13 May The Ultimate Guide To Buying A Retirement Home On Hilton Head
Successful Keys To Retirement Bliss
You’ve saved for years, paid your dues, made a few wise investments, and maybe you’ve even gotten the kiddos to be self sufficient! Now, retirement is actually a reality! You need a place to live, and heading south seems like the sensible thing to do. The list has been narrowed down, and you’re ready to call South Carolina home.
There are several cities in South Carolina that consistently rank well for retirement locations, but one town always makes all the major lists. From Forbes to Marketwatch and several publications in between, most agree that Hilton Head Island is a prime spot to enjoy retirement. However, you can’t just pick a top choice from some guide, pack your stuff, and head off into the sunset. There are still a lot of things to think about and decisions to make. In our Ultimate Guide To Buying A Retirement Home On Hilton Head, we are going to look at twelve things to consider when making Hilton Head Island your new home.
1- Hire The Right Real Estate Agent
First and foremost, no matter where you move to, you want to use a licensed Realtor. There are literally hundreds of reasons why you need to align yourself with a successful Realtor, but let’s look at just a few. Before we start, this is not the time to give a “newbie” a shot or to use your friend’s daughter or son who just got their license. This time around, you need an experienced professional who knows the market, is a fierce negotiator, and has the connections you need.
First, an expert in the market will have a full grasp of the neighborhoods, local churches, medical facilities, etc, and can offer unlimited guidance on choosing the perfect spot. Second, they are connected to everyone that you will need to know for your real estate transaction. It’s tough to find a house or doctor without guidance. It’s equally hard to find a reliable local attorney, appraiser, home inspector, and all of the people you will be relying on to make the transaction go smoothly. If your Realtor recommends someone, you can be sure he or she has a long and proven track record of getting things done.
Third, a licensed Realtor is bound to higher ethical standards and business practices. Not every real estate agent is a Realtor! A Realtor is a licensed real estate salesperson who belongs to the National Association of Realtors®, the largest trade group in the country. Realtors have a more robust search engine at their disposal. Yes, with the internet you could almost look for any property on the market, but access to the local MLS is limited to Realtors and still has many more options than available from Zillow, Trulia, or other websites.
2- Choose The Right Location
Figuring out where you want to retire can be a daunting challenge. It’s easy to dream about heading south to a warmer climate, but not all southern cities are the same. Even here in South Carolina, the coastal towns can offer a vastly different feel and lifestyle from place to place.
One spot to start is the AARP Livability calculator, using data they believe makes for a great retirement spot, you can score areas of the country just by typing in a zip code. This can be a handy website to quickly narrow down the list to a few cities.
The Milken Institute’s “Best Cities for Successful Aging” is another great tool to make you aware of important factors you may not have considered. This index evaluates 84 factors including things like: crime rates, access to fitness, availability of the arts, job opportunities for retirees, and even the level of senior volunteerism. Of all the online resources and tools, we have found this one to be outstanding. Plus, they make the search easy by quickly getting you to think about the big picture such as Big Cities, Quaint Towns, and Coastal Villages as a starting point.
The experts agree, it’s important to spend at least a week or two in any city or town you are seriously considering (see about renting below.) Perhaps take a few days at different times of the year, including some during the “bad” season so you can see your new home potential at its worst. Once you are in town, try your best to live as a local. Eat in a few restaurants, visit the attractions, shop like you do at home, check out the dry cleaners, supermarket, and even the post office. This is another area where an experienced Realtor can be invaluable.
3- Set A Budget
This is an obvious category, but we are still surprised how often retirees are caught off guard not just by the cost of living and the expenses of maintaining a house, but also by the costs associated with buying and moving. If you have lived in your current home for any length of time and have accumulated lots of stuff, you need to either donate, gift, or throw out what you don’t need……or move it! Which can be costly! (Check out our article about decluttering before you sell if you need help.)
