THE PROCESS:

1.)      The Financing: Take the time now to see what you qualify for. Even if you are completely solid, talk to a lender or a few and find out what possibilities you have. Feel comfortable with your payments, rates, and terms even before we begin. If nothing else, it’s free financial credit advice from a professional! Please see me if you do not have any in mind and I can provide you with a list of reputable banks, lenders, and mortgage brokers.

 

2.)      Talk to your financial advisor: If you are pursuing an investment property or looking into getting a piece of this paradise and use it to build your portfolio or for tax relief’s, please consult your financial advisor or your accountant. Everyone has a different idea or outlook on what they can do on passive gains/losses, please find out from an expert!

 

3.)      Find a Realtor: Hopefully you are using the best…uh; hum ME, if not, good luck! Just kidding, but do use a Realtor®, it costs you nothing and it can be the best move you make!!! You want to find a Realtor® and choose one and know that there is a difference between a Realtor and a real estate agent! Remember that it is state law to have the Realtor or Real Estate Agent DISCLOSE his or her relationship to you. You must read, understand, and sign the SC Disclosure form. The Realtor or real estate agent will represent the Seller and you as a customer. This changes if and when you decide to become represented by your Realtor or agent, meaning, you become a CLIENT and they become your Buyers Representative, still at no cost to you. If you become a client, we will sign a Buyer Agency agreement, outlining our agreement. So now you really get represented and they owe you Fiduciary duties:

-Obedience                -Disclosure

-Loyalty                     -Accountability

-Confidentiality        -Reasonable Care and Diligence

       It is also important to know if your Realtor or Real Estate agent represents both parties: Dual Agency. This means that the Realtor or agent represents you and the seller………..Could become a conflict of interest. We either represent the buyer or the seller, never both. If we sell our team listings, we still will only represent one party, the other could seek other representation or simply become a customer, not a client. If this sounds confusing, let me know and I can explain this process in more detail. Pick a Realtor and work with him or her, but choose ONE that you both feel comfortable with and that is representing your interests.

 

4.)      The Search: Well, if I have given you this, we have probably started to find out what it is you are looking for: A primary residence, a second home, a vacation rental property, or some type of investment property, i.e. land. Here are some sample questions to ask yourself:

 

1.). What type of property are you looking for?

s         Primary Residence              __________

s         Second Home or Villa                    __________

s         Rental Home or Villa                      __________

s         Investment Property                        __________

2). What size property are you looking for?

s         Number of Bedrooms:                    __________

s         Number of Bathrooms:                   __________

s         Approximate Square Footage:        __________

3). What type/style of floor plan would you most like?

s         Single Story:                                   __________

s         Multi-level:                         __________

s         Split Level:                         __________

s         Ranch:                                            __________

s         Other (please specify):                    __________

General Questions:

1.)                How long have you been looking?        

2.)                How have you been looking?

3.)                Are you currently working with anyone else?

4.)                Do you have any signed agreements with other Realtors?

5.)                Are you pre-qualified?

6.)                What steps do you need to take to obtain financing?

7.)                What price range are you looking in?

8.)                What are you basing your price range on?

9.)                Describe your dream house (that fits in your price range):

10.)            What are some of the things you don’t want?

11.)            Tell me five things you love about your present home:

 5.)      Take Your Time: One of the most important things is to take your time!!! Make sure we find what it is you are looking for. The Island and the Low Country have so much to offer, find what you want, get specific, then we can gradually narrow down our search. I can get you any and all of the information you need, that’s the easy part! Don’t think or let someone tell you: “You better buy now, it won’t be here” BLAH, BLAH, BLAH…you buy when you are ready, not when someone tells you to!!!

 

6.)      Plan ahead: If at all possible, let me supply you with information way ahead of time, via internet or snail mail, it’s worth it! We can save a ton of time if you are somewhat familiar with the market values, taxes, costs, the areas, and maybe even some of the villa complexes. Again, if we have time, we will keep narrowing down each time we look at property or each time you come down here for a visit. If you find a complex or an area you like, but there are no availabilities, I will MONITOR the market constantly! If something comes on, I will find it, and most likely before anyone else does: Then get you some digital photos and all the information on the property fast! Believe me, if your dream home is not on the market now, in time it will be, so don’t get discouraged. It’s much more important to find what it is you want and not to settle for less!

