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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  • Sofia Sharkey
    Property Manager · Kansas City, MO · Member since 2018 · 280 posts · 221 votes
    7y

    @Nathan G.if you’re considering South America, Sam from life afar could be useful to you -https://www.lifeafarinvestments.com/

    They have turn key properties ready to become STR.

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  • Mike LambertPro Member
    Investor · The Americas and Europe · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    @Dean Letfus

    Being an Australian citizen, knowing New Zealand very well and having friends who have invested there, I respectfully totally disagree with Dean's view of the New Zealand market. It's a huge bubble waiting to pop. There is no cash flow to be had. It's not because the market has been going up in the past that it will continue to do so. Assuming that is what US real estate investors wore doing in 2006. New Zealand has one of the worst house price to rent and house price to income ratios in the world. I wouldn't invest there with a ten-foot pole!

    As @Hadar Orkibi mentions, this is a capital gains day. House prices cannot go to the sky because incomes to pay rents and mortgages are definitely not going to the sky. Buying just for capital gains is pure speculation. It's an illustration of the greater fool theory, according to which one needs another fool to buy from us at an even higher price than what we paid. This works until it stops working and unsustainable bubbles eventually pop.

    Don't believe me, just watch! New Zealanders (and Australians) are massively investing in real estate in the US because it makes little sense to do it in their own country from a financial investment point of view.

    @Dan H.

    I wrote about Belize in a recent post. It's actually not easier for me to find it that it is for you (by finding it through my profile). If you can't find it, let me know and I'll be happy to find it for you.

    @Sofia Sharkey

    Some people have commented about LiveAfar not delivering the promised returns on the BiggerPockets forum (they changed names so it might not be that easy to find).

    Even if they are/were delivering their promised returns, I think that they are too low considering the areas where they are investing. You can get the same returns they promise by investing in the US so why would you bother. This is because the strategy they're using (buy & hold) isn't the necessarily the best for the market and their investors. It's good for them because they make fees year after year.

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  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    7y

    I like the prior post. Is amazing how excited people get when they have no clue about the reality of something.

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  • Diogo Capela
    Member since 2019 · 6 posts · 2 votes
    7y
    Originally posted by @Nathan Gesner:
    Originally posted by @Diogo Capela:
    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.

    Portugal os "The Place" right now for STR.

    Don't understand why you think you must stay for that long in Portugal.

    if you want some insight for an experienced person in this market, please feel free to send me a PM.

    If I'm traveling outside the continental US, I would prefer to stay longer. I hate taking a week vacation and spending 2+ days traveling plus all the time required to adjust sleep patterns.

     But your intention is not to Invest?

    If so, you can be in your own country. You just need a good portuguese STR management company to help you.

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  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    7y

    @Mike Lambert, so as you have never invested here and clearly don't know what you're talking about, we should take your advice.  Interesting behaviour. You would be hard pressed to find a better, more stable and safe market. Unlike your native Australia and the USA.  So it's your lose. Keep your 10 foot pole close by. I'd rather invest where my risk of loss is pretty much zero, my capital growth and rental growth are virtually guaranteed, there are no tenant issues and landlording is very passive.  You don't like all that positivity?, that's fine, but no point bagging a market you clearly know nothing about at all.  I know a  veterinerian but I don't coment on how to treat sick dogs......

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

    Nathan we pulled the trigger on the Columbia river water front..  140 feet of water front.. ocean going vessels passing every 15 minutes or so..  that's cool.. great salmon fishing all around .. etc.. good value at well under 500k.. and being river front with Sandy beach it will air bnb really well.. which is primary focus.. 

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  • Mike LambertPro Member
    Investor · The Americas and Europe · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    @Dean Letfus Yes I love positivity and I hope the market continues to go up like you describe and that you and the others investing there continue to do great business there.

    On the one hand, a forum like this one gives the opportunity to have a debate which is a great thing and everybody, including myself, who puts anything out here should expect, respect and even welcome diverging opinions. On the other hand, I believe that personal attacks have no place in this forum.