Besides the expense of moving your belongings, preparing your current home for sale can be a financial burden. Neglected maintenance and overdue repairs that need to be completed before you sell can quickly add up financially. Just another reason it’s recommended to begin the process of selling and moving as soon as possible along with getting a pre-sale home inspection
If you are planning on financing any portion of your new home, it’s important to factor in those costs as well. Remember, the amount the lender is offering is not just the amount you can afford. You will need to account for the down payment, closing costs, and the financial outlay of setting up your new life in a new state. Your Realtor will be able to help you set some expectations and map out a financial plan for the transition.
4- Understand What’s Important
You may find that retirement has snuck up on you or that you haven’t spent enough time in planning and researching this phase of life. This is a good time to think about what will be important to you during these years. Thinking about how you want to spend your time, and with whom, will be vital in picking the perfect location and property.
When house hunting, many clients focus too much on the short term wants (bedrooms, bathrooms, amenities, and such) and not enough on the long term vision of how they will spend their time and what sort of things they want to do. This is the time to think about the activities with which you want to fill your days. Do you want to play golf or tennis, enjoy the beach, go kayaking or boating? Will the kids and grandkids be visiting often? All the above and more?
It’s not just about the type of house you want but the type of lifestyle. One of the benefits of buying a retirement home on Hilton Head is that the Island is located near an abundance of things to do and places to go. It can also be the perfect destination for the grandkids to visit. With countless holes of golf, you could play a different course everyday without driving more than an hour from your front door. The lush marsh and intercoastal waterway offer unlimited potential for fishing (both in-shore and deep sea,) dolphin cruising, catching giant sharks, parasailing, jet skiing, or any type of boating you could want. Plus, with numerous marinas and docking facilities, now may the time to buy the boat you’ve always wanted!
Are you looking for a more peaceful and quiet time? The Island has numerous homesites nestled among majestic live oaks hidden away from both your neighbors and the world. If you want a place to hide, Hilton Head has what you’re looking for. Being only a few miles from Interstate 95 also means you are only a few hours from the mountains and the large South Carolina lakes of the mid-lands and up-state, or major cities such as Jacksonville, Charlotte, and Atlanta.
5- Consider Buying A Home Before You Actually Retire
If retirement is on the horizon within the next five or so years, you may want to consider purchasing your retirement property now…. even before you receive the gold watch. There are a few reasons for this, but the most important ones focus on the financial aspects. If you will be financing the home, you can still take advantage of the historically low interest rates, and that can pay off huge in the future. Furthermore, it’s always easier to obtain a mortgage while gainfully employed. When the underwriters look at your credit worthiness, having a lower debt to income ratio is one of the major deciding factors. Your current income will most likely be higher than in retirement, so more favorable terms may be available to you.
If you plan on buying a “fixer-upper” or something that will need a few renovations or updating, your cash flow situation prior to retirement will most likely put you in a better position to absorb the costs. Setting a project budget is always a good idea, but having a steady income can help if large issues or unforseen problems arise and repairs end up costing substantially more.
Of course, buying early also gives you more time to pay off the house or take advantage of the high demand for vacation rentals on Hilton Head. You could kill two birds with one stone; by purchasing early, you can receive better financing and also rent out the house (short or long term) which could actually turn your property into a profit center before you’re ready to retire in it permanently.
Lastly, owning the property sooner will give you a better insight into the actual cost of ownership. Utilities, amenities, HOA fees, etc., will be accurately accounted for to help create a reliable expectation and budget for when you leave the workforce and kick back.
6- Think About Family & Friends
Let’s face it, one of the biggest things we look forward to in retirement is more time with family and friends. Taking this into account, you want to make sure you locate yourself somewhere everybody wants to visit. We have several clients that have become permanent stops for family travelers on their way to Disney World!
Retiring to a premiere vacation destination like Hilton Head will go a long way to ensuring your grandkids will want to visit. The major airports of Savannah and Charleston are just a quick drive away not to mention Hilton Head has its own airport that several carriers fly right into.
The other aspect is that you may be retiring more than a few miles from your friends and family. Is this something you are prepared for? Will you have the health and financial resources to travel to see them as you age? A secluded mountain getaway sounds great until you realize it’s hard to get out during the winter and it could be such a hassle for people to visit that no one bothers. Your Realtor can help you find the right sized home so you can host some
One more note, you may want to be in “downsize” mode, but are you planning on letting company stay with you? It’s no fun to pack friends and family into a hotel every time someone wants to visit. Your Realtor can help you to find the right size home so that you can host some company, but not ending up with too much home for day to day living.