 

7.)      YOU HAVE FOUND THE PERFECT PROPERTY:  Now my job really begins: Make sure, before we make an offer the following is addressed: The expense information, the management fees (if there are any), the history of the complex/upcoming assessments, the assessments if any of the street/plantation. Our financing is set or we know where we stand on this. Do we have a closing date in mind and have we discussed what our next steps are going to be. It may sound confusing, but this is why you have me!!! Basically, we do not want any surprises! Once we are fine with everything, we can proceed!

 

8.)      MAKING THE OFFER: Well we have made it this far and hopefully by now our research and hard work will pay off. Let’s make sure we discuss the following.

A.)       Initial offer must be written. If you are thinking about presenting an offer and need to find out if it may be too low, or if there is an offer on this property, have your realtor call and get as much information before you actually write the offer.

B.)       When writing the offer, we always use the SC association of Realtors standard contract, a legal real estate contract in South Carolina. Remember, to bring a checkbook when submitting an offer, we do not write offers without a check for earnest money.

C.)       Points in the contract to discuss:

1.)      Offering Price

2.)      Finance contingency

3.)      Date of finance contingency

4.)      Earnest Money

5.)      2^nd Earnest Money

6.)      “AS IS”

7.)      CL 100

8.)      COUNTERS TO PREPARE FOR

9.)      Inspection Report or Inspection Addendum

10.)  Assessment Protection Clause

11.)  Other Points of Interest or necessity that might be added that pertains to property.

12.)  A closing date.

13.)  Any questions you may have.

 

D.)       Your Realtor will discuss all of these points in the contract, but please feel free to ask away on the questions. Without going over all of these or all of the possible different scenarios, here are a few that always warrant a few questions:

E.)         Earnest Money: A lot of people are unsure what to put down for earnest money (Initial and second). You usually have an out of town owner and an out of town buyer, so a strong earnest money 5-10% is very normal and makes the most sense. The stronger the earnest $$$, the stronger the contract, plus you still have other contingencies to protect yourself, as long as you stay within your time frames within the contract.

F.)        Inspection/Inspection Addendum: It is always important to get a home inspection; it’s the smartest move you can make! You want to know exactly what is wrong with the home or villa or what isn’t. The seller is responsible for the following: ALL Appliances, Heating/AC, Electrical, Plumbing, and/or Safety concerns shall be in good working order, subject to reasonable wear and tear. You are not always buying a new home, so remember that! Also, some homes will have Polybutulane piping, or lead paint, or other items not in code today that were in code when these homes were built. This does not mean that the seller has to provide all new piping or replace all of the walls. The most important reason to get a home inspected is for the Buyer to know exactly what he or she is getting!!! The purchaser can choose the inspector and is responsible for paying him/her as well.

                          “AS IS” is just what it says!

G.)  CL 100- Seller agrees to provide at its expense at closing an "Official South Carolina Wood Infestation Report (CL-100)" in which no infestation or damage is reported or if there is damage observed, that it is insufficient to recommend repair.  Such report must be dated within 45 days of the Closing.  If infestation or sufficient damage is observed, Seller shall cause same to be repaired prior to closing or permit Purchaser's closing attorney to escrow funds from the sales proceeds at Closing in an amount equal to the costs of such repair.

 

H.)  Again, you will write the offer and the check, payable to the seller’s Real Estate Companies ESCROW ACCOUNT. Please read and review the SC disclosure if you have not or have decided to change from a customer to a client. Sign and initial/date everywhere you need to and PLEASE make sure your Realtor or Real Estate agent makes you copies. Personally, I always hand deliver the contract, if possible, but a signed fax contract is also binding and usually the only applicable solution.

