12 Valencia Rd #36

Hilton Head Island, SC 29928

$549,000F

3 bd · 3.0 ba · 1,349 sqft · Built 1985 · Condo · Active · 222 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,482/mo
• Mortgage (P&I): −$2,879
• Tax + insurance: −$915
• HOA: −$873
• Vac / Maint / Mgmt: −$941
• Net cashflow: $-1,126/mo
• Annual: $-13,518/yr
• Cap rate: 3.83%
• Cash-on-cash: -8.79%
• DSCR: 0.61
• 1% rule: 0.82%
• Cash to close: $153,720

Investor read

• This is a 3-bed/3.0-bath condo listed at $549k.
• At list price, monthly cash flow is $-1k ($-14k/yr) — negative.
• To cash-flow at today's rent, offer at most $512k (6.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $448k (18.4% below list).
• It's been on market 222 days — a 12% lower offer ($483k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $448k (18.4% below list) — sets the bar for 1% rule.
• In year one you build about $21k of equity ($4k loan paydown + $18k appreciation (3.2% local appreciation)).
• Location reads 64/100 on livability (#157 in SC) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A-; Watch: amenities F, commute F, cost of living F.
• Beaufort 01 (town): math 42% / reading 51% proficiency, ranked #17 of 80 in SC (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hilton Head Island Elementary (math 50% / reading 49%, grade D, #168 of 597 statewide, top 31%, 709 students, 56% FRL); Hilton Head Island Middle (math 33% / reading 42%, grade F, #90 of 229 statewide, top 42%, 856 students, 52% FRL); Hilton Head Island High (math 70% / reading 82%, grade A-, #34 of 196 statewide, top 17%, 1,345 students, 40% FRL) — zoned schools at 49% FRL track the district average.
• Market conditions: Rents rising (+3.2%/yr); 846 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,824 units permitted in Beaufort County in 2024 (618 in 5+ unit buildings).
• Beaufort County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 19y ago; this cycle's ask has dropped $40k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $330k; list at $549k implies a 66% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 3.8% vs local median 2.9% in Hilton Head Island — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• At $4,482/mo this rent would consume 55% of the median local household income ($98k/yr) (locally 216% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 222 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?