It’s been an unusually busy first 3rd of the year in real estate and this is the time of the year when it normally breaks lose! Earlier this month, Oliver and Ross Thames and I were involved in a train of 5 home sales on the same day in which we represented 4 of the sellers and 4 of the buyers. Talk about walking on pins and needles! Knowing that everyone was packing and moving at the same time and relying on each deal to go smoothly. There were some “hick-ups” and a last minute “snafu” but I’m so proud of the way the we were able to overcome everything for our clients. Reading this note from one of the clients definitely made it all worth while in the end!

Just up the road in “L.A.” (that’s Lower Awendaw), residents get a taste of affordable houses with a little space between them and their neighbors with just a short drive to many of these aforementioned conveniences. The farther you drive north, the farther these conveniences get and the more often I am asked by buyers “Where do you do your grocery shopping?”, “What is internet service like?”, or “What do people around here do for fun?”. These are fair questions. Questions from someone who has lived a life of convenience. My wife was one such person who gave me a puzzled look when I explained that where I grew up I had to drive 30 minutes to see a movie or buy groceries and she’s now called McClellanville home since 2006. These type of questions really get to the heart of measuring the conveniences of someone’s current life to an unknown life they may experience if they decide to pull the trigger and move outside of the hustle and bustle of city life.

I’ll be the first to admit that this “alternative lifestyle” is not for everyone. If you can’t survive without a Starbucks umbilical cord, it may be a rough transition. It took my wife some time to adjust after living in a city her whole life. Buyers willing to step outside of their comfort zone and discover true country life in Awendaw, McClellanville, and the surrounding rural areas, begin to learn that there is more to life than modern conveniences. When you skip the drive-thru window and sit down in a local restaurant you meet neighbors and form lasting relationships. When you stop cutting down every tree in sight to build homes you start co-existing with nature and witness it in your own back yard. When you get rid of all the traffic you can actually enjoy the peace and quiet and make it more enjoyable to walk, bike, or even take a golf cart for a spin. When your beaches are only accessible by boat you find a sanctuary with miles of uninhabited shell-covered beaches for yourself. When you trade your planned parks and paved “nature trails” for hundreds of thousands of acres of protected forests you witness the glory of nature. When you’re out of sugar or eggs you ask your neighbor rather than going to the store. You take a step toward self-sufficiency where conveniences take a back seat to things, meaning-of-life kind of things, that you might have missed if you were sitting at the drive-thru or staring at a phone.

I’ll leave you with this final thought that I enjoy sharing with visitors to the area that may sound odd coming from a real estate agent trying to “sell the area”: Nobody HAS to live in McClellanville! There is no Boeing or Volvo factory attracting workers that have to live nearby. Housing isn’t incredibly affordable and there isn’t a fantastic public transportation system ready to whisk them to work. Our school system isn’t ranked #1 in the country (but check out CREECS, we love it). There are even times that the mosquitoes will dang near carry you off (rare, but it happens). If we “solved” all of those problems, we wouldn’t be the unique community that we are today. You see, it’s these inconveniences that help us keep it just the way we like it. It sorts out the people who can truly appreciate everything that the area has to offer and place a higher value on these resources. These people, whether they were born here or just moved here yesterday, are the key to fighting for its preservation for future generations.

Fear of growth and development is on the minds of Bulls Bay area residents as urban sprawl creeps outward from Mount Pleasant (watch the growth of the area using the Growth Tool below). Builder D.R. Horton has begun work on their latest development known as Bee’s Crossing which plans to squeeze 90 homes onto 32 acres. While the postal service originally issued this area an Awendaw zip code, it has long been annexed by the Town of Mount Pleasant and is located in what is now commonly called “North Mount Pleasant”. Traveling further north, you encounter the low-density communities of Sewee Preserve followed by the Bulls Bay Golf Club. This is the farthest property annexed by the Town of Mount Pleasant and the beginning of the Town of Awendaw, the proverbial line in the sand.

Mt. Pleasant has recently passed legislation limiting the number and type of building permits that will be issued each year. Those fed-up with the growth of Mount Pleasant (every one that I have talked to) see it as too little, too late. While it will have a slight effect on slowing growth in their area, Awendaw may actually be more affected by the passage of this bill. Developers that were perfectly content with continuing to squeeze housing projects into the few remaining spaces in Mt. Pleasant are going to have to sideline some projects for future years and look outside of Mt. Pleasant for greener pastures. The abundant land in Awendaw seems to be just what they are looking for.

Awendaw’s residential zoning hinges on the presence of public water or sewage which permits a minimum lot size as small as 0.29 acres while it reverts to 0.69 acres without them. The Town of Awendaw has put in place a small public water system with lines running outward from its town hall water tower. To make the project financially feasible it must really be scaled to many more customers. Public sewage has also been discussed with the latest negotiations to incorporate the system in with the building of public schools and a residential development and have the final treated effluent dispersed in the town’s park.

The difficulty of public utilities in Awendaw lies in its decentralized rural nature. While McClellanville formed along the banks of Jeremy Creek and grew outward gradually as a more centralized community, Awendaw has large swaths of the Francis Marion National Forest slicing through it. There is also a large amount of land which has been strategically preserved from development through the placement of conservation easements. However, there also exist numerous large acreage tracts that have been patiently growing pine trees and waiting for the demand that seems to be building.

