Seeking info on Kauai STRs

[Matthew Sevilla]

Hello, I live in Southern California. I work a W2 job, and I'm looking to purchase an STR to offset my income taxes. We are really interested in Hawaii. Kauai seems like a solid market. My price range is around $700k. I'm thinking of purchasing a 1br/1ba condo. My wife currently manages her parents' STR in Oceanside California. So we would self-manage together. Does anyone have any advice as to where we should start or how to properly underwrite a property? I want to make sure it cash flows and want to be diligent with the decision.

[Bryan Vukelich]

Quote from @Andrew Steffens:

I recommend speaking with @Bryan Vukelich for all things Hawaii!

Also are you looking for tax benefit for 2025 or 2026?  2025 you are a bit late I would say.

 As always, big mahalo Andrew to the "shout out" and referring Matthew to me.  And @Joseph Lambert, I agree with much you wrote. But managements fees on O'ahu seem like they vary more than Big Island. On O'ahu, I've seen full service STR management monthly fees range from 10%-35% (though owners often get what they pay for). Our property management division, Island Stays Hawaii, charges 20% for full service and we are the highest rated host on Airbnb for O'ahu that has more than 20 properties under management.

It's also quite difficult to make the numbers work on O'ahu if financing with 25% down. And the market here is also shifting to a buyers market, though quite a few sellers seem to have unrealistic expectations for what they can sell their properties for in the current market and "days on market" has increased considerably for STR units.

Lastly - many of my clients are acquiring STRs here to take advantage of the tax benefits. My expectation is that will continue into 2026.  However, tourism numbers are down compared to last year and nightly rates have softened a bit since September - I'm curious to see what 2026 brings . . . 

Aloha,