Hilton Head Second Homes
Are Hilton Head Short Sales For You?
A wide variety of Hilton Head homes and villas are listed as short sales today.
What Is a Short Sale?
Short sales are abundant among Hilton Head real estate listings these days but many buyers do not know what they are.
A ‘short sale listing’ is one that has a market value less than the mortgage owed plus closing costs. In other words, the owner owes more than the home is worth.
To sell, the property must be listed for less than the mortgage amount plus the closing costs and whoops! – the seller will owe money at closing, not receive money. Some sellers are ready, willing and able to take the loss and if so, that’s not an issue for the buyer. However, if the seller cannot take the loss at sale, the bank must agree to take the loss with the motive of avoiding a foreclosure. I see more and more properties listed today as short sales with large losses that banks are not willing to take outside of the foreclosure process.
Short sale listings can be uncertain for both the buyer and the seller because many sellers do not know if their bank will allow the short sale to occur! The Seller and seller’s agent can lead a buyer on with the hope of a low-priced sale that will probably not happen because:
- the bank is not willing to take a short sale loss.
- the seller will not or cannot pay any part of the loss to the bank.
- the seller has not demonstrated an acceptable hardship to the bank.
- the bank begins foreclosure before a short sale offer comes in.
- the bank may prefer foreclosure rather than a short sale.
For these doomed short sale listings, a buyer who makes an offer can wait for an acceptance from the seller’s bank that does not come quickly or at all. While waiting, the buyer can miss out on other good buys are can be sold without delay.
Recently I have seen listings where the agent has written to other agents: ”Don’t waste your time. The bank does not respond”. Recently I called an agent to ask about his short sale listing and had it gone to foreclosure because it was listed so long ago. He told me that that bank had refused to respond to good offers for the property and that he should probably withdraw it from the market – but it was still listed as a short sale. The property was withdrawn soon after our discussion and other short sales are withdrawn when agents learn that they are wasting their time and ours for various reasons.
When owners do not make mortgage payments for 90 days, banks usually begin the foreclosure process. This can further complicate a short sale negotiation and some banks have one division to deal with distressed properties and short sales and another division that deals with foreclosures. The short sale division may not be able to discuss a property during the foreclosure process and finally, the bank often prefers to foreclose rather than agree to a short sale. Sorry- I can’t explain this fully but I know that it happens. During the time that a property has gone from being a short sale to a foreclosure, it still owned by the seller and remain on the market listed as a short sale!
Get The Facts Before OfferingThis is not to say that short sales do not happen or that they are always a waste of time or that you should not be interested in them. But, before you take your time to offer on a short sale listing, you should try to find out:
- If the loss that the owner and/or bank must take to allow the sale is large or small.
- Has the bank agreed to take the loss and allow the sale?
- Is the Seller willing and able to take some of the loss?
- Has the bank started foreclosure on the property?
The answers to these questions will tell you much more about how much uncertainly you can expect with an offer. You don’t want to waste your time on a shaky short sale while another desirable property that you could have had sells to someone else. As always, a good agent can investigate and hep you evaluate the situation and the options available to you.
Receive All Hilton Head Area Short Sale Listings Without Cost or ObligationIf you would like to have a list of short sale properties, foreclosures or other properties, without cost or obligation, please let me know.
Richard Kadesch, Owner and Broker-in-Charge
The Gated Community Specialist ®
Go Gated Realty ®
Hilton Head Island, South Carolina
Rich@gogated.com
www.GoGated.com
1-800-333-5025
Read Some of My Clients’ Success Stories
Hilton Head Investment Properties
This Tabby Walk two-bedroom villa @ $69,000 has monthly carrying costs of only $619 including the regime fee and 30 fixed rate mortage @ 5% interest.
Hilton Head real estate has always been a popular place for investors to put their money during the 34 years that I have been an Agent on Hilton Head Island and before, I am sure. The classic story about Hilton Head investment is how ocean front lots once cost only $10,000 that some people considered expensive and risky but are worth millions today.
Investors Want Cash Flow and AppreciationI have worked with many investors who buy inexpensive properties not for their personal use, but to rent for carrying costs while the property appreciates at 5-6% per year. Investors typically buy to hold and not flip, to sell the property down the road for retirement income and possibly hold one for future use as a primary or second home. In the future, baby boomers in retirement may choose to occupy an inexpensive condominium fixed up nicely rather than take on the cost of a much more expensive home. My own parents downsized homes twice in their retirement on Hilton Head Island before downsizing again to a condominium and then finally, to continuing care.