 

I.)     REMEMBER: Sometimes you may not find out right away (Out of town seller), your Realtor will let you know the second they respond, they have to, make yourself available to or at least discuss a game plan! Sometimes I place an expiration date on the contract or may even add a “Time is of the Essence” clause if we need to know ASAP! Generally a verbal counter is acceptable, usually a counter is expected in some form: Ex: Counters

-Price

-Closing Date

-Earnest Money

-Contingencies

-Terms or additions

      Once both parties come to an agreement, this verbal    or these verbal counters must be signed/dated/ and documented. A fax is fine for now; an original should also be obtained.

 

J.)     YOU MUST CHOOSE: The buyer and seller have to choose a SC Attorney, your Realtor should have a list of them. You must also choose a Home Inspector, see what your time frames are, it’s usually ordered within 10 days of the signed contract.

 

9.)    This is where you find out how good your REALTOR really is. The work really begins now and follow up to the tee is absolutely crucial……………I am the best here and my follow up is always documented, with copies to all parties and all attorney’s involved……….Paper trail! I will stay on top of the lender (Get the finance letter), stay on top of the inspection process, document what we will have done, copy the attorney’s, make sure follow up has been done and repairs are being made, handle any issues that may arise, and the main thing is KEEP YOU INVOLVED AND KEEP COMMUNICATION LINES OPEN!!! Remember, we will not close until I do a FINAL WALK THROUGH on your property, the day before and/or the day of closing. Making sure that everything has been completed and the home is in order. Please feel free to contact me with any questions.

 

10.)  YOUR ATTORNEY will send you a letter explaining what you need to expect during the closing process. Remember your closing costs will be approximately 3% of your purchase price. They handle the transition with electric company and water/sewer. You need to be responsible for phone and cable, if in a home: pest control, trash pick up, and termite bond, etc. Any questions I cannot answer, our attorney will know, or I will find out!

 

11.)  INSURANCE: You will need to choose insurance: Home owners, Flood, and wind/hail, to name a few. It’s always good to check with a few companies, compare rates and/or programs. Please let me know and I will provide you with some names, if you do not already have some.

 

12.)  MOVING CHECK LIST:  Things you may need to do before you move!!!

             SERVICES:

             -GAS        -Lawn Service                   -Cell Phone

             -Electric   -Newspaper/Magazine      -Mail Service

             -Phone      -Security   -Cable/Satellite -Laundry

             -Garbage Collection  -Fuel   -Maid Service

                 -Water/Sewer     -Septic       -Pool Service

                 ACCOUNTS:

                 -Bank  -Investments   -Brokerage

                 -Home/Life/Health/Auto/Misc. Insurance

                 -Financial Advisor  -Charge Accounts/Credit Cards

                 -Retirement Accounts   -Gym –Department Stores

                 AGENCIES:

                 -DMV  -Vehicle Registrars

                 -Schools   -Post Office –Social Security

                 -Library –Daycare –Clubs and Associations

                 -IRS   -Veteran’s Association

                 PROFESSIONS:

                 -Doctors –Lawyers –Dentists

                 -Accountants –Chiropractor –Broker

                 -Medical Records –PT Records

                 -Other Doctors or Professionals    

      

13.)  THE ACTUAL CLOSE: It is not necessary for you to be at close. You have the option of doing a mail in close, signing prior to closing, doing a “Power of Attorney”, or coming to the close. The attorney can still go through all of the paper work with you by phone or you can attend the actual close. Either:st="on">Hilton Head Island, SC USA. Congratulations!!! You did it! Make a checklist of all of the things you need to do or of the people you need to see for a service (Bug people, contractors, lawn care, etc.). Again, I have a list on everyone, just ask me………anytime!

        

 It’s always nice to have measurements taken, furniture possibilities arranged, or estimate from contractors taken before you close, it will save you time and money to do this ahead of time, especially if time becomes an issue of great importance. I can help you even if you are not in town; it’s what I do!!! Also, please let me know if you would like me to arrange rental or management companies to view your home or villa, to give you an idea on what to expect or simply to find out who you would like to use!

