In South Carolina, over 30% of people rent their home.
This means that there’s massive opportunity for investment property owners. This is especially true in Bluffton and Hilton Head Island—two of the fastest growing areas in the state.
Buying a rental property in Hilton Head Island can come with plenty of benefits! Real estate is a stable investment that can bring in a great amount of passive income, especially with long-term rentals. A long-term rental is where an owner leases out their property to renter for at least a year, but often more.
To reap all of the benefits of an investment property, make sure you do it right.
Here’s the ultimate guide to buying a long-term rental property on Hilton Head Island:
Consider the Call of Duty
Before you dive into the deep end, consider what it takes to be a great landlord.
Just because the income is called passive doesn’t mean that you can sit back and relax while the money rolls in. In fact, being a landlord takes a lot of work.
Not only do you have to make all the financial decisions about the property, you have to draft up leases and contracts for your tenants. Additionally, you are also the primary contact when things go wrong at the house in terms of repairs, maintenance, and emergency calls.
In order to save costs, many landlords do simple repairs themselves instead of outsourcing the work. These repairs could be anything from unclogging a toilet to repairing a piece of drywall.
All of these duties are important to consider before you take on the job. If you’re willing to take these on, then you’ll find that being a landlord is extremely fulfilling.
Although many property owners choose to take on these jobs, you don’t necessarily have to. You can hire a property manager that will do the work on your behalf, making land ownership extremely simple.
But services like these come with a price.
Calculate the Costs
Buying an investment property in Hilton Head Island is not as easy going as buying a primary residence. There are extra expenses that you have to consider.
Typically, when you buy a long-term rental property in South Carolina, you’re required to put down more money than you would for an owner-occupied property.
Many home buyers have to put down at least 20% down on their mortgage. You might also find that mortgage rates are higher for rental properties.
In addition to these costs, you should also consider the cost of insurance. Hilton Head Island home insurance rates are already higher than the average due to its geography, and the rates can be even higher for rental homes.
With all of this in mind, you should be able to calculate your budget for your rental property. Once you know this, you can start searching for homes that will give you the highest return on your investment.
Choose the Right Property for You
If you’re wanting to reap the most financial benefits of being a landowner, be sure to make smart decisions on the type of home you buy.
Multiplex units are more likely to be cash flow positive, but Hilton Head Island isn’t necessarily flooded with these types of homes. It’s far more common to find single-family homes or condos on Hilton Head Island.
So, when buying one of these properties, remember that bigger is not always better. Although larger homes might give you the option to have additional main-floor living space, this isn’t always the case. Oftentimes, large homes bring with them higher maintenance costs and additional expenses that can eat away at your potential profit.
When searching for a property, you should also consider the types of renters you want to attract. Usually, single-family homes attract long-term renters that have families or roommates, while condos might bring in short-term renters or young professionals.
Find the Right Location
Location, location, location.
We’ve all heard it before.
Location is possibly the most important aspect of buying an investment property. Being in a great part of town can make your home extremely desirable and attract tons of renters.
Basically any neighborhood on Hilton Head Island has something fantastic to offer—from the amenities of Harbour Town to the beaches of the east coast.
Generally, you want to make sure your investment property is located in a prime location near tons of amenities, like schools, grocery stores, and shopping centers. Bonus points if you find a home near entertainment facilities and beaches.
If there are nearby amenities, you can usually rent your home for a higher price, meaning you make more of a profit.
Get Expert Help
With so much to consider when buying a Hilton Head Island long-term rental property, it’s best to get expert help from your local real estate agents at Berkshire Hathaway HomeServices Hilton Head Bluffton Realty.
We'd be happy to help you find the perfect rental property to purchase.
To learn more about properties in the Hilton Head Island and Bluffton area, contact us online today or call 1-843-785-9500.Posted by Derek Holland on