The Fitness Center at Woodlake Villas. The monthly carrying cost of a Woodlake Villa that costs $79,000 today would be only $694 with regime fee and 20 % down and 30-year fixed rate mortgage @ 5% interest. Rents are $800/mo and up.
Investment Property Prices Have Been Too High
When real estate prices topped out locally in 2005-2006, prices became unsustainable and disconnected from the their rental incomes. Now, prices have fallen to levels not seen in at least 9 years. The ’round trip’ brings prices that cash flow once again with 20% down, a tenant who pays a reasonable rent and including the cost of professional rental management. Two examples of investment properties at Tabby Walk and Woodlake Villas follow later in this article.
What’s an Investment Property?Real estate investors want:
- Cash flow
- Appreciation
- Tax benefits
- Use benefits (optional)
Issues with investment properties are:
- There has not been any appreciation in the last few years and just the opposite, prices have fallen by large numbers. The market for Hilton Head investment properties has become ‘cold’.
- Typically, the more expensive the property, the greater the negative cash flow. Often, inexpensive residential residences have the potential to carry themselves with 20% down, before tax benefits, with a tenant who pays reasonable rent and with the costs professional rental management. This market has made the ’round trip’ with prices and costs. The arithmetic is attractive again on some of these inexpensive villas.
- Vacation rental properties and second homes have negative cash flows unless the buyer pays all or mostly cash. To offset the negative cash flow, appreciation, tax benefits and use benefits are desired. Lack of appreciation has made the second home and vacation rental market go ‘cold’ with no thaw in sight soon.
- Investment properties have specific issues about rental income, tax benefits and location that are unique. Go Gated Realty can help you understand these issues and protect your interests.
Consider #706 Tabby Walk, a two bedroom, two bath unfurnished Tabby Walk Villa for sale today with Go Gated Realty for $69,000. Just two years ago, the owner tiled the living room, dining room, kitchen and hallway floors, installed new bedroom carpet, bought some new carpet, painted the interior and made other improvements. They want to sell now for personal reasons.
With 20% down, a loan with 5% interest over 30 years the monthly carrying cost is only $619:
- Principle and interest of $296.
- Monthly regime fee of $323.
This property cash flows with a monthly rent of only $700 and it rented most recently it for $750. This villa has 1,030 square feet of living are and it is a first floor flat, with no steps. Pets are allowed. Tabby Walk on Hilton Head Island has a community swimming pool. The next-lowest priced two-bedroom Tabby Walk for sale today is listed @ $94,900.
This is the kind of residential investment property that is attractive to many tenants and could be perfectly suitable for an investor to use in the future as a personal primary or second home. The mid-Island location is a short drive to the beach and near the hospital, library, airport and all mid-Island shops, restaurants, banks and other offices.
The living room with fireplace of a Woodlake flat, an unfurnished long-term rental property with Go Gated Realty.
Popular Investments: Woodlake Villas on Hilton Head IslandWoodlake is another popular residential community located mid-Island, now with security gates. Prices start today from about $79,000 and prices then bounce to about $97,000. With 20% down the monthly carrying cost for the $79,000 listing would be $694:
- $339 Principle and Interest @ 5%, 30 year fixed
- $355 Regime fee
The fair market rent at Woodlake today is $800/mo and up. Go Gated Realty long-term rental manages about 25 Woodlake Villas today. Woodlake Villas are both flats and townhouses with about 1,025 square feet and most have fireplaces. Pets are allowed. Woodlake has a community swimming pool, tennis courts, a playground and a fitness center. It is a five minute drive to the beach and near all mid-Island locations that include the hospital, library, airport, shops, banks and offices.
Hilton Head Long-Term Rentals and Go Gated RealtyGo Gated Realty is a sales agency but also a long-term rental agency that knows the Hilton Head Island rental markets and has the knowledge that an investor needs to determine the best investment property for sale today. There are other invesment properties in addition to the ones discussed in this article.