 

                      If you do choose me as your Realtor, I can assure you that I will work the hardest, always be truthful and honest, communicate with you often, and most importantly “Do the right thing” at all times. I hope that I have made a new friend along the way! I am not in this for the sale, I do this thorough of a job with all of my clients, because I love what I do and I love this area…Don’t forget, this Island is too small, you see me all of the time…I have to be good!!!

Best of Luck,

 

Rick Saba

All of the information is believed to be true, but must be verified. Rick Saba and the Carolina Realty Group have done their best to put together this list to assist you in the home buying process, but please, please ask us if you have questions or concerns about anything. We thank you!

 

Oceanfront Homes

The oceanfront property on Hilton Head Island is located in the Sea Pines, Port Royal, and Palmetto Dunes   Plantations, as well as in Folly Field, Singleton Beach, and North and South Forest Beach. Dwellings range from small beach cottages to large oceanfront estates built on multiple lots. Prices vary by location, but in general, homes on the beach range from $1.2 million to well over $5 million. Vacant lots start around $1 million. Strong demand for a limited number of beach homes on Hilton Head Island drives substantial price appreciation. We expect this appreciation to continue well into the future. Many people choose to purchase oceanfront homes for their retirement and, in the mean time, rent them to vacationers. As short-term rentals, these properties can generate gross incomes approaching $200,000, annually. NB: Port Royal Plantation does not allow short term rentals.

 

Ocean Oriented Homes

“Ocean oriented” means that a home is located within a block or two of the beach. Typically, homes situated between two and eight rows from the beach - still a very short walk to the ocean. Many of these homes, particularly the ones in the second row, have views of the beach. Choices include modest beach homes built in the 60’s and 70’s to brand new extravagant 6-7 bedroom homes. These properties can be found in the same areas as the oceanfront homes. Port Royal Plantation does not allow short-term rentals of any kind. Prices range from $400,000 to over $3 million. Rental incomes of $30K to over $100K are typical for these homes. Ocean oriented homes have experienced substantial price appreciation with the trend expected to continue.

 

Oceanfront Villas

The oceanfront villas on Hilton Head Island can be found in the Sea Pines and Palmetto Dunes Plantations as well as in North and South Forest Beach and Folly Field. Choices range from one bedroom efficiencies in the Forest Beach area starting around $100,000 to luxurious four bedroom penthouse villas in Palmetto Dunes priced from $1 to $3 Million. Currently, the average two bedroom oceanfront villa is sells somewhere between $450,000 and $650,000. Most of the villas are used as outstanding short-term rental properties and annual gross incomes range from $20,000 to $70,000, depending on the number of bedrooms, the condition, the view and the location. Generally, unobstructed oceanfront views from the top floors fetch the highest prices.

 

Ocean Oriented Villas

Hilton Head Island's ocean oriented villas can be found in the Sea Pines and Palmetto Dunes Plantations as well as in North and South Forest Beach and Folly Field.  Most of these villas have one to four bedroom floor plans, with 2 bedroom/2 bath villas being the most common. Typically, these villas are located less than a ten minute walk to the beach. Owners can expect short-term rental income of $15K to $35K depending on age, size and location. Many investors begin their Hilton Head Real Estate investments with an ocean oriented villa with a goal in mind: to purchase an oceanfront villa in the future. Bearing this in mind, wealth can be created through appreciation and building equity (the short-term rental income subsidizes the equity).

 

Deepwater Access Homes

Deepwater access refers to the accessibility of a large boat to a dock at low tide. There are many homes on Hilton Head Island as well as the mainland that have deep water access. These homes can be found in Sea Pines, Wexford, Long Cove, Hilton Head, Spanish Wells, Blue Heron Point, Windmill Harbor, Colleton River and several locations in Bluffton on the May River. There is a very strong demand for deepwater access with available inventory in short supply. Wexford and Windmill harbor are both built around large lock-controlled harbors and provide a sheltered environment in which the tide never fluctuates. Prices range from $600K to over $3 Million.

