Hawaii or South America? Something else?

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Hawaii or South America? Something else?

Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

I'm looking for recommendations for a future STR. Would prefer responses from people with actual, personal experience.

Requirements:

1. Single-family residence, not a condo or timeshare

2. On the beach

3. Cash flows.

I'm only interested in something that can pay for itself and make enough cash flow to pay for me to visit a couple times a year. Where have you found success? Maui? Florida? Oregon?

Thanks in advance.

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Mike Neubauer
Rental Property Investor · Waikapu, HI · Member since 2018 · 305 posts · 197 votes
7y

@Nathan G. There’s a few things to think about for Hawaii. One, it would have to be a long term play. I say that because it is now required that you own your property for at least five years before you can even apply for the str permit. After that, there’s a lot of other requirements to get the str permit as well, not more than 30% of your neighbors can oppose, there has to be enough permits allotted for that area, it has to be in an area that is zoned for it, etc. and like @Jay Hinrichs said, it’ll cost you a premium. I live and invest in STRs on Maui and if you want to be on a nice beach you’re looking at $20m+ for a decent house, but that will likely need rehabbing at that price.

The nightly rates those houses command are good, but unless you buy in cash or close to it, they most likely won’t cash flow. Christmas through Mid April is our high season when rates will be best. Ocean view houses, if you can wait the five years and invest right is a much more lucrative play.

Good luck. 👍🏽

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    Hawaii is going to be quite expensive for actual ocean front SFR.. Condos are really the play there.

    Oregon for actual ocean front will hover in the 1 mil range but a block or so back you can get 250 to 500k.. also in some areas of Oregon ( like Lincoln City) you have to have a permit and those are very valuable so you will pay a premium. 

    Google Long Beach Washington  this from what I know is the least expensive actual ocean front in the US. other than maybe some deep south places in MS AL or TX. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    in CA look at Shelter Cove.. its isolated I used to fly in there the airport is super cool.. but some really good values there not sure how STR would work.. but lots of bang for the buck..

    will let others comment on South America I suspect some good values I have seen developments in Brazil for instance but foreign ownership other than Canada scares me personally.. 

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    Thanks, Jay. I grew up in Oregon and am very familiar with Lincoln and even Long Beach (home of Jake the Alligator Man). 

    i know condos are the "easy, affordable" option but I would rather delay gratification and get an actual home. I'm thinking of the long run and having a place where I could live for a month or two at a time, maybe even half the year. 

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  • Mike Neubauer
    Rental Property Investor · Waikapu, HI · Member since 2018 · 305 posts · 197 votes
    7y

    @Nathan G. There’s a few things to think about for Hawaii. One, it would have to be a long term play. I say that because it is now required that you own your property for at least five years before you can even apply for the str permit. After that, there’s a lot of other requirements to get the str permit as well, not more than 30% of your neighbors can oppose, there has to be enough permits allotted for that area, it has to be in an area that is zoned for it, etc. and like @Jay Hinrichs said, it’ll cost you a premium. I live and invest in STRs on Maui and if you want to be on a nice beach you’re looking at $20m+ for a decent house, but that will likely need rehabbing at that price.

    The nightly rates those houses command are good, but unless you buy in cash or close to it, they most likely won’t cash flow. Christmas through Mid April is our high season when rates will be best. Ocean view houses, if you can wait the five years and invest right is a much more lucrative play.

    Good luck. 👍🏽

    6Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Mike Neubauer:

    @Nathan G. There’s a few things to think about for Hawaii. One, it would have to be a long term play. I say that because it is now required that you own your property for at least five years before you can even apply for the str permit. After that, there’s a lot of other requirements to get the str permit as well, not more than 30% of your neighbors can oppose, there has to be enough permits allotted for that area, it has to be in an area that is zoned for it, etc. and like @Jay Hinrichs said, it’ll cost you a premium. I live and invest in STRs on Maui and if you want to be on a nice beach you’re looking at $20m+ for a decent house, but that will likely need rehabbing at that price.

    The nightly rates those houses command are good, but unless you buy in cash or close to it, they most likely won’t cash flow. Christmas through Mid April is our high season when rates will be best. Ocean view houses, if you can wait the five years and invest right is a much more lucrative play.

    Good luck. 👍🏽 

    Ya I think condo is really the only way to go in Hawaii for anyone but the ultra rich..  I am going to Kaanapali in Dec.. you got any thing for a fellow BP member LOL  

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  • Mike Neubauer
    Rental Property Investor · Waikapu, HI · Member since 2018 · 305 posts · 197 votes
    7y

    @Jay Hinrichs hey Jay! Would love to help you out, but all mine are in Kihei. If you decide to come this side, let me know. I’m rehabbing one right now that should be done by Thanksgiving. Aloha!

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Mike Neubauer:

    @Jay Hinrichs hey Jay! Would love to help you out, but all mine are in Kihei. If you decide to come this side, let me know. I’m rehabbing one right now that should be done by Thanksgiving. Aloha!