Your Buyer’s Agent on Hilton Head IslandBuyers of vacation rental properties, primary homes or second homes are also well served by Go Gated Realty as your Buyer’s Agency on Hilton Head Island, but the issues and needs for buyers of these properties are different than those of ’pure’ investors.
To discuss your real estate needs, please contact Richard Kadesch, the Gated Communities Specialist today!
Richard Kadesch, Owner and Broker-in-Charge
The Gated Community Specialist ®
Go Gated Realty ®
Hilton Head Island, South Carolina
Rich@gogated.com
www.GoGated.com
1-800-333-5025
Read Some of My Clients’ Success Stories
Woodlake Villas on Hilton Head Island Adds Security Gates
The new security gates at Woodlake Villas on Hilton Head Island will close every evening and on weekends.
Woodlake is among the Island’s most popular economical residential communities with flats and townhouses priced from about $79,000, located mid-Island on Hilton Head Island on newly renovated Mathews Drive, across from Port Royal Plaza. Woodlake Villas are each about 1,000 square feet with all ground level entrances. Community features include:
- fitness center
- swimming pool
- playground
- tennis courts
- pets are allowed
- a short drive to the beach at Folly Field
At the same time that Woodlake owners were planning to install security gates to their community, the Town of Hilton Head Island was planning to renovate Mathews Drive. When the Town purchased the land at the entrance to Woodlake to renovate, widen and beautify Mathews Drive, Woodlake owners were given the money to make their security gates a reality and it became clear that they should coordinate the new gates and the renovation of the entrance to Woodlake with the Town’s Mathews Drive project.
The new Woodlake exit. Cars leaving travel slowly and safely.
Now the Town’s Mathews Drive project is finished where Woodlake is located and Mathews Drive has two lanes divided by turning lanes and planted central islands, a traffic circle between the entrances to Woodlake Villas and Port Royal Plaza, raised walkways from Woodlake to Port Royal Plaza intended to slow traffic in the residential area and new walking paths along both sides of Mathews Drive. These improvements to Mathews Drive at Woodlake give the road far more beauty than before the project and much safer for both drivers and pedestrians. The improvements enhance the value of Woodlake Villas and vehicles enter and exit Woodlake much easier and safer than before.
‘In House’ Installation Saved MoneySimultaneous to the Town’s Mathews Drive project, the Woodlake Board renovated their entrance and
The pedestrian gate at Woodlake
installed their security gates. In addition to the money the Town of Hilton Head Island paid to Woodlake owners for land at the entrance to Woodlake, the Board of Directors of Woodlake saved homeowners about $40,000 by installing the gates ‘in house’, including installing the phone and key system and not hiring outside contractors to do the gate installation.
The Woodlake Security Gates Open Three WaysThe new Woodlake security gates will be open during week days but closed at nights and on weekends. There are three ways to enter the gates at Woodlake when they are closed:
- A visitor can call a residence from a phone at the gate to open the gate.
- A card can be scanned.
- A clicker can be used.
A new crosswalk on Mathews Drive. In the background a car rounds the traffic circle at the new entrance to Woodlake.
Cards are free. Clickers cost about $40 each. Cards can be activated and deactivated based on occupancy. There are two cards per villa and $10 per additional card. There is also a walkway along the entrance to the Woodlake to a pedestrian security gate that requires a card to enter.
Woodlake May Attract More Owner-OccupantsCharlie Wetmore, President of Woodlake Board of Directors says that 22% of Woodlake Villas are owner-occupied and the others are rented by tenants. Investors have purchased Woodlake villas over the years because they have traditionally rented well. Wetmore hopes that the new security gates and other improvements will influence more people to purchase Woodlake Villas as their primary or second homes and not just as investment properties. ”That will effect values more than anything”, he said. “We believe that the new security gates and improvements to the entrance will make Woodlake more attractive to owner-occupants than in the past”.
A Woodlake flat with fireplace. Many Woodlake villas have a lake view
It is true that a Hilton Head gated community has benefits for its residents that non-gated communities do not have and that gated communities are perceived by the public to be more desirable places to live. For example, a second home owner who is not in residence for much of the year can know that their property is more secure in a gated community. All residents should benefit when people who do not belong in the community cannot drive in anytime and cause a problem.