 

 

Private Golf Communities

Private Golf Communities include Wexford, Long Cove and Palmetto Hall on Hilton Head Island and Colleton River, Moss Creek, Belfair and Berkeley Hall just off of Hilton Head on the mainland. Prices range from $300K to over $1 Million. Generally, these communities are designed around excellent golf courses available only to property owners. They feature large clubhouses, dining areas and other amenities like fitness rooms, tennis courts, boat docks and marinas, and a host of other activities. The golf course at Long Cove is currently ranked in the top ten courses in the country. The golf at Colleton River is ranked the highest in the country among private gated communities with two courses (both in top 100) and our newest community, Berkeley Hall, has taken the golf lifestyle to a new level of prestine playing conditions and state-of-the-art facilities, with a 35,000 square foot clubhouse, three restaurants. There is a wide selection of choices available to satisfy the needs of buyers desiring a private club lifestyle. Check the section for more detailed information about some of these communities.

 

  Sea Pines Plantation

 

Located on the Southwestern tip of the Island, Sea Pines Plantation is Hilton Head Island’s first developed community – or “Plantation” as it was originally termed when founded by Charles Fraser in 1956.  In addition to being a residential haven area, Sea Pines has also come to be known as a World-Class resort!  Here are just a few of the “highlights” Sea Pines has to offer:

 

·        Five (5) miles of expansive & beautiful Atlantic Ocean white, sandy beaches.

·        Miles of property on or near the Ocean and Intracoastal Waterway.  Most homes near South Beach have dockage facilities available.

·        Approximately 5,000 acres of land (1,300 of which are devoted to parks, forest preserves , lagoons & marshlands!) and over 6,000 homes and villas.

·        Sea Pines Conference Center:  Offers conference facilities & other amenities.

·        Dining:  Wide variety, with most cuisines available.

·        Three (3) community Swimming Pools as well as pools in all Visitor areas (Villas) as well as in many private homes. (available with annual fee)

·        Community Playgrounds/Recreation Areas.

·        Sailing:  Rentals of boats and sailboards.  Lessons are also available.

·        Four (4) Championship Golf Courses & Pro Shops:

·        Club Course:  For member play only Sea Pines Country Club.

·        Sea Marsh Course:  For member play & resort guests.

·        Ocean Course:  For member play & resort guests.

·        Harbour Town Links -- Home of the famous MCI Heritage Golf Classic:  For member play & resort guests.

·        50 miles of bike paths.

·        Over 100 Tennis Courts.

·        Two (2) Racquet Clubs:

·        South Beach Racquet Club

·        Sea Pines Racquet Club – Formerly hosted  the Family Circle Magazine Cup Tennis Tournament

·        Two (2) Beach Clubs:

·        Sea Pines Beach Club:  For property owners and resort guests.  Offers many amenities including a party room, outdoor “concessions,” picnic & Oyster roast facilities, etc.

·        The Ocean Club/Tower Beach Club:  Private membership limited to Sea Pines Property Owners.  Offers premier Beach Club facilities.”

·        Two (2) Marinas:  Offering over 150+ Boat Slips!

·        Harbour Town:  Open to the general public.  One of the most popular landmarks on Hilton Head Island! Premier Marine community featuring a  picturesque Mediterranean Village with specialty restaurants, lounges & shops and many forms of entertainment and activities.   The expansive docks -- capable of accommodating yachts up to 115’ in length --  host a dock-master fuel station, telescope viewing & a site for many charter cruises to board.  Recreational facilities blend naturally into the lush landscape.  Also home of the newly refinished  famous red & white striped Lighthouse overlooking Calibogue Sound & The Harbour Town Basin!.

·        South Beach Marina Village:  Open to the general public.  Quaint New England fishing village in Braddock’s Cove with restaurants, shops, entertainment, lounges, dockmaster, bait & tackle shop, etc.  Located at the Southern-most tip of Hilton Head Island! 

·        Sea Pines Property Owners Community Services Associates/Architectural Review Board (CSA/ARB):  Responsible for maintenance/upkeep of Plantation & for the well-being of Property Owners. 

