Sunday, February 10, 2013

Becoming an owner at HHR - Updated!

This is a previous post updated for 2016!

New owners are buying into Hilton Head Resort all the time. If you are considering it, I have some personal tips and hints as a long time owner at HHR and a full time Hilton Head Real Estate professional.

Keep in mind all investments can lose money, you need to do your due diligence and make sure buying a beach condo at HHR or anywhere on the island fits your personal situation and investment goals. Seek advice from your legal, financial and real estate advisors. Information provided here is deemed reliable but not guaranteed. All of the information provided here can change at any time.

Please note the official Hilton Head Resort regime website is Our website is a marketing and real estate website provided by Hilton Head Island Realty and Rentals.


#1 - What do you get when you buy a villa at Hilton Head Resort?

You own the condo. Everything from the wallcoverings and floorcoverings in belongs to you. Everything inside the walls including the walls belongs to the Condo Association. You can live in it full time, retire in it, rent it as a vacation rental, rent it as a long term rental, rent it to the summer intern programs or just use it for your own personal beach getaway. It can sit completely empty for as long as you own it, if you so choose. It's not a timeshare - it's your personal deeded property.

Even though the master deed does not allow timeshares, there are a few "partnership units" where the units are split up into for example quartershares, fifth shares or 1/13th shares. A 1/13th share gets you four weeks per year, usually one week per season Winter-Spring-Summer-Fall. Quartershare owners get 13 weeks each year. Partnership units typically prohibit their partners from renting their weeks to the general public.

#2 - What are the monthly and annual expenses to own a condo?

A monthly regime fee is charged to each and every condo owner at HHR to cover the operating expenses of the resort. These vary depending on the square feet of the unit. For 2016 a standard 2br is $453/mo and a 3br is $608/mo. The extended 2br units with 950 sq/ft pay $502/mo. Regime fees are based on square footage. (The $453 monthly fee includes $80 for capital reserves, $608 includes $108 for capital reserves and $502 includes $88 for capital reserves.)

You will also have property taxes which vary depending on the County Assessors Office appraisal. See for information about property taxes. We've seen these range from $850-$1700. Owner occupied condos pay tremendously reduced property taxes, often discounted over 50%!

Electricity runs approximately $60-$150/mo depending on season, usage and age of the appliances and A/C system of the unit. 3br and extended 2br units will be more, of course, especially due to the Washer/Dryer. If you are planning to be a snowbird, consider the fuel savings of moving south for the winter. The local electric company is Palmetto Electric Coop. (

Telephone service is approximately $36/mo from Hargray. (

Content and liability insurance is necessary to cover the interior of the condo. The resort's insurance will rebuild the structure and restore the individual units to "as built" condition including the built-in appliances and cabinets. Your personal insurance will need to cover the personal contents, appliances, carpet, etc. It will also help protect you from any liability or medical claims by your guests.

#3 - What's included in the monthly regime fee?

The regime fee covers Water, Sewer, Cable TV, High Speed Internet, Pest control, trash pickup, 24 hr gated security, onsite management, exterior maintenance and housekeeping, landscaping, 2 outdoor pools, 1 indoor heated pool, golf cart shuttle to the beach, hot tub, sauna, tennis courts, badminton court, picnic area, fitness center and hurricane, flood, fire, hazard and liability insurance for the buildings. Insurance is the biggest expense of operating the property. The monthly fee also includes capital reserves to cover renovations and maintenance of the entire resort. These reserves go into a separate account and are used for items such as building paint, roofs, walkways, pools, tennis courts, parking lots and elevator repairs and replacement.

#4 - Why is the regime fee so high?

Actually for an oceanside resort with onsite beach access, we are one of the lowest regime fees on the entire island. When you are this close to the ocean, the hurricane and flood insurance is very high. Fortunately, we've seen our insurance premiums drop over the past couple of years. There are 468 condos all sharing the same expenses which helps reduce the amount we all pay as our share.

