Short-Term & Vacation Rental Discussions

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Zander Kempf
  • Real Estate Agent
  • Honolulu, HI
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How to invest in Hawaii

Zander Kempf
  • Real Estate Agent
  • Honolulu, HI
Posted Jun 13 2022, 21:07

In a market like Hawaii, property value are much higher than other markets. These high prices makes investing for cash flow more challenging. There is one strategy in Hawaii that many investors frequent, short term rentals. With the recently passed Bill 41 in Honolulu, STR's are limited to resort zoned properties, which there are a handful of. These STRs are often in hotels, and called condotels. They can be purchased by the investor and handed back to hotel (ie Marriott, Hilton etc) to use as one of their resort rooms. They take care of property management end to end. Whenever the investor wishes to visit, their property is waiting for them to use as long as they please.

This strategy also allows investors to gain access to world class amenities like elaborate pools, spas, beach access, top tier bars and restaurants, and luxuriously decorated grounds and common areas. 

Honolulu, Hawaii

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Drew Sygit#2 Managing Your Property Contributor
  • Property Manager
  • Birmingham, MI
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Drew Sygit#2 Managing Your Property Contributor
  • Property Manager
  • Birmingham, MI
Replied Jun 14 2022, 04:51

The reverse of a timeshare:)

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Viren Kumar
  • San Francisco, CA
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Viren Kumar
  • San Francisco, CA
Replied Jun 15 2022, 10:07

I think this is a really interesting question. Whether it is a condotel or condo in the resort zone that is approved for STVR permit, I think this is a good long term strategy to hold one of these properties.

Most of the islands are not adding to the STVR pool. If regulations get enforced to remove illegal Airbnbs (they usually do in the long run), these legal STVR condos will be a great asset to own in high tourist demand area.

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Lane Aakhus
  • Investor
  • Honolulu, HI
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Lane Aakhus
  • Investor
  • Honolulu, HI
Replied Jun 29 2022, 11:19

It looks like the pricing for the legal condotels in Waikiki is on the rise now that tourism is back pretty much in full swing and the City is cracking down on the illegal properties.  I have found that there are a lot of cash buyers in this market that are difficult to compete with.