·        Abundant Lagoons for fishing & boating.

·        41 miles of Nature trails & private forests for biking, walking, running, etc.

·        Three (3) large Shopping areas.

·        Lawton Stables Equestrian Center:  Offers boarding and nature trail rides

·        Heritage Farms:  Organic gardening area.  For property owners only.

·        Two 24-hour manned security gates and roving security patrol

·        Association Fee:  Improved:  $811.00 

Shipyard Plantation

 

Known as being both a residential as well as a resort community, Shipyard Plantation offers a full spectrum of amenities including the following:

 

·        Approximately 800 acres and over 2,000 homes and villas, consisting of  single family homes as well as villa residences and rental properties.

·        Shipyard Beach Club:  Offers guests & residents access to the lovely, snow white beaches of Forest Beach -- touted by some as being “the best stretch of beach on Hilton Head.”

·        Crowne Plaza Resort:  Offers guests & residents access to fine dining and/or casual fare, nightclubs, meeting rooms, shops, indoor & outdoor swimming pools, and an on-site health club.

·        Dining:  A variety of restaurants at the Golf Club, Beach Club, Hotel & Convention Center.

·        Boutiques and shops in Hotel and Clubs.

·        Pools in all visitor areas (villas) as well as in some private homes.

·        Over 4 miles of bike paths

·        Van Der Meer Shipyard Racquet Club:  One of Tennis Magazine’s “50 Greatest U.S. Tennis Resorts.”  Features 23 Championship courts nestled among magnificent oaks and beautifully landscaped grounds.  Also has covered courts in the Shipyard Racquet Club.  Special programs and clinics have been designed to provide for thorough, comprehensive learning; yet they also allow plenty of time for shopping, the beach or any of the other Island activities.

·        Three (3) Nine-Hole Golf Courses:  Clipper, Galleon & Brigantine

·        Winding trails for walking, biking, rollerblading, jogging, etc.

·        Association Fee:  Improved or Unimproved:  $635.00

Palmetto Dunes Plantation

 

Located near the middle of the Island on the Atlantic Ocean side, Palmetto Dunes Plantation offers a unique combination of being both a resort as well as a residential community.  The Plantation itself consists of three distinct areas:  Palmetto Dunes Plantation, Shelter Cove, and Leamington.

Palmetto Dunes Plantation (main)

 

·        Approximately 1,800 oceanfront acres and over 5,000 single-family homes and villas.

·        Three (3) miles of white, wide, sandy Atlantic Ocean beach for walking, running, swimming, fishing, windsurfing, sailing, canoeing, or parasailing!  Facilities available for rent.

·        Hyatt Regency Hilton Head Resort:  Oceanfront accommodations with restaurants, shopping, pools, entertainment, conference facilities.

·        Hilton Hotel:  Oceanfront accommodations with restaurants, shopping, pools, gym, conference facilities.

·        Three (3) Golf Courses: 

·        Robert Trent Jones Golf Course

·        George Fazio Golf Course

·        Arthur Hills Golf Course

·        25-court Rod Laver Tennis Center, featuring Har-Tru, Laykold, super grass & lighted courts.

·        Miles and miles of bike paths.  Bike rental available.

·        Boasts a 12-mile network of lagoons meandering through the resort for canoeing & fishing.  Canoe rentals and Charters available.

·        Pools in all visitor areas (villas), hotels, as well as in many private homes.

·        Palmetto Dunes Property Owners Association: Responsible for maintenance/upkeep of Plantation & for the well-being of Property Owners. 

·        Dining:  Variety of restaurants -- both public (in hotels) and private.

·        Unique mingling of “Residential” and “Resort” -- separated by security gates.

·        Three 24-hour/day manned Security Gates.

·        Association Fee:   Improved or Unimproved:  $1,145.00 

Shelter Cove

 

·        Located across the Highway from Palmetto Dunes -- though still considered a part of Palmetto Dunes.  Located on the “sunset” side of the Island. 

·        Hosts 230-acre Shelter Cove Marina Community Center, which includes a 15.5 acre deep water Harbour -- the largest deep water Marina on the Island.

