Where Are the Best Places to Invest on Hilton Head Island for Under $400K? - Top 5 Opportunities NOW!
Hilton Head Island is one of the top vacation rental markets in the U.S., offering a unique mix of affordability and strong rental income potential. Investors looking for short-term rental properties under $400,000 have some incredible opportunities. In this article, we’ll break down the Top 5 Best Investment Properties on Hilton Head Island under $400K based on rental income potential, affordability, and overall return on investment (ROI).
These properties are all eligible for short-term rentals, offer strong demand, and can generate impressive income when self-managed. If you’re an investor looking to maximize profits and enter the Hilton Head market affordably, this guide is for you. Not all of these numbers are perfect and please do your own due diligence.
1. Sands Village Villas
Located in the heart of Hilton Head Island, Sands Village Villas is a favorite among vacationers due to its proximity to Coligny Beach and Coligny Plaza. This area is the most walkable on Hilton Head, making it highly attractive for renters.
Property Details:
Size: ~765 sq ft
Configuration: 2 bedrooms, 1 bathrooms
Price Range: Just over $300,000
Rental Potential:
Annual Rental Income: Up to $50,000+
Occupancy Rate: ~70% (255 days/year)
Average Daily Rate (ADR): ~$196/night
Investment Metrics:
Cap Rate:
Net Operating Income (NOI): $50,000 - $10,000 (expenses) = $40,000
Cap Rate: ($40,000 / $300,000) × 100 = 13.33%
Cash-on-Cash Return:
Down Payment (20%): $60,000
Annual Mortgage Payment (30-year fixed, 4%): ~$13,728
Cash Flow Before Tax: $40,000 - $13,728 = $26,272
Cash-on-Cash Return: ($26,272 / $60,000) × 100 = 43.79%
Why Invest Here?
High rental income relative to purchase price
Excellent location near Coligny Beach
Strong Airbnb demand year-round
2. Hilton Head Island Resort
Hilton Head Island Resort is an amenity-packed complex that consistently attracts vacationers.
Property Details:
Size: ~870 sq ft
Configuration: 2 bedrooms, 2 bathrooms
Price Range: As low as $250,000
Rental Potential:
Annual Rental Income: $45,000+
Occupancy Rate: ~70% (255 days/year)
ADR: ~$176/night
Investment Metrics:
Cap Rate:
NOI: $45,000 - $9,000 (expenses) = $36,000
Cap Rate: ($36,000 / $250,000) × 100 = 14.4%
Cash-on-Cash Return:
Down Payment (20%): $50,000
Annual Mortgage Payment: ~$11,440
Cash Flow Before Tax: $36,000 - $11,440 = $24,560
Cash-on-Cash Return: ($24,560 / $50,000) × 100 = 49.12%
Why Invest Here?
Affordable pricing for a 2-bedroom unit
Resort-style amenities (pool, tennis courts, beach access)
Very strong rental income potential
3. Fiddler’s Cove
Situated near Folly Field Beach, Fiddler’s Cove offers a gated community experience with excellent amenities.
Property Details:
Size: ~757 sq ft
Configuration: 2 bedrooms, 2 bathrooms
Price Range: Mid $300,000s
Rental Potential:
Annual Rental Income: $40,000+
Occupancy Rate: ~70% (255 days/year)
ADR: ~$157/night
Investment Metrics:
Cap Rate:
NOI: $40,000 - $9,500 (expenses) = $30,500
Cap Rate: ($30,500 / $350,000) × 100 = 8.71%
Cash-on-Cash Return:
Down Payment (20%): $70,000
Annual Mortgage Payment: ~$16,016
Cash Flow Before Tax: $30,500 - $16,016 = $14,484
Cash-on-Cash Return: ($14,484 / $70,000) × 100 = 20.69%
Why Invest Here?
Gated community with excellent amenities
Popular for families and couples
Close to one of Hilton Head’s best beaches
4. Seascape Villas
Seascape Villas, located in South Forest Beach, offers various unit sizes and great investment potential.
Property Details:
Size: 1-bedroom (~700 sq ft) to 3-bedroom (~1,500 sq ft)
Configuration: 1 to 3 bedrooms, 1 to 3 bathrooms
Price Range: Mid $300,000s
Rental Potential:
Annual Rental Income: Up to $40,000 (for 1-bedroom units)
Why Invest Here?
Variety of unit sizes for different budgets
Excellent South Forest Beach location
5. Seaside Villas
Seaside Villas is an oceanfront property with some of the best short-term rental returns in Hilton Head.
Property Details:
Size: ~520 sq ft
Configuration: 1 bedroom, 1 bathroom
Price Range: Below $300,000
Rental Potential:
Annual Rental Income: $40,000+
Occupancy Rate: ~75% (273 days/year)
ADR: ~$147/night
Investment Metrics:
Cap Rate:
NOI: $40,000 - $8,000 (expenses) = $32,000
Cap Rate: ($32,000 / $300,000) × 100 = 10.67%
Cash-on-Cash Return:
Down Payment (20%): $60,000
Annual Mortgage Payment: ~$12,000
Cash Flow Before Tax: $32,000 - $12,000 = $20,000
Cash-on-Cash Return: ($20,000 / $60,000) × 100 = 33.33%
Why Invest Here?
Oceanfront property at an affordable price
Strong rental income
High occupancy year-round
Final Thoughts
Investing in a short-term rental on Hilton Head Island under $400,000 is 100% possible, and these five properties offer some of the best ROI in the market. If you're looking for high rental income, strong demand, and great affordability, these properties are top choices for 2024.
If you're ready to start investing in Hilton Head real estate, reach out to Golden Homes today! Our expert team can help you analyze the best properties and secure the perfect investment.
