By Lynne R. Anderson * REALTOR * Accredited BUYERS REP
Sounds simple right? The line made famous in the hit movie “Field of Dreams,” makes the process seem like an easy home run. Better take a deep breath and a couple of practice swings. While building your dream vacation home will certainly result in additional time with friends and family - build a beach house and they will visit - be sure and do your homework first.
KNOW YOUR TERRA FIRMA. Building in a coastal environment requires special considerations. When you find a beautiful lot, get a survey and make sure it includes the FEMA flood lines. Also know your property’s elevation for insurance purposes. Plan for a Tree and Topography Study; Hilton Head loves its ancient specimen trees and protects them from random removal. Realize the new construction guidelines implemented by the Town of Hilton Head requiring hurricane-rated windows, certain roofing structures, flood vents and higher elevations are there for the protection of your family and your investment. These hearty add-ons may cost extra on the front end, but could save you thousands of dollars in the future.
HIRE THE RIGHT ARCHITECT AND BUILDER. Building a home is obviously a longer process than buying. Plan accordingly. Interview your architect first, and the builder second, and interview more than one. Stay local. No one knows the island building and permitting process like an islander. Ask for references. Insist on a walk- through of prior projects and decide if you like what you see. Importantly, ask about timelines and workflow. If they’re in demand and have several projects on the books, your home start could be several months away. Lean on your local realtor, call the Hilton Head Area Homebuilders Association or the American Institute of Architects, Hilton Head chapter and don’t be shy about asking questions. Understand exactly how price is determined. Cost plus, completion incentives and change orders all translate into dollars saved or spent.
IS IT SMART TO RENT WHAT I BUILD? Many buyers don’t know the answer to that question. The thought of renting your brand new bungalow might not be appealing until you realize the ROI. If offsetting the cost of carry with short term vacation rentals are in your building business plan, make certain your architect and builder are aware. Custom, and typically more expensive interior and exterior finishes such as lighting, flooring, wood-burning fireplaces, marble floors, exclusive European appliances, imported stone decking and pavers, etc., will drive up the cost of construction and may ideally be saved for when your vacation home becomes your forever home. Renters can be hard on your investment.
CAN YOU GET A LOT LOAN? In the past few years banks have become slightly more willing to provide lot loans, roll them into construction draws, and finish with a permanent conforming mortgage. But it’s still not as easy as buying an existing home. Additionally these financing terms can come with additional fees, closing costs and insurance requirements. Be prepared to put down at least 25% on a lot loan. There are a handful of banks on Hilton Head that offer lot and construction loans. Ask your realtor for the best referrals.
YIKES! SHOULD I JUST BUY A HOME? Realtors hear this question often. In short, it depends. The cost of construction on Hilton Head has gone up considerably over that past 2 years. The cost of materials and labor including sheet rock, lumber, fixtures, faucets, electrical, roofers and framers has increased as much as 8% - 18% percent over the past 18 months. Builders are busy and good labor is hard to find. These market variables have resulted in construction costs starting at $250/sq. ft. for ‘basic’ custom homes. If you add hardy plank siding, hardwood, tile and stone showers, pools, pavers, fireplaces and ample windows to capture the Lowcountry light - as many Hilton Head buyers prefer - costs can rise upwards of $350-$400/sq.ft., and significantly higher. This doesn’t include landscaping, POA fees, the cost of land and the cost to design. Sometimes a buyer can secure an exciting home for less than it would cost to build it today, but not always. Still new homes are in high demand. As soon as that last nail is hammered, sit back, enjoy and let appreciation work its magic.
For more information on Hilton Head home buying and building, connect with Lynne Anderson @ 843.384.5426, or email Lynneriggsanderson@gmail.com. Many thanks to local award- winning Architect J. Terry Rosser @ 843.384.8301 for insight into the building process today.