Therefore, buyers seeking an economical primary residence, retirement residence, or second home as well as investors may want to consider a Woodlake Villa. Prices start at about $79,000 today. To compare Woodlake Villas to any others on Hilton Head Island, please call or email Richard Kadesch, the Hilton Head Gated Communities Specialist® today.
Richard Kadesch, Owner and Broker-in-Charge
The Gated Community Specialist ®
Go Gated Realty ®
Hilton Head Island, South Carolina
Rich@gogated.com
www.GoGated.com
1-800-333-5025
Read Some of My Clients’ Success Stories
New Solar Panels Heat the Indoor Swimming Pool at the Spa on Port Royal Sound
The indoor swimming pool at the Spa on Port Royal Sound
The Spa on Port Royal Sound is one of Hilton Head Island’s most popular and economical villa communities. The Spa has 268 one and two bedroom villas that are used mostly as second homes but also used as primary homes and rental residences. Today, prices start for less than $100,000.
The community is located on the walking beach of Port Royal Sound. The Spa’s recreational amenities include three tennis courts, two outdoor swimming pools and an indoor swimming pool. The Spa has a 24-hour guarded security entrance. One of the Town of Hilton Head Island’s bike paths comes right along Beach City Road to the front entrance of the Spa.
The Spa has one of Hilton Head Island’s few indoor heated swimming pools. In November, 2008 the Spa finished installing solar hot water panels to heat the pool and save the owners money. General Michael Vassallo says that it has always cost the owners $13,000 every year to heat the pool for six months. The entire installation of the solar hot water panels cost $18,000 and with them, the indoor pool will be heated to 85 degrees all year long. This is a tremendous savings of money to owners every year and one that pays for the entire installation in less than two years.
The solar hot water panels on the roof of the administration building at the Spa on Port Royal Sound. The indoor swimming pool is located in the back of the building with two outside entrances and one inside entrance.
The solar panels are sold and installed by Suncatcher of Atlanta. General Manager Vassallo said that Board Member Frank Deseano played a key role in the choice of Suncatcher for both product and installation.
The indoor heated spa is not part of the new solar panel system because of the higher constant temperature that is required. The management is actively considering another solar panel product for installation that is better suited to heat a spa, according to General Manager Vassallo. He said that management is also studying the potential benefit of having all individual hot water heaters at the Spa connected to solar hot water panels. Now, water is heated by electricity and paid each owner by use as common in most all homes and villas on Hilton Head Island today.
The beach at the Spa on Port Royal Sound is a walking beach that was first renourished in 2006.
Other Improvements at the Spa
In late 2006, the beach was renourished at the Spa for the first time. Michael Vassallo, a former general contractor from New Jersey has been the General Manager at the Spa since February of 2007. He said that in 2007, the Spa renovated the large outdoor swimming pool. The smaller, outdoor swimming pool is scheduled to renovated in 2009.
Vassallo says that the exteriors of all building are scheduled to be painted by the end of 2009. While this plans are not yet final, he says that the painting will require about $2,500 per owner to be paid by special assessment, probably over three years. This is important information for buyers at the Spa to know in 2009.
Financially Strong and StableVassallo says that the Spa has about $200,000 in reserves and that the Spa does a good job of controlling costs. He says that there will not be any increase in the regime fee for 2009. It will remain $320.43 per month for a two-bedroom villa.
The $320.43 per month regime fee includes insurance for hurricane, fire and flood - $148.62 of this $320.43 total. Also included is basic water and sewer, basic cable television, trash pick-up, general building and grounds maintenance, landscaping, the use and maintenance of the recreational amenities, the common electric service and general management of the community.
The swimming pool and bath house closest to Port Royal Sound. The villas at the Spa are all one or two-bedroom flats.
Villa Sales at the Spa on Port Royal Sound
New development close to the Spa includes the Town’s Fish Haul Park and the new housing community of Beach City Place at Mitcheleville. To review villas for sale at the Spa and to compare the location with any other, please call or write me, Richard Kadesch of Go Gated Realty, the Gated Communities Specialist of Hilton Head Island.
Richard Kadesch, Owner and Broker-in-Charge
The Gated Community Specialist ®
Go Gated Realty ®
Hilton Head Island, South Carolina
Rich@gogated.com
www.GoGated.com
1-800-333-5025
Read Some of My Clients’ Success Stories