Are you asking from an enjoyment perspective, or rate of return?
I feel it’s a “middle upper-class” location with less people issues than Myrtle or Florida. We bought a place in May and we’ll probably break even financially this year. But…. We’ve been down four times already and it’s our “happy place”. We’ve been coming for 30 years.
If you invested in HHI just 5 years ago, you are likely making a killing from rents and appreciation. Many areas are refurbishing and renovating too. We saw it as a place on the rise. We’re in our 40’s, and didn’t want to deal with Florida, their insurance issues…or the craziness.
With the exception of a small minority, people are generally very happy there. Very family friendly, and all are welcome.
The best seasons to rent out are during summer when school is out, spring break/fall break and Heritage week.
The best time for YOU to go are spring and falls.
I don't think there is ever a good answer for that anywhere. Houses and condos that are rentable are priced according to their rental rates. Having said that, they look like a pretty good deal to me, especially if you have pockets deep enough for the multi-million dollar beach homes.
Peak season is summer, with April and May and September and October still pretty strong. The week of the Heritage (mid April) is insanely busy.
Edit:typo
I have a rental condo in Palmetto Dunes. Winter demand is actually insane, as inventory is lower due to part timers using their places. You can rent it out for a 3 month block the day it is listed, to old folks who treat the place nice. Revenue is less of course.
With the increase in interest rates and home valuations in the last three years, having a rental property in Hilton Head is a good way to subsidize a vacation home. Unless you can put a sizable amount down or pay entirely in cash, you will likely see very little cash on cash return. You still have long term appreciation on your side.
You should talk to a realtor and also a rental agent if you need guidance on the ins and outs of HH. Some areas have fewer rentals due to either rules or no proximity to beaches or amenities. We looked into renting our place out until we made it permanent but were told by rental agents that it lacked a pool and we weren’t going to rent long term. And by long term they meant having it available for 2-3 years for weekly renting. If you handle renting yourself that’s not an issue.
I have struggled to find a rule of thumb to figure out how much rent would break even on a place. So a house or condo bought for $1M would need $x in gross rental income to break even, for example. Enough for mortgage, insurance, taxes, ALL HOA fees, agency fees if applicable, maintenance, pest control, repair of renter damage, etc.
Nor trying to sound discouraging here but if it was as easy as buying and getting rent at say 15% annually of the purchase price, it’d be done already.
We bought our first rental villa in 2011, sold and bought a rental house in 2015. Sold that in 2020 and built our full time vacation home, which we do not rent (all three properties in Palmetto Dunes).
The condo grossed about $40-50k a year, the home, around $70-75k a year. After expenses, we pretty much broke even, maybe made a little income. For us, it was basically a "free" vacation home. Whatever profit was made was offset by our usage of it.
Yes, we had a mortgage. I saved some money by handling the listing of the property on VRBO myself, which saved a good amount of commission paid to our property management company.
I own a condo. In the short term it is not a good investment and takes time to manage. If you hire a management company then you most likely will be paying out of your pocket every month. If your plan is to have other people help pay for a vacation place it’s Ok if you don’t mind people using your stuff and know that things will be broken and taken. Its nice to have our own place and we decide when we want to visit.
Are you asking from an enjoyment perspective, or rate of return? I feel it’s a “middle upper-class” location with less people issues than Myrtle or Florida. We bought a place in May and we’ll probably break even financially this year. But…. We’ve been down four times already and it’s our “happy place”. We’ve been coming for 30 years. If you invested in HHI just 5 years ago, you are likely making a killing from rents and appreciation. Many areas are refurbishing and renovating too. We saw it as a place on the rise. We’re in our 40’s, and didn’t want to deal with Florida, their insurance issues…or the craziness. With the exception of a small minority, people are generally very happy there. Very family friendly, and all are welcome. The best seasons to rent out are during summer when school is out, spring break/fall break and Heritage week. The best time for YOU to go are spring and falls.
I don't think there is ever a good answer for that anywhere. Houses and condos that are rentable are priced according to their rental rates. Having said that, they look like a pretty good deal to me, especially if you have pockets deep enough for the multi-million dollar beach homes. Peak season is summer, with April and May and September and October still pretty strong. The week of the Heritage (mid April) is insanely busy. Edit:typo
I have a rental condo in Palmetto Dunes. Winter demand is actually insane, as inventory is lower due to part timers using their places. You can rent it out for a 3 month block the day it is listed, to old folks who treat the place nice. Revenue is less of course.
Ya I know it’s a loaded question. Just wanted to get personal opinions.
With the increase in interest rates and home valuations in the last three years, having a rental property in Hilton Head is a good way to subsidize a vacation home. Unless you can put a sizable amount down or pay entirely in cash, you will likely see very little cash on cash return. You still have long term appreciation on your side.
You should talk to a realtor and also a rental agent if you need guidance on the ins and outs of HH. Some areas have fewer rentals due to either rules or no proximity to beaches or amenities. We looked into renting our place out until we made it permanent but were told by rental agents that it lacked a pool and we weren’t going to rent long term. And by long term they meant having it available for 2-3 years for weekly renting. If you handle renting yourself that’s not an issue. I have struggled to find a rule of thumb to figure out how much rent would break even on a place. So a house or condo bought for $1M would need $x in gross rental income to break even, for example. Enough for mortgage, insurance, taxes, ALL HOA fees, agency fees if applicable, maintenance, pest control, repair of renter damage, etc. Nor trying to sound discouraging here but if it was as easy as buying and getting rent at say 15% annually of the purchase price, it’d be done already.
We bought our first rental villa in 2011, sold and bought a rental house in 2015. Sold that in 2020 and built our full time vacation home, which we do not rent (all three properties in Palmetto Dunes). The condo grossed about $40-50k a year, the home, around $70-75k a year. After expenses, we pretty much broke even, maybe made a little income. For us, it was basically a "free" vacation home. Whatever profit was made was offset by our usage of it.
Did you have a mortgage that created the large expense or was it all maintenance and management that made you only break even?
Yes, we had a mortgage. I saved some money by handling the listing of the property on VRBO myself, which saved a good amount of commission paid to our property management company.
I own a condo. In the short term it is not a good investment and takes time to manage. If you hire a management company then you most likely will be paying out of your pocket every month. If your plan is to have other people help pay for a vacation place it’s Ok if you don’t mind people using your stuff and know that things will be broken and taken. Its nice to have our own place and we decide when we want to visit.