Pleasure Island is one of the most familiar vacation spots on the North Carolina coast. Carolina Beach has the boardwalk, the lake, and a lively downtown. Kure Beach, just to the south, is quieter, with its pier and Fort Fisher down the road. Both are a short drive south of downtown Wilmington, and the island draws visitors from across the region and beyond. That makes the island a natural fit for investors interested in a vacation rental. But buying well here takes more than picking a house close to the sand. This guide covers what we’d look at before making an offer.
Carolina Beach vs. Kure Beach: Two Different Rental Markets
The two towns share an island, but they don’t attract quite the same guests.
- Carolina Beach tends to draw guests who want to be near restaurants, the boardwalk, and events. Rental inventory includes oceanfront condos, older cottages, and newer raised homes. The town is also planning a public oceanfront park after its boardwalk-area land purchase, which could change how that part of town feels over time.
- Kure Beach appeals to families and guests who want a slower pace. It’s smaller and more residential. Our Kure Beach town guide covers its neighborhoods and character.
Neither is better. They’re different products. Decide who your guest is before you decide where to buy.
Check the Rules Before You Run the Numbers
Zoning and HOA restrictions
Not every property on the island can be rented short-term, and the restrictions don’t always come from the town. Many condo associations and HOAs set their own rental rules, including minimum stay lengths or outright limits. Read the declaration, bylaws, and rules before your due diligence period ends.
Zoning still matters too. In September, WECT reported (Sept. 10, 2026) that Carolina Beach Town Council had to vote to allow 15 apartments at The Proximity, a complex in a highway business district, to be rented short-term. The developer had voluntarily agreed to keep short-term rentals out when the project was approved in 2021. That case is a good reminder that the approvals and conditions attached to a specific property can matter as much as the general rules. Confirm with the town’s planning department before you buy.
Occupancy and sales taxes
Short-term rentals on Pleasure Island owe two kinds of tax on guest stays:
- Room occupancy tax. New Hanover County Finance lists a 6% room occupancy tax rate for both the Town of Carolina Beach and the Town of Kure Beach. Operators report monthly through the county’s portal, with reports due by the 20th day after the end of the reporting month. Late reports can face civil and criminal penalties.
- State and local sales tax. The N.C. Department of Revenue says accommodation rentals are subject to the state rate plus applicable local sales taxes. Most fees tied to the stay, including cleaning, pet, linen, and reservation fees, count as taxable gross receipts.
Booking platforms and property managers may collect some of these taxes for you, but don’t assume they handle all of it. Confirm who files what, and keep records.
The Vacation Rental Act
North Carolina’s Vacation Rental Act sets rules for written rental agreements, handling guest deposits, and what happens when a vacation rental is sold. If you’re buying a home that already has future bookings, those reservations can affect your closing and your first season. Our post on what NC law requires when a beach rental is sold was written for Brunswick County sellers, but the state law applies on Pleasure Island too.
Costs That Catch New Investors Off Guard
- Insurance. Rental homes usually need a dwelling policy, and coastal wind coverage can be a large line item. See our breakdown of 2026 NC dwelling insurance rates for rental owners, and get real quotes during due diligence.
- Flood exposure. Elevation, flood zone, and the home’s flood history all matter. The north end of Carolina Beach sees regular king tide flooding along streets like Canal Drive, which can affect guest experience as well as insurance.
- Parking. Guests care about parking more than owners expect. Kure Beach council has been discussing changes to its paid parking program, so check a property’s on-site parking and how town rules affect your guests.
- Management and wear. Professional management, cleaning turnover, salt air, and sand all add up. Budget for regular maintenance and replacing furniture, HVAC, and exterior finishes sooner than you would inland.
Underwriting a Pleasure Island Rental
When we help investors evaluate a property, we build a conservative plan instead of relying on a best-case revenue projection:
- Ask for the seller’s actual booking history and gross receipts, not just a rental estimate.
- Look at how many weeks a year the property books outside of summer. Off-season demand varies a lot from property to property.
- Make sure the deal works at today’s interest rates and with real insurance quotes.
- Decide whether you’ll use the home yourself. Personal use affects your financing type and your tax situation, so talk with your lender and a tax professional.
If a long-term rental might fit your goals better, our Wilmington long-term rental guide walks through that approach.
Frequently Asked Questions
Do Carolina Beach or Kure Beach require a short-term rental permit?
Rules can change, and HOA and zoning restrictions vary by property, so check with the town’s planning department and review any association documents before you buy. What’s consistent is that owners must collect and remit occupancy and sales taxes on short-term stays.
What is the room occupancy tax on Pleasure Island?
New Hanover County Finance lists a 6% room occupancy tax rate for both Carolina Beach and Kure Beach. State and local sales tax applies on top of that.
Can I finance a vacation rental as a second home?
It depends on how you’ll use the property. Second-home and investment loans have different rules and pricing. Tell your lender your plans up front.
Is Carolina Beach or Kure Beach a better investment?
It depends on your target guest, budget, and how hands-on you want to be. Carolina Beach draws guests who want activity and nightlife. Kure Beach draws guests who want quiet. Compare actual booking history for similar properties in each town.
Thinking about a vacation rental on Pleasure Island? We’ll help you check the rules, run realistic numbers, and find a property that fits your plan. Contact Aspyre Collective to talk it through.
