Short-Term Rental Rules in Folly Beach, SC: 2026 Owner Guide

Folly Beach has everything that makes a vacation rental destination stand out: the beach, a distinct local personality, easy access to downtown Charleston, and steady demand from visitors seeking a true Lowcountry getaway.

But owning property on Folly doesn’t automatically mean you can operate it as a short-term rental.

The City of Folly Beach has specific licensing requirements for vacation rentals, including separate rules for owner-occupied and investment properties. For current owners and prospective buyers, understanding those requirements is an important part of evaluating a property’s rental potential.

For Folly Beach owners, strong performance starts with understanding the property, the market, and how the two fit together. Curated Vacation Properties brings local hospitality experience and data-backed revenue strategy to every home we manage.

Folly Beach Short-Term Rental License Types

The City of Folly Beach separates rental properties into several categories based on ownership, tax classification, and length of stay. (City of Folly Beach)

Owner-Occupied Short-Term Rental (OSTR)

An owner-occupied short-term rental is associated with a property receiving the 4% owner-occupied property tax rate and allows stays of 29 days or fewer. (City of Folly Beach)

OSTR license holders are limited to renting the property for 72 days each year. The city also notes that Charleston County may revoke the property’s 4% tax status if it is rented for more than 72 days, so owners should confirm tax implications with Charleston County based on the property’s specific use. (City of Folly Beach)

Investor Short-Term Rental (ISTR)

An investor short-term rental applies to properties at the 6% property tax rate that are rented for 29 days or fewer.

Unlike owner-occupied rentals, there is no annual limit on rental nights for an ISTR itself. However, the number of available investor licenses has been limited under Folly Beach’s STR licensing framework. (City of Folly Beach)

Provisional Short-Term Rental (PSTR)

A provisional license may allow certain existing vacation rental reservations to be honored after the sale of a property.

This is a temporary option designed around qualifying existing reservations and does not mean the previous owner’s permanent STR license transfers to the buyer. The city states that a provisional STR license may be issued for up to 90 days for qualifying contracts under the South Carolina Vacation Rental Act. (City of Folly Beach)

Long-Term Rental (LTR)

A long-term rental license applies to stays of 30 days or more and does not authorize short-term vacation rentals. (City of Folly Beach)

The Folly Beach 800-License Cap

Folly Beach voters approved a cap of 800 Investor Short-Term Rental licenses in 2023. Owner-occupied STR licenses are not included in that numerical cap. (City of Folly Beach)

When investor licenses become available, Folly Beach uses a waitlist system to determine who may apply. (City of Folly Beach – STR Waitlist)

There is currently an important legal issue surrounding that cap. In August 2026, a Charleston County circuit judge ruled against the voter-approved investor cap. Folly Beach City Council subsequently voted to appeal the decision. (Live 5 News)

As of August 2026, owners and buyers should verify the current status of the cap, waitlist, and availability of new licenses directly with the City of Folly Beach before making a purchase or rental decision.

For a prospective investment-property owner, this is especially important. Never assume that buying a property previously operated as a vacation rental guarantees the ability to continue operating it as one.

How the Folly Beach STR Waitlist Works

When Investor STR licenses are unavailable because of the cap, prospective operators may need to use the city’s waitlist.

Some of the key requirements include:

• Applicants must own the property when applying.
• Ownership documentation is required.
• The city uses separate waitlist phases when awarding available licenses.
• An applicant may list multiple properties but is limited to one license under the city’s stated rules.
• Selling a property or failing to complete required steps can affect waitlist status.
• Being on the waitlist does not guarantee that a license will become available.

(City of Folly Beach – STR Waitlist)

Because license availability and current regulations can change, owners should check directly with Folly Beach before purchasing a property with plans to operate it as an STR.

Folly Beach STR Renewal Requirements

Short-term rental licenses and related business licenses must be renewed according to the city’s annual requirements. (City of Folly Beach)

Folly Beach also requires qualifying rentals to demonstrate at least 28 rented nights during the previous year to maintain a rental license. (City of Folly Beach)

Renewal documentation may include items such as rental-night records, accommodations-tax reporting, ownership information, bedroom records, septic information, and prior-year revenue. (City of Folly Beach)

Most importantly, STR licenses do not transfer when a property sells. The city states that all new owners must apply for a new license. (City of Folly Beach)

Other Folly Beach Vacation Rental Rules

Operating a vacation rental on Folly Beach involves more than obtaining a license. Owners also need to comply with local requirements involving:

• Approved bedroom count and occupancy
• Parking
• Septic capacity
• Trash and roll-cart requirements
• Noise and nuisance rules
• Local contact requirements
• Event restrictions
• Accurate advertising and license information

(City of Folly Beach Code of Ordinances)

Your property’s approved occupancy and bedroom count should come from the city’s records rather than simply matching what could physically fit inside the home. The city’s code generally limits overnight occupancy to two people per bedroom plus two additional people per rental dwelling, subject to applicable exceptions and approvals. (City of Folly Beach Code of Ordinances)

Before Buying a Folly Beach Vacation Rental

If you’re considering a Folly Beach property specifically for vacation rental income, confirm its legal rental path before relying on projected revenue.

Before purchasing, determine:

• What type of STR license the property currently has
• Whether that license will remain valid after the sale
• Whether you qualify for an OSTR or ISTR license
• The current status of the 800-license cap and waitlist
• Whether the property meets bedroom, parking, occupancy, and septic requirements
• Whether existing reservations qualify for provisional licensing
• Whether the property has met applicable annual rental and renewal requirements

Once those questions are answered, you can evaluate the property based on its actual vacation rental potential rather than assumptions.

Is Folly Beach a Good Market for a Short-Term Rental Investment?

Folly Beach has the kind of personality that keeps visitors coming back. Its beachfront setting, laid-back atmosphere, and easy access to Charleston have made vacation rentals a natural part of the island for years.

For buyers, the opportunity comes with an important consideration: licensing. Investor STRs have operated under the city’s 800-license framework and waitlist system, and the cap is currently involved in an active legal challenge. (City of Folly Beach; City of Folly Beach – STR Waitlist)

A Folly Beach property with a clear path to legal STR use can be well positioned in an established vacation market. The key is confirming that path first, then looking at the property’s demand, seasonality, expenses, and revenue potential as a complete picture.