If the home that you buy on Hilton Head Island is not going to be your primary residence--Beware! No only will your property taxes be higher, but you will be totally responsible on your property tax bill for 100% of school operating costs. Resident homeowners pay nothing on their property tax bills for school operating costs. They do pay an extra penny on the dollar in sales taxes which is supposed to go toward school operating costs instead. However, so do second-home owners when they are on the island. Also, everytime that there is a sexual abuse lawsuit against the school district, second-home owners will be assessed the damages on their annual property tax bills. Resident homeowners will pay nothing on their tax bill.

Believe me, there are better places to own a vacation/second-property than South Carolina. I have had a vacation home there for 19 years now, and I deeply regret my decision to buy in Beaufort County, South Carolina.

John:

Regime fees are about $350/mo and insurance for hurricane-fire-flood is about $100/mo. Sometimes these payments are combined and sometimes they are not. Electric will be about $100/mo; water and sewer about $60/mo. If you are in a plantation the annual POA is about $1,000. Your annual, county property tax will depend on the appraised value for taxes and this will depend on the cost of your property. Estimate your property tax at $700/$100,000 of purchase price. These numbers are approximate but can be given exactly and much closer when we are talking about any specific property.

Because you ask about management fees and regime fees, I'll assume that you want a vacation rental property. The vacation rental commissions on Hilton Head are generally 25% but they are more negotiable for oceanfront properties and can be a bit more for some convention rentals.

Closely related to the annual expenses that you ask about are the tax savings you may get from owning vacation rental real estate. Remember that when you finance a property with a standard 20% down, you will have a considerable negative cash flow. Owners want to offset this negative cost with tax benefits as much as possible. Your use benefit and appreciation are additional benefits to consider. I am not qualified to give tax advice and you should talk with your financial and tax advisor about whether you can use the tax benefits offered by vacation rental real estate. If so, those benefits are very important in how the purchase may make sense for you. If not, you may be unable or unwilling to carry the negative cash flow that accompanies financed vacation rental properties.

If you can use the tax benefits, the interest on your bank payment will be deductible as will be the property's depreciation. Your use benefit is the money you save by vacationing in your own property and not paying to others. Appreciation is what we expect over time but it is not guaranteed in the short term as we have seen in these past few years. In the long run, the appreciation of the property compared to your down payment should give you financial satisfaction.

Please visit my web site at any time to search all MLS listings in the Hilton Head area. I will be happy to assist you as your Buyer's Agent on Hilton Head Island to find the property and community that you want. I am the Hilton Head Island Gated Communities Specialist ®.

Hi John,

In addition to the costs of normal ownership - Be sure you find out about any upcoming assessments or transfer fees involved with the purchase. You should also ask the property manager about any deferred maintenance that has not been assessed but may be on the horizon.

John,

On the surface, that sounds like a simple request. However, there are many variables to consider before answering. Things like location, size, gated community or not, short term rentals or long term, etc.

Happy to help you get your answers, and it can be done straight away once we have some specifics ro work with. Look forward to hearing from you.

Bill Brannon, Hilton Head Island, SC

Hi John,

It really just depends on the property because fees are all over the board depending on the age, location, type of construction, property manager, what's included in the regime, insurance costs, type of ownership, etc....

A rule of thumb is that if you put a desirable property on the rental market (and don't use it but 2 weeks per year), it should cover all the costs of ownership with the exception of your financing. In a nutshell though, you have to look at each on a case by case basis. If you'd like to email me, I can send you some specific examples.

John, The regime fees range from $200. - $450.00 depending on ocean orient or ocean front. Property Mang. is 25% of gross rentals, Insurance for a property priced @250- $350k - $2000. Ocean front Villas $6000.00 Valued at $1.5 M ............Water is included in reg. I have a 2B, 2B, 2nd Row Ocean Villa in Palmetto Dunes Resort completely updated with granite, tile, new and beautifully furnished listed @ $579,000 Insurance is included in regime..... for more inf. jim@jameskeillor.com