    OK thanks  do you know Laurence Balter  with Maui flight academy ?  I always go fly with him in his Cirrus when I am there.. its the coolest thing to do on Maui in my mind.. I get to log all those little airports into my log book ..  my Fav is Kalaupapa in the old days it was a cool grass strip.. also the old west maui airport when you flew right over Black Rock at 100ft :)

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Nathan Gesner:

    Thanks, Jay. I grew up in Oregon and am very familiar with Lincoln and even Long Beach (home of Jake the Alligator Man). 

    i know condos are the "easy, affordable" option but I would rather delay gratification and get an actual home. I'm thinking of the long run and having a place where I could live for a month or two at a time, maybe even half the year. 

    have you thought of Hood River or white Salmon ?  maybe too much like were you live now.

    for me the beach in Oregon Washington is far to cold .. and weather too cold.. but you know that already..  how about water front on Columbia river.. we are looking at a Columbia river water front home on the WA side tomorrow for 375k.. and no restrictions. you can watch the ships pass by going up river and salmon fishing right there along with Duck hunting.. and of course big game if your into Elk or deer.. My wife wants it for her to do her writing in..  Me I would like the fishing and watching the boats.

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  • Mike Neubauer
    Rental Property Investor · Waikapu, HI · Member since 2018 · 305 posts · 197 votes
    7y

    @Jay Hinrichs I don’t know him. I know a guy with goflymaui but he’s a helicopter guy. Kalaupapa is a trip. That air strip is paved now but still crazy as heck. Also, that peninsula is about the coolest place on earth.

    1Reply
  • Nathan GesnerBusiness Member
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    OP
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y
    Originally posted by @Mike Neubauer:

    @Nathan G. There’s a few things to think about for Hawaii. One, it would have to be a long term play. I say that because it is now required that you own your property for at least five years before you can even apply for the str permit. After that, there’s a lot of other requirements to get the str permit as well, not more than 30% of your neighbors can oppose, there has to be enough permits allotted for that area, it has to be in an area that is zoned for it, etc. and like @Jay Hinrichs said, it’ll cost you a premium. I live and invest in STRs on Maui and if you want to be on a nice beach you’re looking at $20m+ for a decent house, but that will likely need rehabbing at that price.

    The nightly rates those houses command are good, but unless you buy in cash or close to it, they most likely won’t cash flow. Christmas through Mid April is our high season when rates will be best. Ocean view houses, if you can wait the five years and invest right is a much more lucrative play.

    Good luck. 👍🏽

    Mike, I appreciate your insight. Can you point me to the law requiring five years of ownership? I have never heard of it and can't find anything on it. To be honest, Hawaii is low on my list and only because we used to live there and my wife dreams of going back. Personally, it's too expensive, the government is too loony, and there are just too many negatives to make me want to go there regularly.

    I'm curious how your rentals are working out? You mention in your profile about converting over to long-term rentals which indicates the vacation rentals aren't a stellar investment. Have you compared it to the performance of long-term rentals and are you able to share those numbers?

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  • Nathan GesnerBusiness Member
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    OP
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Nathan Gesner:

    Thanks, Jay. I grew up in Oregon and am very familiar with Lincoln and even Long Beach (home of Jake the Alligator Man). 

    i know condos are the "easy, affordable" option but I would rather delay gratification and get an actual home. I'm thinking of the long run and having a place where I could live for a month or two at a time, maybe even half the year. 

    have you thought of Hood River or white Salmon ?  maybe too much like were you live now.

    for me the beach in Oregon Washington is far to cold .. and weather too cold.. but you know that already..  how about water front on Columbia river.. we are looking at a Columbia river water front home on the WA side tomorrow for 375k.. and no restrictions. you can watch the ships pass by going up river and salmon fishing right there along with Duck hunting.. and of course big game if your into Elk or deer.. My wife wants it for her to do her writing in..  Me I would like the fishing and watching the boats.

    I would consider river-front or lake-front property. I'm not the kind of person to sit on a beach and tan all day, plus I grew up with the Oregon coast and rain so it doesn't bother me. I prefer to sit on a deck and look out at the world or sit in front of the fireplace with a grand view out the windows. In fact, I've always dreamed of a lake-side cabin but I would want something remote/private which doesn't lend itself to a good vacation rental return.

    Columbia is too full of windmills. Some people think they look nice but I think it's destroying the view.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Nathan Gesner:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Nathan Gesner:

    Thanks, Jay. I grew up in Oregon and am very familiar with Lincoln and even Long Beach (home of Jake the Alligator Man). 

    i know condos are the "easy, affordable" option but I would rather delay gratification and get an actual home. I'm thinking of the long run and having a place where I could live for a month or two at a time, maybe even half the year. 

    have you thought of Hood River or white Salmon ?  maybe too much like were you live now.

    for me the beach in Oregon Washington is far to cold .. and weather too cold.. but you know that already..  how about water front on Columbia river.. we are looking at a Columbia river water front home on the WA side tomorrow for 375k.. and no restrictions. you can watch the ships pass by going up river and salmon fishing right there along with Duck hunting.. and of course big game if your into Elk or deer.. My wife wants it for her to do her writing in..  Me I would like the fishing and watching the boats.

