Investing in Hawaii - Waikiki

4 Replies

Hey Guys

I'm an Australian investing in the states and after seeing the air bnb rates people are getting in Hawaii in particular Waikiki, became interested in the real estate there. In other states in America I have been going through a turnkey provider they have also assisted me with non recourse finance as well as property managers etc.

Look forward to hearing from some bigger pockets people

Cheers

Sarah

Short term vacation rentals come with an additional tax burden of 10.25% in Hawaii, the Transient Accommodations Tax (TAT).  There's also the 4% General Excise Tax (GET), which you will need to apply and register for a GE License.  Additionally,  since you're looking at Waikiki, there will be an additional 0.5% Oahu Surcharge Tax.  The taxes are calculated on your gross income from the rental.  Hopefully you'll remember to factor those numbers into your property analysis. 

Hi Sarah,

I'm an investor from Adelaide. 

I like visiting Hawaii but in my opinion it's a pricey, pro tenant market.

How is your investment journey going otherwise?

What areas have you bought in? 

@Sarah Singh

@Account Closed is absolutely correct with the taxes. They'll take a lot off the top. 

You're also going to have to pay about 30% towards income tax. AirBnB's are the new fad. Wait until the market starts to correct, job growth declines, and fuel prices begin to climb again. In general, people are going to take less vacations, especially long-distant vacations to the middle of the ocean. 

I'm not saying this is going to happen right now, but I would advise against running your numbers based off what income you could potentially make from AirBnB. Run the numbers like a long-term rental, and if it's still a good deal, at least you'll have a back-up plan instead of a vacant vacation rental that can't keep itself above water.