7- Understand The Financial & Tax Impacts
When considering where to relocate, the State Tax Code is just as important as the weather! For the most part however, taxes are more favorable the further south you go. Many folks pack up and move out of the Northeast the second they get a chance to escape the insane property taxes, commuting expenses, and even income tax. This is the perfect time to seek the advice of a professional. It also might be time to assess your relationship with your Financial Advisor, if you have one. Now that you may be relying more heavily on your retirement accounts and the guidance of your advisor, it’s definitely easier if that person is local. Sure you can pick up the phone, but it’s awfully nice to see you finance manager face to face when the market swings or you need some financial advice.
Selling your home and moving out of state also raises another set of tax issues that you need to manage. Personal gains, investment account withdrawals, additional payment, and tax bracket changes all can be confusing (and sometimes stressful) if you are unprepared or uneducated. For example, if you are moving from a more modest home to a larger, nicer one, you may be faced with paying more in property tax, homeowners insurance, and utilities.
Let’s also talk about mortgage financing. If you plan on financing part of your purchase, you should look at the pros and cons of getting a loan in your home town vs. the new location. Depending on where you are moving from, getting financing on Hilton Head could be much easier….and cheaper. Your local Realtor can direct you to a few professionals who specialize in second/vacation home financing. Some local banks will even offer incentives to get your business because they hope that if you move here, you will move your money too.
Robert Sokolowski, a financial advisor on Hilton Head, had some great insight to add when we spoke to him about the financial implications of purchasing a retirement home. “Increasingly some of the high tax states in the Northeast, NJ and NY in particular, and California are tracking down ex-residents who are now claiming residency elsewhere and trying to extract state income tax or making it more difficult to prove you have changed residency to another state. If you have relocated, but are maintaining some sort of presence in their old state, they are raising the burden of proof and paperwork associated with establishing a new residence.”
If you’re buying early and plan on using your home as a source of rental income, you need to remember that the IRS requires you to report all the income if the property is rented out for 15 days a year or more. You are also able to deduct all the operating expenses such as management fees, utilities, and repairs against that income.
8- Test Drive Your New Town
While we are on the subject of rental property…you may want to try a long term rental where you are planning to live. This is the perfect way to see if your new town will be a good fit. Even if you have vacationed here before, spending a month on the Island can really give you a better insight into what life will be like. You could rent not just one house, but consider renting two or three! Can’t decide if you want a home in Sea Pines or a villa in Moss Creek? Spend a few weeks in each.
Local property manager, Peter Moreson, with Lowcountry Coastal Rentals, has some words of wisdom on this. “I have many clients who spend a few winters here on Hilton Head and use the opportunity to really vet out where on the Island they want to buy. You truly get to know a place by spending the cold windy months living there. It also shows you if you are okay being in a more tourist occupied location or want to live with more full time residents. That knowledge is vital in making any decision.”
Surprisingly, many people moving here don’t want to spend their retirement surrounded by only other retirees and others do. Test driving a neighborhood will assist you in getting an accurate picture of the other residents to make sure it’s a good fit.
9- Explore Retirement Communities
We are sure you have seen all the glossy brochures and fancy advertisements for over 55 retirement communities aimed at older residents and potential retirees. Is a development with age restrictions and planned activities right for you?
These communities come with a lot of advantages for some people, especially the recently retired or widowed, as you have a built-in community from day one. Many offer activity centers, gardens and lush landscapes, and numerous social events. They can also help ensure peaceful environments by limiting the residents, visitors, and even when contractors and vendors (such as landscapers) can operate.
We are fortunate to have several different offerings in the realm of over 55 retirement living here in Hilton Head. Of course the two biggest and most well known would be Sun City Hilton Head and the new Margaritaville. This development offers townhomes, condominium style homes, small single family homes, and even estate sized lots in a seperate village. If it suits you, you can still have a larger private house, but have access to the limitless amenities and golf.