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  • Mike LambertPro Member
    Investor · The Americas and Europe · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    @Dean Letfus And, to set the record straight, I was a banker covering both Australia and New Zealand, including real estate. I have seen pretty much all types of real estate transactions, from residential commercial so I happen to know that market very well. And I completely agree with you, we should only comment on matters that we know about. I have always held myself to that and will continue to do so. You invest in New Zealand and I respect and welcome your opinion! As the great Dale Carnegie said: "Let's not criticize, complain or condemn". Agreeing to disagree can be a great thing! :)

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  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    7y
    Originally posted by @Nathan Gesner:
    Originally posted by @Matthew Irish-Jones:

    @Nathan G. Check out the Adirondack mountains in NY. Beautiful lake from properties. Specifically check out Rocky Point Properties. They sell lake homes and run the rental program yeah round. Full disclosure: my family owns Rocky Point.

    Still one of the best options in the ADKs for mountain lake front properties.

    I somehow missed your post. Upstate NY has some nice areas like Thousand Islands, but that state is not my bag, for many reasons.St

     The State laws can be tough to deal with.  ON these luxury rentals it's usually a non issue though.  Taxes are always a factor in NYS, its a line item you have to plan for.  NO escaping the tax man. 

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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

    @Dean Letfus and @Mike Lambert

    It's actually possible for two people to see the same thing and have different opinions about what they are seeing. Please don't turn this into a personal attack and make me moderate. Thanks.

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

    Nathan we pulled the trigger on the Columbia river water front..  140 feet of water front.. ocean going vessels passing every 15 minutes or so..  that's cool.. great salmon fishing all around .. etc.. good value at well under 500k.. and being river front with Sandy beach it will air bnb really well.. which is primary focus.. 

     Is this already built or are you developing? Pictures!

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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:

    Nathan we pulled the trigger on the Columbia river water front..  140 feet of water front.. ocean going vessels passing every 15 minutes or so..  that's cool.. great salmon fishing all around .. etc.. good value at well under 500k.. and being river front with Sandy beach it will air bnb really well.. which is primary focus.. 

     Is this already built or are you developing? Pictures!

    I will PM you.. with the link

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  • Mike LambertPro Member
    Investor · The Americas and Europe · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    Originally posted by @Nathan G.:

    @Dean Letfus and @Mike Lambert

    It's actually possible for two people to see the same thing and have different opinions about what they are seeing. Please don't turn this into a personal attack and make me moderate. Thanks.

    @Nathan Gesner I totally agree. And it is even possible that both @Dean Letfus and I are both right. Real estate prices in New Zealand could be continuing to go up in spite of the fact that the price to rent and price to income ratios seem unsustainably high. This is happening in many markets, including my current home market of Canada.

    The difference between us is that he thinks that the "risk" is more to the upside while I think the risk is more to the downside. And, since I am risk averse, I prefer to stay away. By doing so, I realize that I might be missing an opportunity but I'm ok with that.

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  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    7y

    @Mike Lambert and @Dean Leftus you guys are arguing a mostly moot point seeing as New Zealand banned foreigners from buying property there last year. Unless the OP is a kiwi, Australian, or Singaporean or knows of some slick loophole, he wouldn’t be able to buy property there anyway (without first being granted citizenship).

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  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    7y

    @Mike Lambert
    "The difference between us is that he thinks that the "risk" is more to the upside while I think the risk is more to the downside. And, since I am risk averse, I prefer to stay away. By doing so, I realize that I might be missing an opportunity but I'm ok with that."

    Completely agree with you there Mike.  And of course history is not always the best lens for the future. However int he GFC Auckland prices dropped less than 6% and that was the biggest fright we've had in decades. We have chronic shortage of supply which is ongoing due to our red tape in NZ. So whilst there is lots of hand wringing from poverty groups and the left, the erality is that our real estate has about 100 years of stable growth history and we don't have any issues that can really upset it other than global meltdown. I own property in NZ in several areas and even the no growth zones boom eventually and rents rise with monotonous regularity.
    And @Steve K., our new laws are easily circumvented so foreign ownership is still well possible!

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  • Joseph Grimaldi
    Rental Property Investor · Santa Monica, CA · Member since 2019 · 1 post · 1 vote
    7y

    @Nathan G. Shady cover Oregon - rogue river

    1Reply
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