·        Fine harbourfront restaurants, shops, nightly entertainment, weekly fireworks shows.

·        Disney Resort on premises.

·        The Mall at Shelter Cove:  Located near the Shelter Cove premises, this is the only indoor shopping mall on the Island! 

·        Association Fee:  Improved or Unimproved:  $550.00

Leamington

 

·        Secured premiere exclusive neighborhood community located within Palmetto Dunes Plantation.

·        Host to the Arthur Hills Golf Club.

·        Property owners have access to private beach cabana, recreation center & private Golf Club.

·        Association Fee:  Improved Resident:  $1,414.00

Forest Beach

 

Consisting of both “North” and “South” Forest Beach, The Forest Beach Area covers the large stretch of Oceanfront land between Shipyard Plantation and Sea Pines Plantation.  Its location provides for many unique amenities including:

 

·        Contains over 3 miles of lush, white sandy beaches -- considered by some to be the “best stretch of beach on Hilton Head Island.”

·        Waterfun Park:  Water Park & Miniature Golf -- fun for the whole family!

·        Coligny Plaza:  One of the “oldest” shopping plazas on the Island.  Offers many small shops, abundant restaurants, entertainment, grocery store & many service-oriented businesses.

·        Treasure Island:  Miniature Golf Course

·        Beach Market:  “Boutique” shops and specialty restaurants located right on the waterfront.

·        Circle Center:  Grocery store, Drug Store, many other local and national shops and restaurants.

·        Forest Beach is considered a “non-plantation,” although there is a Forest Beach Property Owners Association that is optional to join ($55.00/year).

 

Estimated Cost of Owning HHI Villas

1)      Each plantation has annual Association Fees or POA (Property Owner Association) Fees

2)      Regime Fees – These are monthly condo fees. These typically cover water and sewer, grounds maintenance, outside electrical, trash pickup, monthly pest control, and maintenance of pool or tennis courts if on premises. Typically these fees are based on size of unit and will run $250 to $350 monthly (for a 2 bedroom) and $375 to $500 (for a 3+ bedroom) plus and insurance assessment of $800 to $1200 per year.

3)      Current conforming mortgage rates are 7.125% plus a point to close. This is approximately $674.00 per month per $100,000 borrowed (P&I) on a 30 year mortgage. Current jumbo rates (Loans over $275,000) are @ 7.25% plus a point. Or, $682 per month per $100,000 borrowed on a 30 year amortization.

4)      Short term (weekly) management companies will typically charge rental management fees of 25 – 35% of gross plus housekeeping fees. You should net 60 – 65% of gross income.

5)      Long Term (Annual) management companies will typically charge rental management fees of 10% a month of total rental. Tenants, unless specified are responsible for their own utilities.

      Please contact me anytime for a list of preferred vendors, including rental companies, regime/H.O.A. information, and more!

Guide for Income Producing Property Ownership

 

If you have ever considered owning a home or villa on Hilton Head Island, you might want to consider placing your property on the short term rental market. By generating additional income through vacation rentals, you can subsidize your mortgage and expenses and create wealth through appreciation.

First, you will want to hire a property management company. Property management companies rent properties on a weekly basis to people who are here on vacation. Since Hilton Head Island is one of the most popular destinations on the South Atlantic Coast, the short term rental market here booms. These companies have a number of homes and villas which they advertise. In return for placing renters in your home or villa, you pay the company a fee, usually 20% to 30% of the income they generate through rentals.

Most people who choose to rent their property in this fashion are “absentee” owners. Absentee owners prefer to hire someone to maximize rental income as well as look after their property in order to minimize damage and keep up with basic maintenance needs.  They are usually too involved in their lives away from Hilton Head and don’t want to be distracted by day to day problems involving vacation property. This being said, you will want to interview several property management companies on the island to asses their capabilities, fees and contractual terms. Another good way to find out more about a company is to talk to someone who currently owns a home or villa that rents with that company.

