In simple terms, a short-term rental (STR) is typically a property rented for fewer than 30 days at a time, most often to tourists visiting the area.
Since the pandemic, STRs have surged in popularity across the North Carolina coast, especially in vacation destinations like Wilmington, Oak Island, Southport, and Wrightsville Beach.
As more investors enter the market, creative financing options have expanded, too, and that’s changed how these properties are valued during a purchase or refinance.
Understanding these differences can help current property owners and future investors make smarter, data-driven decisions.
Let’s break it down.
What Qualifies as a Short-Term Rental in Wilmington, NC?
Under North Carolina law, a short-term rental is defined as a residential property rented for fewer than 90 days to someone with another permanent residence.
In Wilmington specifically, most short-term rentals operate under a 30-night threshold, typically booked through platforms like Airbnb and VRBO.
These properties are primarily used for vacation stays, not mid-term rentals that extend for three to six months.
Two common STR models in our area include:
- Whole-house rentals: entire property rented to guests
- Homestays: guests rent a portion of the property, such as a room or guest suite, while the owner remains on-site in their living quarters.
Wilmington’s short-term rental rules have shifted since 2022. Schroeder v City of Wilmington invalidated the city’s STR registration requirement, so owners no longer need a city-issued permit.
However, all properties must comply with local zoning, occupancy, safety, and noise ordinances enforced by Wilmington and New Hanover County.
TAG Tip: While many STR owners manage their own listing rates independently, properties financed with DSCR (Debt Service Income Ratio) loans often require an appraisal to validate the projected income and market value.
Our COO Nathan Jordan explains:
“These loans rely on real estate income performance rather than traditional income documents like W-2s or tax returns. This adds more risk to the valuation process, which is why reliable data is crucial. Our job is to ensure those income forecasts and values hold up.”
Ideal Coastal Towns for Short-Term Rentals
If you’re considering investing in a coastal short-term rental, understanding the character and demand of each local market is key.
Here is a breakdown of the top four destinations near Wilmington for rental investment potential.
City/Town
Attractions Nearby
TAG Insight
Wilmington
Riverwalk, Battleship NC, Wrightsville Beach (20 minute drive)
Year-round demand
Southport
Waterfront dining, ferry to Bald Head Island, quaint downtown area
Steady summer tourism
Oak Island
Beachfront homes, family-friendly rentals
High investor activity
Kure Beach/ Wrightsville Beach
Carolina Beach State Park, boardwalks, and marinas
Strong summer rental market
TAG Tip: “A lot of times, oceanfront homes aren’t valued as high as inland ones. We often see higher quality build farther inland, where there’s less turnover and less wear from constant guest traffic.” – Nathan Jordan
Wilmington's Go-To Appraisers for DSCR and STR Investments
Setting an accurate and competitive nightly rate for a short-term rental should not be guesswork.
It requires accurate data, local market insight, and a professional analysis. That’s where the TAG team comes in.
Our team’s approach to STR analysis combines multiple verified data sources to paint a comprehensive picture:
- AirDNA analytics for market benchmarks, comparable STR properties, and occupancy patterns
- MLS data and public records
- On-site property inspection to evaluate the condition and quality
- Retro seasonal data to understand how local markets actually perform over time
As Nathan Jordan explains:
“We use AirDNA as one of several tools. It’s a great starting point, but we verify that data against MLS-supported comps and past local performance. For example, if summer rentals have historically run 10% higher, we can prove that trend with local data.”
For investors utilizing DSCR loans, accuracy in both projected income and property value is essential. Because DSCR loans qualify properties based on rental income performance, not personal income verification like most loans, your appraisal must confirm realistic cash flow and market-based value.
That’s where our experience makes the difference. Each TAG appraisal for STRs and DSCR loans includes:
- Verified comparable rentals and historical occupancy trends
- Seasonal income adjustments supported by local data
- On-site evaluations of property condition, layout, and amenities
- Transparent, lender-ready analysis
Whether you’re setting nightly rates or preparing for a DSCR-backed refinance, TAG delivers data-backed appraisals in Wilmington and the surrounding areas that investors and lenders can trust. TAG us in!
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