I was recently in the SC “lowcountry” and saw tremendous growth around Bluffton/Beaufort (near Hilton Head). Some nice homes there for reasonable money - anybody investing there? Any idea how the rental market is? Thanks
I’ve done some looking at that market as I got some buddies “on the ground” there. Along the coast, there has been massive appreciation in the last few years that makes it look like a speculators market at this point. There also appears to be a lot of people buying vacation rentals, going cash negative, but using income to off-set expenses aganst their vacation home. This can be a tricky game tax-wise and means your only profit is made in hopes of selling at some higher price inthe future. As for regular rentals, I have looked in the Charleston area and did not see anything that was very exciting (or cash flow positive for that matter).
Also, you have to watch out as SC has an “investor tax” whereby non-owner occuiped is taxed at a rate 50% higher than O/O. Also, word on the street is insruance rates are going to take a big jump in the coastal areas due to recent hurricanes. Thus when the policy get re-written when you buy, your rate could be much, much higher than the older owners rate.
That’s my thoughts after looking into this market in summer/fall of '05