A guide to Hilton Head Island and Bluffton area real estate, rentals and lifestyle
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lee@beachclubrealestate.com • www.islandstops.com Buyer's Agent Working Exclusively for You!!! (At No Cost to You) Lee Simmons Broker Associate 843-301-5745 Come make an island your home! With over 30 years of real estate sales experience, let me show you Hilton Head Island and how it could become your "Island home"... lee@beachclubrealestate.com • www.islandstops.com www.CallenIns.com 843-681-2221 1036 William Hilton Parkway | Hilton Head Island, SC 29928 Call for your Free Home Quote Primary/Secondary/Rental Properties Are You Prepared? Callen Insurance Services Homeowners • Auto • Boat • Commercial • Life • Health Ask for Free Consultation for Retirement Income Planning Estate Planning Long-term Care Life, Disability and Health Insurance You've vacationed here for years, and a er enduring a long- distance love aff air with the island, you've made the decision to buy. Now it's not whether to purchase Hilton Head real estate, but what. Welcome to the Villa vs. Home debate. In addition to the obvious diff erences such as square footage, proximity of your neighbors and ease of ownership, here are the pros and cons of villa ownership. WHAT'S A VILLA REGIME? Regime is a general term that refers to a system of governance. e word is interchangeable with HOA, which describes the specifi c type of elected body typically made up of property owners, that governs island villa complexes. is association enforces villa bylaws, levies fees and assessments for maintenance and upkeep of common areas, creates a budget, and insures the structure against liability, fl ood, fi re and other hazards. WHAT'S THE REGIME FEE? To make a fair comparison price-wise between villa and single home ownership, examine the amount of the villa's monthly or quarterly regime fees and everything it covers. ings like waste removal, exterior insurance, common area maintenance, pest control, cable TV and more are all common inclusions in a villa's monthly regime fee. But do your homework! On Hilton Head, regime fees and services vary greatly between villa complexes, and even within villa complexes of the same name. Your neighbor's regime fee may cover the cost of cable. You on the other hand, may need to call the cable guy. Villa regime fees are designed to cover the expenses deemed necessary to protect the investment of the entire complex. In addition, you may opt to pay the same fees - or higher ones - for similar services with single family home ownership. But a regime's mandatory deck repairs, landscaping or trash removal are a single family homeowners choice, versus a requirement. IS MY REGIME FISCALLY SOUND? is is vital when making a villa buying decision. Your realtor can be pivotal in helping determine whether a villa regime is fi nancially healthy. MLS realtors have quick access to regime documents and fi nancials. Why does this matter? If you love a particular villa and its price, take a look around. Are the ground kept up? Are the pool and tennis courts clean of debris? Are the sidewalks safe? If the answer is no, dig a little deeper. A regime should have suffi cient funds in its capital reserves to adequately manage the surrounding grounds and common areas, as well as prepare and pay for unforeseen weather related issues. If it doesn't, an assessment could be coming. IS IT REALLY FEE SIMPLE? And to further confuse buyers, there's always fee simple villa ownership. Fee simple almost always means a) the monthly regime is on the lower side and b) you are responsible for the exterior maintenance of your villa. Although you will still pay a monthly fee, it generally includes only the coverage of common area maintenance of the land on which the villa complex is built. BY THE BOOK AND BY THE BYLAWS Villa ownership also comes with a specifi c written set of association bylaws - Covenants and Restrictions - designed ultimately to protect the property's value, thereby protecting the individual interest of each villa owner. Bylaws also vary widely within villa complexes on Hilton Head and can address things such as parking, pet ownership, short and long-term rental opportunities, exterior landscaping, and virtually anything else the governing owners vote upon. If you live in a private or gated community, these regime restrictions are in addition to existing community guidelines enforced by your plantation POA. SECURE YOUR 'FOR SURE' LENDER. Most lenders have slightly diff erent and sometimes more strict lending guidelines for underwriting villa mortgages, especially when it comes to FHA and VA loans. If your complex does not qualify for an FHA loan, this means you would need to pay cash or obtain a conventional loan to buy. In turn, this restriction could aff ect the number of available buyers who can buy the villa when it comes time for you to sell. Some Hilton Head complexes are not approved for FHA or VA loans because the occupancy percentage of owners vs. tenants exceeds 50 percent. In other words, if you're an investor looking to buy a villa for solely rental purposes, bring your personal checkbook. For more information about Hilton Head Island real estate, or to see Lynne's TOP 10 favorite villa buys, contact Lynne directly @ 843.384.5426. by Lynne Riggs Anderson Villas vs. Homes: e Pros and the Cons 12