A majority of buyers I am in front of are investment buyers.
What does that mean?
These buyers are looking to own a home or villa here on Hilton Head Island that they themselves can use and enjoy. Plus, they take advantage of the placing that property on the vacation rental market to generate income when they are not using the property.
In essence, they are making money that can go a long way toward covering the annual carrying costs of that property. Why not? In other words, they turn that vacation home into a preforming asset!
By the same token, there are some specific criteria involved when buying a property that can attract vacation rentals. Hilton Head is a big island, and you have to look to the areas where the annual vacationing public is attracted to. After living on the island now for 40+ years, I’ve gained pretty good insight on the areas and properties buyers should focus on for their investment.
Here are the top 10 features to look for when buying that investment property:
Proximity To Hilton Head’s Beaches
The #1 attraction for visitors to Hilton Head Island is the beach. The vacation rental investment property should be ocean front or walking distance to the beach — which is high on the list for vacationers. Some gated communities offer public transportation during the tourist season. For instance, Sea Pines has a trolley and Palmetto Dunes has their Dunes Buggy. So, if you’re not in walking distance to the beach, you have the option of easy community transportation.
Sure, you have the ocean, but kids love jumping into a pool when they are not at the beach. Buying a home for the rental market? Make sure there is a pool, or at least room to put one on. Most villa complexes have pools.
No pool? Your rental potential will drop.
Most buyers want to see what sort of income a property will generate. It’s best to have a past rental history on the property. If not, a quality vacation rental management company can put together a rental projection for you. Over the years, I’ve learned what properties can expect in rental income and which can inform my buyers as we begin our search.
The vacationing public is looking for quality and comfort when traveling nowadays. Don’t cut corners on the furnishings. Flat screened TV’s in the living area and bedrooms is a given. Nice quality furniture, wall hangings, décor, and even the mattresses make early impressions on the guests. Make sure that living room sofa has a fold out bed.
Bedrooms & Bedroom Configuration
The number of bedrooms and how they are configured is a key element on the rental market.
With a villa buyer, they should start with at least a 2-bedroom floor plan and move up from there. A 3-bedroom villa is ideal.
With homes, start with at least 3 bedrooms. A king bed in the master is primary. Quite often a guest bedroom can have what is called a “swing king,” beds that can be set up as twins or pushed together and fitted as a king. This offers more flexibility with renting. Of course, kids always like the bunk beds.
What else is there to do besides go to the beach? When folks are on vacation they want to spend as little time in the car. Close proximity to dining, shopping, and entertainment are primary for an investment property owner.
In Sea Pines, you have nearby activities with golf, tennis, deep sea fishing, water sports, and of course the active ambiance of Harbour Town and South Beach Marina. Palmetto Dunes has many of those same attractions that also include Shelter Cove Marina and close proximity to the Shelter Cove Towne Centre.
Nowadays, most vacationers are not looking for just a roof over their head during their stay. For the most part, they want it to be nice. Interior upgrades and remodeling goes a long way with your investment property. For one, it will increase weekly rental rates. Plus, you will stand a good chance of getting return business from happy tenants looking to come back next year. With the kitchen, new cabinetry, nice tile floors, stone counter tops and stainless steel appliances make for a great impression with that rental clientele. Bathrooms need similar upgrades with new vanities, stone counters, nice tiled walk in showers, and of course quality towels and wash clothes. First impressions last a long time.
Surrounding Neighborhood & Community
Quite often, returning guests to the island will stay in the same areas that they previously stayed. There is a comfort factor in knowing the neighborhood. That might start with the gated communities such as Sea Pines and Palmetto Dunes. They are very self-contained and offer the visitors close proximity to many different activities. If the beach is the thing, then Forest Beach offers a short walk the ocean as well as walking distance to shopping, dining, and entertainment. Want a location with not quite as much hustle and bustle, the Folly Field and Port Royal areas give you a bit quieter atmosphere during your stay.
The ocean, of course! Wouldn’t it be nice if everyone could have that ocean view, although it comes with a price. What are some other options? How about a golf view? Maybe a lagoon view? There are also some wonderful tidal marsh and creek views. The views are an important commodity, not only for those on vacation, but owners as well.
I cannot emphasize a more important factor than having a good quality management company oversee your property — if for nothing else but peace of mind. Over the years, we have seen the phenomenal growth in “self-managing” companies like VRBO, AirBnB, and Home Away. Do you want to oversee your housekeeping, negotiate terms with renters, handle your own books, find reliable maintenance companies, take late night calls from tenants whose hot water heater doesn’t produce hot water? Of course not!
Got any questions?
Give me a call at 843-384-5535 or fill out the form below. Let me know how I can help.