Developers have broken ground on a new development called Awendaw Village. The proposed 1/2 acre lots sparked concern but on closer inspection, the overall density of the community turns out to be less than 1 home for every two acres because of green spaces and wetlands. The developer is beginning with just 14 of 41 planned homes in the first phase. Chalk it up as a “win” for the type of controlled growth that could maintain the rural way of life, but this hundred-acre tract is dwarfed in comparison to some of the larger undeveloped parcels. If any of these other tracts were allowed to be developed at close to 1/4 acre-sized home sites it could double the population of the town and forever transform the rural face of Awendaw. Most of the residents that I know are opposed to this transformation and taking a stand against the uncontrolled growth they witnessed in Mount Pleasant. Organizations such as The Nature Conservancy and Coastal Conservation League have also joined in to prevent disruption in this keystone community situated between the National Forest and the Cape Romain Wildlife Refuge.

In contrast to Awendaw’s zoning, unincorporated Charleston County surrounding Bulls Bay provides for mostly 1 home for every 1 to 10 acres and the Town of McClellanville allows for only 1 home per acre or 3/4 acre in the Historic District. McClellanville is also blissfully encumbered by its geographic distance from the growth of the Charleston Metro area and separated by larger undevelopable tracts of the Francis Marion National Forest. The residents, town council, and mayor are unified with a preservationist mindset and a consolidated effort to reject public sewer and water, multi-family and high-density zoning. There are certainly some larger tracts of land that will be subdivided and vacant lots between homes which have slowly been filling in with homes, but the underlying zoning and mood of the community working together gives hope against it losing its small-town feeling.

Flip It

House “flipping” got a bad name 5 years ago when you could turn on TLC or HGTV and every idiot who couldn’t swing a hammer was making $500K on their west coast rehab…fast forward to the present and for some reason California has one of the highest percentage of foreclosures and upside down home ownership, go figure.  The numbers look pretty good on this house though.  After purchase price, repairs, carrying costs, and real estate commission to sell you’d probably have $275-300K into the home and could hopefully ask $350-400K in return, but every month it’s sitting on the market your profit is counting down.   You’ve also put in a lot of hard work and are paying taxes on the profit, so if you’ve already got a nine-to-five it might not be for you.

Long-term Rental

Well you could also do all the repairs and rent it out long-term and probably fetch about $1200-$1500/month depending on the finishing touches, but that is the top of McClellanville’s rental market (waterfront could fetch more, but are more profitable as short-term rentals) and renters are scarce, but not impossible to find.  Your mortgage payments if you financed the purchase and your improvement and are paying taxes and insurance are going to be around $1750, so you’re losing money each month (good investors try to avoid doing this).  Combine this with house flipping approach and try to rent while you sell and you may be able to hold out for the perfect buyer, but you’re going to need a patient renter that doesn’t mind showings and a month-to-month lease.

Vacation Rental

Short-term or vacation rentals is also a possibility in this area although most people who want this amount of space want to spend the extra money for waterfront with a dock.  If you average $1000/week and figured a conservative 50% occupancy, you’re making about $2200/month but your expenses (including marketing, insurances, taxes, and incidentals) are going to shave that down to around $1500/month but you can count on that occupancy rate to improve each year as you build up return guests.

Rent a Portion

There is a provision in McClellanville ordinances that allow for a portion of a home to be rented as long as it is separate and distinct from the home and is under 800 square feet.  That means it’s own entrance and kitchen and doesn’t work very well in this home but in the historic district you’re talking about $750/month in rent and you can now live there with a mortgage payment down around $1000.

B&B

The final option that I’ve come up with is to manage the home as a bed and breakfast.  McClellanville has supported many different types in the past and truly is the perfect setting for this type of accommodation.  The law allows for only 1/3 of the home to be used for the purposes of the guest, which means that 2/3 or more must be split between the owner’s private living quarters or common area for guests.   In this home this basically allows for two of the very large rooms to be guests suites.  Each suite could rent for $100/night and I think that you could assume 40% occupancy for the first room and 20% for the second which would come out to $1825/month before taxes, marketing, and insurance whittled it down to around $1200, but remember you’ve got the benefit of still having most of the home to occupy as well. Running a B&B (scheduling renters, changing sheets, cooking, entertaining, etc) is certainly not for everyone, but when you figure that each year the return should grow, you could soon be enjoying a mortgage free home it’s not a bad option to have.
Investment property doesn’t have to be the bane of the neighborhood.  When properly cared for and managed rental properties of all types can contribute to the overall improvement of an area.  Short-term rentals stimulate the local economy without much negative impact (I hope) while long-term rentals allow for a greater diversity of the population such as starter families that may not be financial able to purchase a home but are still involved in local activities.  Even if this home slips through your fingers, don’t be afraid to give me a call and let me know what your dreams and aspirations are and I will see what I can find for you.
Update: I received a tremendous outpouring of responses to this article which really shows that the market is not as bad as you hear.  I showed the house to two prospective buyers and had many calls from latecomers alas the sellers have accepted a contract and the sale is pending.  This contract was actually submitted with 24 hours of the huge price drop although they did wait through the weekend for other offers.  The accepted offer was actually for $5,000 above the asking price.  The moral of this story is to get your financial ducks in a row because you don’t know when the next deal will come along.  You can’t truly be “in the market” for a home if you don’t have a pocket full of money or a pre-qualification letter from a bank.