Aloha from Honolulu, HI and Hey from Bellingham, WA

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Aloha from Honolulu, HI and Hey from Bellingham, WA

Dana R.
Investor · Bellingham, WA · Member since 2013 · 50 posts · 28 votes

I'm a freelance writer living in Bellingham, Washington who travels to Honolulu several times a year for business. I know… it’s rough, especially when the weather here is 42 and raining. : )

In 2010, I bought a one-bedroom vacation rental condo in Waikiki. At that time, prices were low for Hawaii. The cash flow was so good that I wound up buying another one-bedroom condo in the same building in 2012.

I use Vacation Rental By Owner (VRBO) to advertise and rent out my condos. If anyone wants to chat about owning vacation rentals, I'd be happy to share my experience.

I got started in real estate in 1989 when I bought my first house in Olympia, WA. Paid $40K and sold it a year later for $65K. I used the profit towards a down payment for a house in Bellingham where I still live.

Hey Brandon, I'm probably one of the few people on Bigger Pockets who has actually been to Montesano. From 1986-1991 I lived and taught in Elma! My then hubby and I used to take walks in Lake Sylvia State Park. Even in the late 80s, Monte was a WAY better town than Elma.

I found Bigger Pockets a few months ago when I was trying to figure out if my condos were actually a good investment or not. Yeah, I put down hefty down payments for both condos so they cash flow well. But does that mean they are good investments? I didn’t really know. Found Bigger Pockets and have been reading and listening to podcasts ever since. I am so impressed with the generosity of people who share their vast real estate knowledge. Thanks, everyone! I am entirely grateful to be here. ~ Dana Rozier

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  • Georgia Leon
    Sammamish, WA · Member since 2013 · 1 post · 0 votes
    12y

    Hello,

    I live in Sammamish, WA - (eastside of Seattle, near Redmond). I am interested in learning more about vacation rentals, flights from Bellingham to Waikiki is not too expensive to travel.

    I am new to this site, and looking forward to hearing more.

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  • Michele FischerPro Member
    Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    Welcome Dana! Love it when the washington key word means the state not DC. I also have been to Monte and Lake Sylvia. Sounds like you have a fun portfolio!

    Podcast Guest on Show #79
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  • Mary B.
    Real Estate Investor · Lansdowne, PA · Member since 2013 · 1k+ posts · 656 votes
    12y

    Welcome to BP and happy investing. :-)

    Kudos,

    Mary

    0Reply
  • Mehran K.
    Investor · Wichita Falls, TX · Member since 2010 · 3k+ posts · 603 votes
    12y

    Welcome to the site @Dana R.! Thanks for taking the time to introduce yourself. It's good to know there is someone who can chime in on vacation rental questions :)

    Hope to see more of you around here! I'm going to tag @Brandon Turner

    to make sure he see's your post.

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  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    12y

    Hey @Dana R. welcome to the site! And you have no idea how excited I am to read your post, not only cause you know Montesano but the last 24 hours my wife and I have been talking A LOT about moving to Hawaii for a short time to pick up a few rentals for VRBO rentals. How ironic that you left this post today! I think it's a sign I should move there :) So yeah, I definitely want to keep in touch and talk more about your experiences!

    And what kind of freelance writing do you do, out of curiosity? I love meeting other writers!

    Podcast Guest on Show #92
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  • Zach Schwarzmiller
    Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
    12y

    Welcome Dana! I am working on an interesting transaction up in Bellingham right now!

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  • Michael Mazzella
    Flipper/Rehabber · Honolulu, HI · Member since 2012 · 120 posts · 87 votes
    12y

    Aloha Dana,

    Good to see another Hawaii investor here. I bought my first property here in 1993, and I've been investing on Oahu full time for about 11 years. From an ROI standpoint, you are correct - it is difficult, though not impossible, to find a good cash flowing property here. Usually if you're investing large sums of money to create cash flow, the numbers will often kill your deal. That said, there are the rare exceptions, and I have been able to collect a small number of them, and a couple of my friends have done likewise.

    The bigger money in residential RE here in Hawaii is in one-off house flipping, and residential development. Some private lenders are making good money, too. Six-figure, and even 7-figure deals with development are happening right now. I just made an offer yesterday to a distressed seller with a plot of land containing 4 old houses, and enough land to build out 2 additional houses. If we get the deal, and choose to develop the property to its max potential, there is a profit of $1.5m at the end. It's exciting stuff!

    Best wishes to you, Dana, and feel free to connect with me. Create an Awesome day!
    ~Michael

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  • Dana R.
    OP
    Investor · Bellingham, WA · Member since 2013 · 50 posts · 28 votes
    12y

    Hi Everybody!

    Thanks for the warm welcome.

    Georgia—If you have a specific question about vacation rentals, I’d be happy to answer it.

    Mehran—Yeppers! Looking forward to chiming in. Thanks.

    Brandon—Watch out! If you buy vacation rentals in Hawaii, then you wind up flying over there a lot. Not to maintain your units, but to soak up the sun. : ) Waikiki is generally sunny and 80 year ‘round. Sigh.

    If you wanna talk by phone sometime, let me know. I can fill you in on what I’ve learned.

