Thursday, January 27, 2005

MYRTLE BEACH REAL ESTATE IS HOT!

The Myrtle Beach Real Estate Market is Hot!
Join the Splash!

Marilyn and I own resort rental properties at Myrtle Beach, SC. In recent weeks, our rental office staff has been approached regularly by realtors who call to list our vacation properties for sale. They report that available oceanfront real estate is at record lows. The Horry County Homebuilders Association confirms that this decrease in inventory is driving prices of available oceanfront real estate upward. The news is great for property owners who purchased a few years ago—prices have soared. The question arises, should one buy a second home now in anticipation of further increases? According to Carolina Association of Realtors, oceanfront property values increased 44 percent between 2003 and 2004. With available beach front property scarce, the Association and private realtors forecast that price trends will continue.

CAUTION!
Caution is always the word in regard to hot markets. Those who buy rental properties may bite off more than they can chew. Few investors realize how extremely high the over-head expenses are for resort rental properties. Many absentee owners discover that they receive thirty cents or less of each rental dollar paid! All owners discover that sales taxes, property taxes, owners associations’ dues and other expenses for a second home are higher than for a first home. Capital gains on beach property can be very large, however, operating loses can be large too.

On the other hand, owing at the beach is a great source of pleasure. Marilyn and I have years of family memories that are priceless. The key is to find the way to own while eliminating the rental over-head expenses. We have researched this question ad nauseum and believe the best way to own a vacation home is in partnership with nine other families. Many folks reject the idea because it sounds like a time share. However, our experience is that 10% vacation owners are a happy group. Owners of 10% shares tend to be very pleased with the total package of benefits they receive. Marilyn and I purchased our first beach property in 1973. We operated our resort rental business for 18 years. We have learned much about owning beach front real estate and would like to share our knowledge with you. You really don’t need to buy a second home at the beach unless you are going to live in it 60% or more of the year; if the property is used any less then an ownership share makes more sense. The absolute smartest way to lower the cost of a second home is to share ownership. Not a time share, but ownership with nine other partners.

GOLDILOCK'S SIZE
Why buy in 10 percent increments? A ten percent share is just the right size. Time shares have too many owners and less than ten owners pay too high a price. Ten owners all get plenty of beach time and avoid the very high rental over-head expenses. The costs of a second home at the beach is very expensive, however, by sharing a home with nine other owners the costs are reduced to below the cost of renting the same property! It’s the same adage as, “divide and conquer.” Ten owners share in the purchase and maintenance cost and in the ownership benefits. Owners share the costs of bikes, beach umbrellas, a movie library, baby cribs, beach toys and more, as the partnership envisions. Additionally, owners do not want to spend their vacation time performing maintenance tasks. Partnership groups handle these tasks corporately so time spent at the property is truly a vacation. The partnership is set up so owners receive up to 10% of the rental value each year. Weeks are weighted by rental value. One owner may choose the entire month of January while another chooses a spring break week in March for the same value. Partners are surprised at how inexpensive a second home can be and at how available it is.

UNSURPASSED
After much research, we chose Kingston Plantation for our second home. For 18 years, Kingston Plantation’s dedication to excellence has never wavered. This beautiful 145 acre resort, offers the finest in beach location (the number #1 rule in any real estate investment), oceanfront swimming pools, a four star hotel, oceanfront boardwalks, onsite restaurants, a water park, spacious accommodations and unsurpassed access to grocery stores, shopping, golf and theaters. Marilyn and I are retiring from our rental business but a partnership group has formed to buy unit 409 South Hampton and three other families are looking for partners to buy unit 805. My family plans to purchase one 10% share in each property. Marilyn and I are blessed that each of our daughters has purchased a 10% share at the beach. We live each day with hope of seeing our kids and grandkids enjoy their second home for many years to come. Because these are second homes, one should buy them as such with the knowledge that any investment return achieved will be a bonus. The good times and lasting memories with family and friends are what the beach is all about. Should you have interest in more information, let us know; we can put you in touch with the partnership groups. We invite you and your family to make a splash at the beach.


1 comments:

Joane Morris said...

Hi,
I come across your blog.You said that real estate market is hot.
An improving real estate market along the Grand Strand could pick up steam this year if consumer confidence doesn’t take a hit from a slowing economy.
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Miami Beach Real Estate