Have you ever dreamed of owning a house by the beach? Or do you want to strengthen your financial situation by investing in a rental property? If so, then buying a vacation home in the Charleston, SC area might be right for you. Here are the reasons why it’s smart to do so, and some tips on how to get it done.
Why Buy a Vacation Home in Charleston, SC?
Here are three good reasons to consider buying a vacation home in the Charleston area.
- Real estate is a good investment in general.
It’s true that the real estate market can fluctuate, and recessions like the one in 2008 can drastically affect the value of real estate in the short term. However, real estate is still considered a smart investment – beachfront property especially – as real estate in most areas increases in value over the long term.
Whether you plan to use a vacation home yourself and sell it for a profit in the future, or you want steady rental income throughout the year, buying a second home can be a savvy financial move when done right.
- Real estate is an especially good investment in the Charleston area.
Home sale prices increased substantially from 2020 to 2021 in the Charleston area:
- Kiawah: +41.6%
- Isle of Palms: +38.0%
- Sullivan’s Island: +26.7%
- Daniel Island: +29.8%
- Downtown Charleston: +6.1%
The market has certainly been hot recently, and while it might cool a little, Charleston area real estate is expected to continue to gain in value. This is one natural consequence of more people moving to the area. The population of the South is projected to grow by 50% or more in the next 20 years (compared to just 4% projected growth in the Northeast), which all but guarantees that property values will continue to climb.
- For the lifestyle.
Imagine owning a beautiful second home that you can bring the family to for a last-minute getaway or retreat to for the summer or winter. It’s a place you can call your own, and a place to make lasting memories with the family. This is the lifestyle aspect of owning a vacation home, and it’s a major reason people buy one.
It’s not just retired snowbirds escaping cold winters up north taking advantage of this lifestyle, but people working remotely, too. As many realized they could effectively work from home during the pandemic, they prioritized lifestyle over a location close to the office. This means that more people than ever are using vacation homes as an extended refuge, spending months rather than weeks in their second home. This kind of freedom is something special about owning a vacation home.
Why the Charleston area specifically? Because it’s a truly special area. It’s not the only city on the coast, but it is the only one with its unique history and charm. The architecture, culture, historical sites, food, friendly people, and, of course, the beaches and the sunny weather – it has everything you’d want in a location for a vacation home.
How to Buy a Vacation Home in Charleston, SC
Now that you know why buying a vacation home in the Charleston area is a good idea, here are some of the hows and things to consider. Buying your dream vacation home is exciting, but purchasing property is always an important decision so don’t let enthusiasm cloud good judgment.
- Work with a real estate agent.
Contact a real estate agent early on in the process. An experienced agent who knows the area well can help you not only identify individual properties you might be interested in, but give you valuable advice that can save you time and help you spend your money smarter, too. No matter where you’re at in the process, I’d love to help – call me at 843-806-7222.
- Keep money in mind.
As discussed above, real estate is generally a great investment, particularly vacation homes in the Charleston area. But don’t forget that vacation homes cost money beyond the mortgage. You’ll need to pay for upkeep, insurance, and taxes. In South Carolina, the tax rate on a second home is 6% rather than 4%, and the IRS has different tax rules for second homes, too. If you don’t live nearby, you may also want to hire a property management service to handle maintenance and the logistics of renting out your home.
Don’t let any of this scare you. But do keep it in mind so you can find a vacation home that works with your budget. Knowing this will help you and your agent zero in on the right property for you.
- Determine your purpose.
Do you want your vacation home to mainly be a retreat for you and your family? Or do you plan to use it primarily for rental income? Knowing this will help you target properties that are ideal for you.
If you mostly want to use it for rental income, for instance, you might look at buying a vacation house located near the beach on Isle of Palms or in downtown Charleston, both of which are always in high demand. If it’s mostly for your own family to use, think about what lifestyle you want – do you want to be steps from the beach, or is it more important for you to be closer to a wider variety of shopping, activities, and restaurants? Discuss this with your family to get their input, too.
- Look into regulations.
This is something your real estate agent can help you with. Different cities and towns have different regulations about renting out properties; same with HOAs. For instance, the Isle of Palms is very renter-friendly so it’s a good place to buy a vacation home for rentals, while Sullivan’s Island is less renter-friendly, with ordinances that make it a poorer choice if you want to rent out your home. Similarly, if you buy a condo, some HOAs prohibit owners from listing their properties on short-term rental sites like Airbnb or VRBO.
You need to know these things before getting your heart set on an area or a specific house, as regulations can derail your plans. Again, your real estate agent can help with this.
Looking to Buy a Vacation Home in the Charleston, SC Area?
My name is Kenton Selvey and I’m an experienced Realtor® with William Means. I help people buy and sell homes and vacation homes on Isle of Palms, Sullivan’s Island, Charleston, Daniel Island, Mt. Pleasant, James Island, and beyond. I’m ready to help you find your dream vacation home. Call me at 843-806-7222 or email me here. I look forward to hearing from you!