    As for the kind of freelance writing I do—I develop online and print curriculum for adults and the K-12 market. Currently, I’m developing courses for aerospace apprentices and employees. For fun, I self publish books. A few years ago, I published a book for kids called Natural Hawaii. That book got me started in Hawaii real estate. Since I had to fly to Hawaii to do research, I started looking at real estate, just for fun. The next thing you know, I had purchased a condo.

    Zach—C’mon, don’t hold back. Tell us all about your interesting deal in Bellingham!

    Michael—Pleased to meet another Oahu investor. Your new deals sounds exciting. Wow! What a potential profit.

    Real estate prices on Oahu are crazy. Tear down houses in the Honolulu area go for 600+K. Really. When I hear people talk about real estate prices in other parts of the country, I can hardly believe it. A house for $30K. Really!?? Bellingham prices are high enough. Seattle’s are even higher. And Honolulu, sheesh!

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  • Joe Sillaman
    Ewa Beach, HI · Member since 2013 · 145 posts · 42 votes
    12y

    Aloha Dana,

    I own and manage a VRBO vacation rental in Haleiwa! It's been a great experience thus far. No place is better for vacation rentals. Surfers and families looking to get away from the touristy South enjoy it up in North Shore. Only thing that kills me is the 14% of DET and TAT...Do happen to have any in Haleiwa?

    0Reply
  • Tom Fontaine
    Gainesville, GA · Member since 2013 · 14 posts · 6 votes
    12y

    Dana,

    You are doing what I have wanted to do for some time. How did you choose your location in Hawaii? I visited the Big Island last year and stayed in a place from VRBO and really saw the opportunity there. I am new to investing so not sure if I should start there but also looking a little closer in Ft Lauderdale FL to buy and rent a property there through VRBO. Do you invest in condos? Do you find the HOA fees are worth it instead of buying a SFH and doing maintenance yourself or using the fee towards the monthly mortgage in a sfh? HOA fees can be pretty high and I want to make sure it will be worth it in the long run.

    Great to have you hear with some working info on Vacation rentals.

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  • Dana R.
    OP
    Investor · Bellingham, WA · Member since 2013 · 50 posts · 28 votes
    12y

    Aloha Joe!

    Haleiwa is a great town. Glad to hear your VRBO rental is doing well there.

    At this time, I only have vacation rentals in Waikiki. I know what you mean about the GET and TAT taxes. 14% is pretty steep. I have my guests pay the taxes so the only pain for me is to pay my quarterly taxes to the state.

    0Reply
  • Dana R.
    OP
    Investor · Bellingham, WA · Member since 2013 · 50 posts · 28 votes
    12y

    Aloha Tom,

    I chose to invest on the island of Oahu because it gets the most visitors per year out of all the Hawaiian islands. And most tourists wind up going to Waikiki. Once I narrowed down Waikiki condos, I spent 6 months researching all the condos on VRBO. I looked to see which buildings were popular, which units were rented out most of the time, and how much the owners were charging per night.

    Then I did research on the buildings that were popular with tourists. How much did the units go for? What were the HOA fees like? How do you get someone to clean and maintain your unit if you buy there but live 2,500 miles away?

    For me, condos were the only way to go for a couple of reasons. SFHs in a heavily touristed area in Hawaii are out of my price range. Houses in Hawaii need lots of maintenance because of the weather. I just didn’t want to deal with the maintenance and expense of a house that was across the Pacific Ocean.

    You're right, though. HOA fees are definitely something to consider when buying condos. For me, the fees are totally worth the headache of someone else maintaining your property. That said, some buildings have outrageous HOA fees. I nixed those as investment properties. I bought my condos in a building that has low HOA fees and is financially sound.

    As always in real estate, you have to run the numbers to see if the purchase makes financial sense. In Waikiki, I can charge relatively high nightly rates to recoup the costs associated with the purchase of the condo.

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  • Tom Fontaine
    Gainesville, GA · Member since 2013 · 14 posts · 6 votes
    12y

    Thank you so much for the details and it all makes a lot of sense. Do you have HOA fees that you just won't go above or do you just run the numbers as a whole after doing your research? Does VRBO allow you to search for particular addresses or did you have to search a different way?

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  • Dana R.
    OP
    Investor · Bellingham, WA · Member since 2013 · 50 posts · 28 votes
    12y

    I just run the numbers as a whole once I do my research. And, once you do your research, you'll discover what typical HOA fees run in your area. If a building has way higher HOA fees then I always wonder why. Poor management? Meticulous grounds that have to be maintained? Ancient plumbing that is wasting water and will need to be replaced soon?

    Just now, I typed in Waikiki, HI into VRBO's search engine. Came up with 717 vacation rentals. I am kind of embarrassed to admit that I looked through all 717 when I was doing my research a few years ago.

    Now, I'd be much smarter. Now, I'd get a hold of a real estate agent in the area where I was interested and ask him or her which are the best buildings for vacation rentals. And then I would dive into those particular buildings to run the numbers.

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  • Tom Fontaine
    Gainesville, GA · Member since 2013 · 14 posts · 6 votes
    12y

    Thanks Dana! Thats very helpful.

    0Reply
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