#5 - I'm planning to do vacation rentals. How much money can I make?

It depends and these are just estimates based on my own experiences. A super nice condition direct ocean view unit in building one and two can do $850-$1000 per week in season. A nice building three 2br unit might only do $600/wk in prime season. Of course, the purchase price of the ocean view unit will generally be much greater than any other units with lesser views. It's all about the view, the condition and proximity to the beach.

Best bet is to go out to and and check the weekly rental rates of other Hilton Head Resort owners with similar units near the one you are considering a purchase.

For rental purposes, the general rule of thumb is that ocean views rent highest and are #1 for rentability, building one and two are the next most desirable units regardless of view, building four comes up third and building three is generally the least desirable because most of the units have interior porches overlooking the indoor rec center. 3 bedroom units command a premium because of the extra square footage, washer/dryers and they can sleep up to 10 people (eight adults max). The 2 bedroom units sleep up to 8 people (six adults max).

Of course each unit is individually owned and each owner can set their own personal limits up to the resort maximum and the bed configuration. Some units might have only enough beds for four people.

It's the owner's choice.

The more effort you put into advertising, online, rental by owner websites, ebay, Craig's List, newspaper ads, local bulletin boards and church bulletins, etc, the more likely you are to have a successful rental season. Getting 5 to 9 weeks of rentals are pretty easy. 20-30 weeks of rentals will require a lot of effort.

Every owner gets a free rental ad on on the Owner Rentals page and we also have an email forum where all the owners can share rental leads when they are already booked.

#6 - How about long term rentals?

A typical 2br at HHR rents for $750-$850 unfurnished and $800-$1000 furnished on a 12 month lease. Of course each owner can set their own rates based on condition, view and whether utilities are included, etc. Rental rates have been going up since the Great Recession. The resort has very strict rules for long term rentals and requires background checks on all long term tenants.

#7 - What's an intern rental?

Interns are summer workers and students studying hospitality curriculm from all over the world. For example, the Westin will bring in students on internships during the summer and they will rent an HHR unit for 2 to 4 students (in a 2 br). We also house many of the lifeguards that are brought in to man the Hilton Head public beaches, rent chairs, umbrellas and water toys, etc.

The intern programs usually pay a certain amount per student, per week. If you house four interns @$90/wk for 13 weeks from June 1 to August 30, that will pretty much pay your regime fees for the entire year. Some interns stay from March 1 to September 30 for even more income. This is a great option for snowbirds that want their expenses covered in the summer season and then get to use it only for themselves in the winter season. We are also seeing the hotel resorts lease units on a 12 month basis just to insure they have enough housing on the island.

#8 - Are there any gotchas?

Special Assessments are sometimes required to do major renovations and repairs. HHR went through a major renovation period from 2006-2011. Each owner averaged over $18,000 in assessments over these six years to repair and replace all of the roofs, mansards, paint, flashing around windows, new exterior porches and railings, resurfaced tennis courts, renovated indoor rec center, renovated pools and the awesome new boardwalk to the beach with the golf cart shuttle.

Every condominium complex needs to maintain and renovate the buildings and grounds on a periodic basis, they either collect the money along the way with a capital reserve funded by monthly capital reserve payments or they do special assessments as the need arises. The regime at Hilton Head Resort collects $80/$88/$108 per month for capital reserves depending on which size condo you own. The plan is to NEVER have a huge capital assessment ever again.

Note that it is also possible to have a special assessment due to an insurance shortfall, special emergencies or even an operating income shortfall.

Be aware PETS are absolutely NOT allowed at HHR. ADA service animals are not considered pets.

Come join us as owners at The Hilton Head Resort!


Feel free to contact me privately if you have any specific questions about these or other HHR topics. Your personal realtor can also provide you with further information and answer your questions. This information is provided for planning purposes only and your performance may vary significantly.