs or trade names. If you operate under a brand name instead of your LLC's legal name, list it on your town business license; there is no separate county or municipal DBA filing. List the trade name on your IRS EIN application and on the SCDOR Business Tax Application. Use the same name on your listing, bank account and insurance policy.
  5. Apply for the town business license. South Carolina has no general statewide business license, and a Secretary of State filing is not a business license. The town is the agency that matters here. Isle of Palms requires an STR business license for any rental. Folly Beach and Sullivan's Island also run their own license processes, so confirm each requirement with the town before you accept a booking. Charleston County is one of nine South Carolina counties that levy a local business license tax, but the county license covers only unincorporated areas, and these three are incorporated towns, so the town is your licensing office. South Carolina local business licenses run on a May 1 to April 30 license year, with renewals due April 30 through localblrenewal.com. Ask your town whether its STR license follows a separate cycle.
  6. Register for state and local lodging taxes. Register through the SCDOR Business Tax Application on MyDORWAY. Short-term stays are generally subject to the state 7% accommodations tax, plus any local accommodations tax the town levies. Confirm both rates and how to remit them with the SCDOR and your town. Booking platforms may collect some taxes for you in some places, but do not assume they collect all of them. A standard SCDOR Retail License ($50 per location) is for sellers of tangible goods, so it generally is not needed just for renting a home. Confirm that with the SCDOR if you also sell merchandise or other goods.
  7. Verify insurance, HOA and lender rules. Many standard homeowners policies exclude or limit rental activity. Ask your insurer in writing whether the policy covers short-term rental guests, and get quotes for a policy written for short-term rentals. If the property is in a condo or HOA, read the declaration and rules. An association can prohibit STRs or set minimum stay lengths even when the town allows them. If you have a mortgage, check whether your loan terms restrict rental use.
  8. Prepare the property to the town's standards. Build your setup around the ordinance, not the other way around. Confirm the maximum occupancy, parking requirements, safety equipment and any inspection the town requires before you list. Photograph the property, keep receipts for improvements, and save the inspection report. Those records help if a neighbor complaint or a license renewal question comes up.
  9. Build the listing around your license. Put your license number on the listing if the town requires it. Set the guest count to match the occupancy limit on your license, not the number of beds in the house. Describe parking, quiet hours and trash pickup accurately. If your listing promises something the property cannot legally provide, you carry the risk.
  10. Calendar your renewals and watch for rule changes. Add every license and tax deadline to a shared calendar, including the April 30 renewal cycle if it applies to you. Subscribe to the town's council agendas or newsletter. Beach town STR rules change often, and a rule change can affect a license you already hold.

Folly Beach Short Term Rental Permit: What Is Happening Now

Folly Beach has the most unsettled situation of the three towns. As of October 2026, a judge voided the voter-approved cap of 800 STR licenses and the income-based STR fee on August 14, 2026. The city is appealing that ruling. In the meantime, the city has paused new STR licenses and keeps a waitlist, and it is rewriting its short-term rental ordinance. A city study on the issue is expected around the end of the year.

That means you cannot assume you will get an Airbnb Folly Beach license just because you meet the basic requirements. Before you buy property or sign a lease, ask the city in writing whether the address can receive a license, how the waitlist works, what happens to waitlisted applicants if the appeal succeeds or fails, and whether the new ordinance could change the fee or the license count. If you are buying, make the purchase contingent on your ability to obtain the license you need, and have a real estate attorney review that contingency.

Isle of Palms Short Term Rental Permit Requirements

Isle of Palms requires an STR business license for any rental. Treat that as a precondition, not a formality. Do not accept a booking until the license is issued. The town's ordinance also sets occupancy limits, so the number of guests you can accept depends on the ordinance, not on how many beds the house has. Ask the town for the current occupancy formula, how it counts children and whether there are separate limits for a bedroom, a parking space or a rental period. These are the details that most often cause a license problem after purchase.

If you are shopping for an Isle of Palms short term rental permit, confirm the zoning for the specific address. Some properties may be in areas where the rules differ, and a neighboring home's permit does not transfer to your property.

Sullivan's Island Short Term Rental Rules

Sullivan's Island tightly restricts short-term rentals. Plan on the town's answer being the deciding factor, and do not assume a property has permission to operate as a rental because it was rented in the past. Ask the town whether the property has an existing approved use, whether a Sullivan's Island short term rental is allowed at the address, and what documents prove that status. Get the answer before you sign a purchase agreement or a lease, and keep a copy of the written response with your records.

Common Mistakes to Avoid

  • Buying before checking the town. A purchase that depends on a license you cannot get is the most expensive mistake in this process.
  • Treating a county rule as the answer. Charleston County levies a business license tax in some areas, but the three beach towns license STRs themselves. Ask the town first.
  • Confusing a Secretary of State filing with a license. An LLC filing creates your legal entity. It does not give you permission to rent.
  • Skipping lodging tax registration. Guests pay the tax at checkout, but you are responsible for registering and remitting it correctly.
  • Relying on a homeowners policy. A policy that excludes rental activity may leave you without coverage when a guest is injured.
  • Setting occupancy by bed count. Your listing must match the ordinance limit, or you risk fines and a license problem.
  • Ignoring the HOA. An association rule can override a town approval.
  • Missing renewals. A lapsed license can stop your bookings. Put the due date on a calendar with reminders.

What to Expect From an Airbnb Business

A licensed, properly structured rental may help you earn income from a property you already own or plan to buy, but results depend on many factors you do not control. Location, season, occupancy limits, insurance costs, cleaning and maintenance, and the amount of time you can spend managing guests all affect the outcome. Some owners find that the first year is slower because listings take time to gather reviews. Others find that restrictions in their town limit what they can earn. Build your budget with conservative assumptions, and have a CPA review the projected numbers before you commit.

Where to Confirm Each Requirement

Start with the town, not the state. Once you have the town's written answer on licensing, occupancy and zoning, the state steps are straightforward: form the entity, record the trade name, register for taxes and buy the right insurance. If anything in the town's answer conflicts with your plans, stop and ask a South Carolina attorney before you spend money. This article is informational, not legal or tax advice, and the agencies named above have the final say on every requirement.

Keep exploring: related South Carolina guides