There are some full-care retirement homes here as well. Depending on the level of services you buy into, you could pick a “full service” senior community where even nutrition, maintenance, and health services are included. One of the key advantages of a senior community is saying good-bye to yard work, snow removal, and home maintenance. These things are included in your monthly senior living fees. You may even have the option to add housekeeping services.
10- Local Healthcare & Services
When evaluating where to retire, a good piece of advice is to focus on long-term living. At this stage of life, you probably aren’t going to be jumping from house to house, so take the time to pick wisely. Don’t just look at the property and neighborhood, but also look at health care, its availability, and how close it is. This is another reason why retiring to Hilton Head makes so much sense. We are fortunate to have world class doctors and health care right here on Hilton Head and there is the Medical University of South Carolina (MUSC) right up the road in Charleston.
Because Hilton Head offers something for everybody, it also draws a lot of younger professionals such as doctors and other medical specialists. Our Island has a vast selection of physicians, and more start to call Hilton Head home every year. In addition to a great variety of doctors, the Island has many long-term care facilities that offer state-of-the-art health care and top-notch staff. It can be comforting to know that if a spouse or loved one becomes incapacitated, they are able to stay close to home. Here again, Hilton Head is great location which will make it easy for friends and family to visit if a long term sickness should arise.
11- Aging In Place
Once you’ve found the community you want to move to and thought about the things we talked about above, you still need to ask yourself some questions to pick the right home. You want a home that suits your needs today and will still work for you in the future. There is a huge misconception that baby-boomers will automatically downsize when shopping for a retirement home. Actually, statistics point to the fact that many retirees move to a similar sized house or only reduce their square footage by a modest amount. What does become more important is the layout and how space is used.
A big question is: will you look for a single family home or try a townhouse or villa? Some folks who have lived in a single-family home all their lives may balk at the rules in a condo community and may not want to share walls and struggle to maneuver carts to carry groceries in elevators. How easy it is to live in a spot will dictate how long you can stay there. More and more seniors opt to age in place, rather than move to a care facility, and for that reason, it’s important to look at some other key indicators on how accesible a home may be.
There are a few things to mull over when picking a home. Is a single level floor plan right for you? Not having to negotiate stairs can be important down the road and make getting around your home much easier. Keep an eye out for larger doorways and hallways, this makes it easier not only to bring in a big Christmas tree, but also to navigate using a walker or wheelchair. How accessible are the bathrooms? Is there at least one step-in shower? Same goes for appliances. Check their height carefully. Is the microwave over the range going too be to tall in a few years? Some of these items are easily changed to make life convenient while some others might be structural and will require more work.
12- Future Maintenance & Home Repairs
Home maintenance is another big area to think about. How much work do you want to do around the house? How about outside, who will cut the grass and take care of the landscaping? Buying a newer home is one sure way to cut down on major repairs in the beginning, but any house will need tending to after 10 years or more. If you feel financially secure, you can always rely upon hiring out any repairs or services you may need. If you think you will need to be a big DIY’er in the future, you will have to take that into consideration.
Taking all of this into account, there is a growing trend in building or renovating a house to make it a “Forever Home”. The idea is simple enough, to make your home more accessible and habitable for many years to come. You can read more about what contractors are doing to help potential homeowners and residents over at Realtor.com.
We hope our guide has been helpful to make you think about your next move. One area we want to touch on again is the importance of working with a great Realtor. Of course, The Sheri Nixon Team is here to help! Even if you’re not moving to Hilton Head, remember when working with a Realtor that the agent knows the area you are buying into and the types of homes that may be a good fit (new construction, fixer uppers, retirement communities). Most importantly, they actually care if you are happy with your new home. Checking verified online reviews will be a good place to start when searching for a Realtor to work with. Sites like Zillow and Trulia actually verify the home sales so you can be sure that someone’s mom or son isn’t the one leaving a review!
The local Realtor Association can be another resource in choosing an agent. They will have records of the agents that continue to add to their credentials, have additional certifications and designations, and are active in the community. This is an important trait because Realtors that are part of the community usually have more insight to offer in the property search process.
Of course, we would be honored if you considered The Sheri Nixon Team to help you begin the process!