Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Kiawah: Island Reversal
by Yesi Duran

Looking for real estate investments but the typical real estate fare isn’t cutting it? Are alternative investments more your style? Nothing says unconventional like buying into island life.

Investing in and living at Kiawah Island, which is 21 miles south of Charleston, South Carolina, can be very attractive from the perspective of a financial trader looking for luxury real estate, be it a new home, second home or retirement home.

Primarily, real estate investors seek rental income and capital appreciation. Rental income is a better source of income in Kiawah Island. Generally, sea-facing properties are more in demand. A villa facing the sea front is very easy to rent out and will command a premium over villas without a sea view. Rental rates in Kiawah have historically seen a growth rate of 4% to 6% per annum. Rental properties in Kiawah have to face local competition, as well as from competing travel venues such as cruise liners, theme parks, etc. However, despite tough competition, the outlook for rental properties is generally positive.

Imagine life on Ocean Park’s vast southern marsh without the complexity of designing and custom building a home. Overlooking the scenic Ocean Course and the Atlantic Ocean beyond, Marsh Walk’s light-filled homes will invite sea breezes and tree-dappled sunlight.

Among its many developments, Marsh House is the newest amenity Kiawah Island has to offer. The Marsh House is a great example of the island’s careful master planning and design within nature, according to Grey PR.

Accessible to the community through a marshside ribbon park and bike trails, the Marsh House offers casual food and beverage service, an infinity pool and is situated in the only place on Kiawah with views of the marsh, rivers, creeks, ponds, beach, ocean and golf course.

The Ocean Park development and impending Marsh House is a truly unique area to build, so much so that homeowners are building homes 35% to 40% faster than average. In fact, 50% of sold sites are in the process of being built on; compared to the average neighborhood builds at 10% to 15%. 

Investors planning to move here don’t need to worry that this island is going to be flooded with residents, because measures are in place to keep it from becoming overcrowded.

Before the Kuwaiti Investment Company purchased Kiawah Island in 1974, the island was approved for the development of a maximum of 12,000 units available for sale, not including 400,000-600,000 square feet to be used for commercial or hospitality development. The first act of decreasing this to prevent overdevelopment was in 1976 when the master plan of Kiawah Island was established while owned by the Kuwaitis, and a cap of 7,000 units for residential use was introduced.

In 1994, when the original owners of Kiawah Partners acquired the island, the maximum capacity of development was further culled down to 6,000 units in order to better preserve the natural elements of Kiawah. Today, under South Street Partners/Kiawah Partners, the limit is closer to 5,500 maximum residential units.

Additionally, to combat over development of commercial use, South Street Partners created Freshfields Village – outside the gates of Kiawah Island – that offers homeowners and guests a place to eat and shop, thus decreasing the commercial development on the island.

Each new owner capitalizes on the opportunity to reestablish entitlements and decreases maximum residential units even further to ensure that the Island is never over developed.

A smaller scale proof point of this is through Ocean Park development on the Island. Originally, the development was entitled to 360 residential units. However, Ocean Park is on the path to develop just under 200 residential units – almost half of what it was originally slated for.

However, there still are plenty of new developments and investment opportunities for those seeking to move in right away. Prime placement along Kiawah’s raw and textured eastern tip accounts for the thrilling beauty of Ocean Park. Here, great strands of cathedral oaks frame vistas that stir, surprise and inspire: the restless Atlantic, whispering marshlands, and the famed fairways of the neighboring Ocean Course. 

Kiawah Island is not just a place to live in luxury; there is also plenty to do.

With an emphasis on preserving natural elements and landscape, Kiawah Island is considered by many to be the most sensitively developed barrier island in the nation. When Kiawah Partners developed the master plan in 1976, they were careful to ensure that the land will never be overdeveloped. As a result, Kiawah Island Club members and resort guests can appreciate unobstructed views of the Island’s natural elements while enjoying a variety of leisure activities and sports.

Whether it’s exploring the 10-miles of pristine beaches, joining friends for a tee-time at a championship level course or taking a leisurely bike ride, Kiawah Island offers outdoor activities for all interests and hobbies.

Five-time British Open champion Tom Watson designed this classic seaside golf links course with sections exposed to ocean breezes that encourage creative play to handle the conditions on any given day. The 6,960-yard course runs through dense forests along marshes where the Kiawah River meets the Atlantic Ocean. The links-style course is reminiscent of Scotland or Ireland with rolling dunes and marsh savannas. 

Tourists love coming to Kiawah Island too, and because of that, the real estate market is very well developed there. Kiawah is a major luxury tourist spot and hence there is a high demand for luxury properties. 

The primary investment opportunity on Kiawah Island is real estate. You can either buy a home already built or have one custom made for you. The first option is more popular among investors, who later, after the sale is concluded, may change interiors or the settings and then go ahead with any other personalization plans.

If you’re looking for an alternative real estate opportunity that can double as a home that feels like a permanent getaway, investment properties on Kiawah Island represent a hard asset very easy to enjoy.

(This article orginally appeared in the August issue of Modern Trader)

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