Real estate investing on island makes a lot of sense

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Buying a rental property on Hilton Head Island is a smart investment. For starters, the return on investment is better. Why settle for 1 percent from your bank, when you can get more from a good rental property?

Additionally, low interest rates, good property values and high rental demand (both long-term and short-term) enhance the HHI investment appeal. There are many affordable real estate investment opportunities on the island.

These days, when managing your money, it is important to invest in income streams that give you a positive cash flow, leverage your debt, control your financial assets, and prepare to deal with inflation.

Even though we might not be in an intense inflationary market right now, the cost of goods and services are still going up. We are paying more for food, utilities and insurance - just to name a few.

So earning more money makes sense, and I believe that it's a good idea to add properties that produce income to your investment portfolio.

Here are five reasons why buying Hilton Head real estate is a smart investment:

  • Continual cash flow - A positive income stream, this is higher than bank earnings, pays for the property and might be used for other expenses as well.
  • Appreciating asset value - Smart real estate investing allows you to buy more assets with less money, multiply asset value, and increase equity as loans are paid down.
  • Hedge against inflation - With property values rising over the past three years, real estate investing is once again a good bet in beating inflation.
  • Favorable tax advantages - Tax benefits for real estate owners include: mortgage interest deduction, accelerated depreciation on certain items and deduction of expenses related to managing the investment property(s).
  • Real financial assets - Income-producing real estate is an asset that has meaningful value. Both land and building have value, and the income that is produced has value to current and future investors.

Important note: When investing in real estate, I strongly suggest that you obtain additional advice from your attorney, accountant and-or financial advisor on the specifics and how it will help your portfolio. And, keep your investment eyes on Bluffton as well.

Carl Schroeder, 2014 Hilton Head Realtor of the Year, is a Realtor and associate broker with Foundation Realty. He has been serving the Hilton Head area since 1976. Carl@hargray.com.

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