    I would consider river-front or lake-front property. I'm not the kind of person to sit on a beach and tan all day, plus I grew up with the Oregon coast and rain so it doesn't bother me. I prefer to sit on a deck and look out at the world or sit in front of the fireplace with a grand view out the windows. In fact, I've always dreamed of a lake-side cabin but I would want something remote/private which doesn't lend itself to a good vacation rental return.

    Columbia is too full of windmills. Some people think they look nice but I think it's destroying the view.

    I am talking about longview to the ocean not out in the gorge.  Myself I am with you give me a nice mountain lake cabin any day over ocean front etc.. 

    Ever been to Lake Chelan you can get water front there I think for about a million and it would rent very well.  its an awesome area 

    my self I am going to be looking for my fishing cabin in the Sierra valley  its just north of Truckee  I really like the fly fishing on Lake Davis yet only an hour to Reno.. plus the Sierra buttes offers great old mining towns wonder full hike in mountain lakes and streams.. very pretty part of CA that is no over crowded and is still very affordable 

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  • Mike Neubauer
    Rental Property Investor · Waikapu, HI · Member since 2018 · 305 posts · 197 votes
    7y

    @Nathan G. I’m not sure what the new regulation is called exactly, but it got voted in about a year ago. If you didn’t own your property by September of 2018 then you had to wait before applying five years. It’s meant to thwart out of state investors mainly.

    Yes, I’d like to move into multi family on the mainland but not because of the numbers as much as the passivity. We manage all our STRs and it is a lot of work. The returns are great, but I’d be willing to shed a little there for a more passive investment with scaleability.

    We’re currently looking at different areas and options from mobile home parks to multi family apartments to development projects. That said, I continue to put in offers on STRs here on Maui if the deal is right.

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  • Nathan GesnerBusiness Member
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    OP
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y
    Originally posted by @Mike Neubauer:

    We’re currently looking at different areas and options from mobile home parks to multi family apartments to development projects. That said, I continue to put in offers on STRs here on Maui if the deal is right.

    Are you buying properties that you won't be able to rent for five years?

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  • Mike Neubauer
    Rental Property Investor · Waikapu, HI · Member since 2018 · 305 posts · 197 votes
    7y

    @Nathan G. No. That only applies to single family residences. I’m buying condos that are zoned for it.

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    Ahh...

    The good news is that I can scratch Hawaii off my list. Thanks for that!

    I'm really leaning towards Panama or Belize. Portugal has always been a draw but only if I would probably only consider that if I were living there 3+ months of the year.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Nathan Gesner:

    Ahh...

    The good news is that I can scratch Hawaii off my list. Thanks for that!

    I'm really leaning towards Panama or Belize. Portugal has always been a draw but only if I would probably only consider that if I were living there 3+ months of the year.

    you can be neighbors with Clayton and Natali Morris  :)  

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    I've been neighbors with worse. 

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    I've been neighbors with worse. 

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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    7y

    Hey @Nathan Gesner our home is a lake front place on Lake Coeur d'Alene, Idaho. It is doing well for us but it is a summer place with little to no action for winter. I did just get a Thanksgiving booking though so maybe that is changing a bit.

    You could take a look at places near Sandpoint, Idaho on Lake Pend Orielle. It is a larger lake and one of the deepest in the world. Sandpoint is also closer to skiing so you might get more folks there year round. Especially if the place is larger.

    Also, there is Flathead lake in Montana. I rented a place there a few years ago. Nice place! Whitefish is a very upscale but not on Flathead.

    All the places I am talking about are a medium drive from where you are to take a look around. 

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  • Roni E.Pro Member
    Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes
    7y

    @Nathan G.

    Maui is too expensive. Could do Florida I would just point out direct ocean front is expensive and better have top notch insurance as for serious damages and talking very expensive insurance

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    Thank, Michael!  Coeur d'Alene is too touristy and crowded but Sandpoint looks like a great option! I'll keep it on the list.

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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    7y

    @Nathan Gesner I wouldn't say it is too touristy at all. Yes it is a lot bigger than it used to be, but I find it still homey and fun! Our home is in Harrison which is down the lake about 35 miles (hwy 97) and it is a tiny little town.

    I guess it depends on your viewpoint. Sandpoint is a great option IMHO. I grew up in the CdA area so I am biased, but I went to Sandpoint and Bonners Ferry (that is another option as well) right on the Kootenai River. If you want quiet, that is the best choice in north Idaho. Sandpoint is on the map these days and it has a cool trendy vibe.

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  • Jason Graves
    Rental Property Investor · San Diego, CA · Member since 2018 · 242 posts · 234 votes
    7y

    @Jay Hinrichs

    Are are talking about Black rock in Maui at the Sheraton hotel?

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  • Parker Eberhard
    Contractor · Seattle, WA · Member since 2019 · 339 posts · 325 votes
    7y

    @Jay Hinrichs i love the Oregon coast and feel that it is more about walking along the beach than actually going in the water (unless you surf)

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