Rental Property Investor · Vancouver, WA · Member since 2018 · 22 posts · 13 votes
Hello,
Does anyone own a short term vacation rental in Hawaii?
I've noticed some small 2bd condos on Maui for around 150k with PITI and HOA coming to $1,000/mo. These same condos rent out for $150/night in peak season and $90-100/night in the off season. It's hard to imagine that with 20-40% downpayment that these condos wouldn't pay for themselves or atleast cash flow 10%?
Everything I read says short term vacation rentals aren't worth it.
Real Estate Broker · Wailea, HI · Member since 2016 · 134 posts · 77 votes
7y
Look closely as those condos are likely leasehold properties. That adds at least an additional $800/month to your expenses. In most cases, that kills the deal.
Real Estate Broker · Wailea, HI · Member since 2016 · 134 posts · 77 votes
7y
Look closely as those condos are likely leasehold properties. That adds at least an additional $800/month to your expenses. In most cases, that kills the deal.
Rental Property Investor · Waikapu, HI · Member since 2018 · 305 posts · 197 votes
7y
I have three units on Maui. If you find a 2bd unit that is zoned for short term rentals and less than 450-500k it is most likely a leasehold property. Meaning you Don’t own the property indefinitely, but for an allotted piece of time. I’m happy to take a look at it for you and give you my thoughts. I love on Maui.
Rental Property Investor · Vancouver, WA · Member since 2018 · 22 posts · 13 votes
7y
@Mike Neubauer
Would a leasehold property be a poor investment if you found a property with 15-20 years still remaining on the lease? Or would it be worth it to pay more and get a property where you own everything?
I own on Kauai's south shore and my short term rentals has provided positive cash flow. I just sold my unit for a huge profit after 6 years, $200k escrow. I sold it with positive cash flow in the 6 months upcoming, which was crazy, but I needed the cash for another deal. In hindsight I should have kept it. Bigger Pockets is showing me the light. It was fee simple. However, beware of HOA/AOAO fees, often steep and climbing. I didn't want to continue to sink my money into those costs.
Rental Property Investor · Campbell, CA · Member since 2017 · 419 posts · 499 votes
7y
@Pam Ryan nice to see another Kauai success story. I’m in the same area as you and there’s a decent chance I put an offer in on the one you sold. Lol I’m buying buying buying but prices have def gone way up that last 12 months.
@Mike V. my goal is to trade up to a single family ocean view with pool and ohana over the next few years, using my rental income and equity to get myself there...so far so good! are you managing your units on your own (as I am) or through property manager? Are you active in Poipu Kai Resort?
Rental Property Investor · Waikapu, HI · Member since 2018 · 305 posts · 197 votes
7y
@Carter Thomas you’d have to run the numbers on it, just know that the equity decreases with every year.so they are strictly cash flow properties if they work out. I know people who buy them but personally, I don’t usually look at them. I have actually seen where you can buy out the lease too but I’m not sure how that works or if it is always available. I assume this property you are referencing is on the west side or in Maalaea? If it’s on the west side make sure you look at where exactly it is as they’re having big issues with erosion on the coastline and people are dumping their places.
Rental Property Investor · Campbell, CA · Member since 2017 · 419 posts · 499 votes
7y
@Pam Ryan I’m almost exclusively in Poipu Kai and self manage from California. No money to be made with the property managers taking 40% gross. Seems insane so many people agree to their egregious rates.
@Pam Ryan I’m almost exclusively in Poipu Kai and self manage from California. No money to be made with the property managers taking 40% gross. Seems insane so many people agree to their egregious rates.
@Mike V. I do the same (self manage/so cal) and am always looking at the opportunity to trade up with a goal of buying single family, view, pool w/ohana. Love to trade notes on island sometime. Are you active in PKA AOAO at all?
Rental Property Investor · Campbell, CA · Member since 2017 · 419 posts · 499 votes
7y
@Pam Ryan I’m not active with any of the AOAOs. Don’t have the time or interest. They debit my account every month and if I hear from them it’s only bad news.