Compare the estimated annual gross income to the fees they will charge.  You will want to choose a company with good references and that is located relatively close to your property. Also, your property might get closer attention if the company only manages properties in your area, as opposed to all over the island.

Before you go any further, you need to understand that property on the short term rental market will incur more than normal wear and tear. People who are on vacation tend to be careless. This is not meant to scare you, but simply to prepare you. An anecdote: A client of ours bought a nice beach home in the Forest Beach area and remodeled. The house has always rented very well and in four years, they have only had one “mishap.” It turns out that a group of ten lady golfers rented the house. One night, one of the “ladies” managed (they still don’t know how) to fall into the drywall in the closet, through the wall and into the bedroom, creating an extremely large hole (apparently they had been drinking…quite a bit). You need to assess whether your emotional makeup allows for the thought of strangers occupying your property and creating wear and tear, and quite probably being careless and sloppy with your personal possessions.  Weigh this against the income you will receive, keeping in mind these guests are helping you pay your mortgage.

You should furnish nicely, but not extravagantly. Use floor and wall coverings that will stand up to the test of time, water and sand. Choose kitchen and bath items that are durable, inexpensive and can easily be replaced (Wal-Mart, Sams). If you are mentally prepared for the property to get "beaten up," you will have a much easier time with the whole process. When it comes time to take the property off the market, you can replace the floor and wall coverings as well as the furniture and other items.

If you are shopping for a property to place on the short term market, it is important to understand cash flow.  Never expect a positive cash flow if you have a mortgage; it isn’t possible. Any rental agent or Realtor who tells you otherwise is to be viewed with great suspicion.  Don't listen to talk about how many weeks of rentals you can expect.  If your rental agent rents your property to "snowbirds" for the winter months, you will get twelve to fourteen weeks of rentals, but you will get about the same for a month as you would for a week in the summer.  Ask for estimated gross annual income and forget the rental agent who says you can get 20 to 22 weeks of rentals.  Ask to see monthly statements for comparable properties.

Scrutinize all costs carefully.  All rental agents take a percentage commission of the rental fees collected.  Some add an "advertising" charge. Someone will clean your property and replace all of the sheets and linens after each occupancy. Find out if the property manager bundles the cleaning cost with the rental price or charges the guest all or part of the cost.  Make sure you understand where this cost goes.  Who supplies the linens?  If you do, then they should be laundered in your property using your appliances, water and electricity.  There will probably be an expense for linens and towels that wear out or vanish.

Find out if there are any charges involved when you use the property yourself. What are the “friends and family” rates - when you send a relative or business associate?  Can you participate in the rental of your property or in referring people you know to the rental agent (commissions to you)? 

Understand the maintenance policy. Many rental agents do not have a maintenance staff. Therefore, if a toilet is clogged, they will call a plumber. Likewise, if a light bulb burns out, they call an electrician and if a doorknob comes off, they call a locksmith. You can also expect the company to mark all ancillary charges up (a handing charge). We have seen a monthly billing statement with a $50 charge to change a light bulb. Scrutinize a number of actual monthly statements from the property management company. If they want to provide copies with the owners name and address blacked out, that's reasonable, but do see some actual statements. If you need repair people, I can recommend some.

Some rental agents limit how many weeks you can occupy your own property, and the IRS also has strict allowances for “personal use,” particularly if you have plans to perform a 1031 tax deferred exchange in the future.

Some rental agents hold out some number of rent free weeks as a promotion, ostensibly to entertain travel rental agents. Travel rental agents make a up a very small part of the majority of rentals, which occur in the already busy summer months.

As we mentioned earlier, property managers who concentrate in limited areas are able to give those properties more personal attention.  Also, the employees are more likely to be familiar with your particular property, which helps to sell it. Don’t underestimate the importance of having someone “nearby.”

A good rental agent will send someone to inspect your property after each occupancy.  This is to ensure the property has been cleaned properly, to touch up where needed, to replace burned out light bulbs and dead batteries in TV remotes and smoke detectors, spot and report any maintenance needs, and ensure there is an adequate supply of kitchen items and tow