New to Real Estate · Jupiter, FL · Member since 2016 · 11 posts · 4 votes
Hello everyone,
My wife and I are planning on buying our first property as a vacation rental in Waikiki. Having lived on Oahu for the past year, we are excited for this venture.
Knowing that there are many complexities in the law, we were wondering if anyone had any experience/knowledge on how to do this legally. We are having a bit of a tough time decoding the different zoning laws and regulations.
Hi there Sagi! My wife and I help host and co-host Airbnbs in Waikiki. From first hand experience I can tell you that there is great potential in Waikiki for high returns in the short term rental market. You just have to know what to look for, and how to run your vacation rental correctly.
There are specific buildings in Waikiki that allow STRs. I have a list and can provide that info for you if you’d like. My brother in law recently purchased a unit in a short term approved building and he is on pace to make very good returns this year.
Also, many of the Airbnb’s and VRBOs in Waikiki are not presented effectively. In other words, many owners might not be making great returns because of the hosting/managing aspect, not because of the property or market itself. (Ex: Bad photos, weak descriptions, bad guest communication leading to poor reviews, etc.)
So because of that, I would say choosing good management could be crucial to your receiving a high ROI.
Hope that helps! Message me if you wanted any more info.
@Antoine Martel Yes, Airbnb would be our main focus, along with other similar sites.
Ok.
I know that hawaii is amazing and I like to vacation there as well. But if I were you. I would really look at the numbers and see if it would be a good investment in terms of return.
I've looked at many of these deals in Hawaii with friends and have shown them that many of these properties in Hawaii just don't cash flow enough to make sense. Many investments out of state make much more sense.
I am doing Share Term Rental (STR) in Waikiki for the past few years. Waikiki is an exceptional place for STR, as the demand has been soaring for alternative housing over the past few years. Also, a big number of properties are added, almost on daily basis, to sites like Airbnb and VRBO, which are adding the number of available listings to an unprecendented level. I would like to suggest the following:
Legally, there are very few properties where you can do STR . Non Conforming Certificates, which the State had stopped issuing (nothing after1989) gave any owner a legal cover to perform daily rentals. Properties which come with this certificate, are hard to find and they are very expensive.
If you are plan on managing the STR yourself, and you are not spliting the revenue with a co-host, i think you can do fine. However, anything above 20% would put you close to the bracket of a long term rental for that property. In that case, what is the point of doing STR if you are not making the additional money.
Not every building in Waikiki allows daily rentals. You have to know the buildings which are friendly to STR as far building management is concern. Certain buildings require a minimum of 30 days or a minimum of 180 days as an example. So knowing the building is a must!
Daily rates on Airbnb, have come down in the past few months as more properties are added to the system. However, I still expect average occupancy rate of 80 - 90% is very much possible.
On average as an investor, I would expect to earn between 8 - 12% ROI, if you are doing everything right.
Hi there Sagi! My wife and I help host and co-host Airbnbs in Waikiki. From first hand experience I can tell you that there is great potential in Waikiki for high returns in the short term rental market. You just have to know what to look for, and how to run your vacation rental correctly.
There are specific buildings in Waikiki that allow STRs. I have a list and can provide that info for you if you’d like. My brother in law recently purchased a unit in a short term approved building and he is on pace to make very good returns this year.
Also, many of the Airbnb’s and VRBOs in Waikiki are not presented effectively. In other words, many owners might not be making great returns because of the hosting/managing aspect, not because of the property or market itself. (Ex: Bad photos, weak descriptions, bad guest communication leading to poor reviews, etc.)
So because of that, I would say choosing good management could be crucial to your receiving a high ROI.
Hope that helps! Message me if you wanted any more info.
I agree. I go to Hawaii every year and I've had some awful experiences with horrible filthy airbnbs. I won't bore or gross you out with details but if you run a tight ship then you should be making good money. Also providing basics like coffee, tea and water really help with perceived value thus you can charge a little extra as not all places offer that. Also bogey boards, bike(s) and that sort of thing to offer guest for use really helps. I know as I personally would rent this stuff out in the beach but if my Airbnb has it then I'm saving money on that extra expense.