All Forum Posts by: Bryan Vukelich

Hi @Paul K.

It looks like you've thoroughly thought this out and that you are also getting some good advice from other BP members.  

Throwing my two cents in:

* I agree that if you decided to buy here, plan on selling the unit when you PCS off O'ahu as the most likely outcome unless you want to feed the property.  Depending on type of property, overall real estate historically appreciates on O'ahu from 4.3%-4.7% annually (can be higher in the more desirable neighborhoods) - but obviously no guarantee this will continue.  However. . . 

I'm amazed how strong the market is still on O'ahu despite the higher interest rates. I've had quite a few buyers postpone their goal of buying here because of the higher rates, but I still have many clients looking and I'm still seeing high demand for real estate and multiple offer situations are not uncommon. I just listed a nice 1 BR non-STR unit in the Ala Moana area - seller had multiple offers and is in escrow in under a week. If the deal closes, it will be the highest priced selling unit in the building in over 1 year.

So the market is still very strong despite the higher rates.  And with the lack of inventory, if rates do go down, and there is no major US or global down turn, it seems like demand for housing on Oahu will only increase - thus leading to higher home prices.  

* Also, please note it is very difficult (but not impossible) to find quality off-market opportunities on O'ahu.  I regularly solicit off-market properties hoping to find opportunities for clients but opportunities are few and far between and only very rarely are they "deals."  

* Lastly, if you think you'll likely be here 4+ years, and eventually want to retire here, personally I don't find it that risky to acquire a home here while you are based here.  Based on historical data, you could have a nice chunk of equity by the time you PCS off O'ahu.  

Wish you well and if I can provide you any information to help you with your decision, I am here to serve you.  Good luck 

Hi @Mike Duncan,

I'm on O'ahu, but here are a couple sources that might be of value to you.  First, here is the Hawaii Landlord Tenant Hotline phone number:  (808) 586- 2634.  They have proven to be helpful to me in the past.  

Also, if you click on the link below, on the last row, last column of the page you'll find several real estate attorneys that might be of value to you.  

A'ole Pilikia @David Campbell. Contact me at any time.  

Aloha @David Campbell - you mentioned that the property is in prime location for short/midterm rentals. I'd double check to make sure it is legal to do short term rentals in the building as I am unaware of any legal STR building on O'ahu with an owner occupancy rate that high. My guess is the building is 30 day minimum of rentals.

You're welcome to email me the name of the building and I can let you know for sure.  

Hi @Joani Pederson and @David Campbell

If your realtor cannot provide you current financial data on vacation rental units in popular buildings you are interested in, he/she is not doing his/her job.  Only caveat to that, is that there are a few boutique buildings in Waikiki that rarely have units listed on the market so it can be challenging to get recent financial data.  Even then though, a competent vacation rental manager should be able to give you a good idea what a unit can gross on a monthly basis in the current market.  

One of the largest vacation rental managers in Waikiki has told my clients and I that his goal is to maintain a 85% occupancy rate for units his company manages.  I know some self managed units, where owners maintain a 90%+ occupancy rate.  

And yes, the higher interest rates are definitely making it more challenging to get the numbers to work if you are financing the acquisition.  However, I know of some owners that are consistently grossing $10-$14k/mo at their units (currently units are generally selling between $700k-$850k) at Waikiki Banyan.  And I've seen financials on some studios ( currently selling in the high $300k-$550k range) that can gross $4k-$7k, depending on the time of year. 

I work with a lot of investors in the STR space. If I can be of any value to you, you're welcome to contact me at any time.

Hi @Simon Smith - I serve the O'ahu market and work with a lot of investors and if you have any questions, I'm here to serve you. Quick fyi - with a budget of $200k, your only option for a "fee simple" STR on O'ahu would be a studio in the Ala Moana Hotel. Studios can generally gross $2k-$5k a month and studio units have a monthly HOA due of just over $1,200. You can check listings here:

https://halepunahawaii.com/ala-moana-hotel/

If looking for a long term rental property, most options will be studios, but it is possible to find a 1 BR condo under $200k but it will likely need some TLC.

Contact me any time if I can be of value to you.  

@John Park - my pleasure.  Contact me any time if I can be of service to you.  

Hi @John Park, 

Looks like you have a good pulse on the O'ahu STR market. Regarding Ilikai, the main reason is that for units located on floor 2 and floors 22-25, if you operate any of those units as a short term vacation rental then you are required to use the hotel's house cleaning and maintenance services - which is very costly and pretty much kills the reason for owning an STR in the building. Therefore, these units generally take a lot longer to sell and also sell for a lower valuation. Currently, 17 units are the market are on those floors. Another reason though is that some of the units are overpriced.

Other than that, I am a big fan of the building. And I was just mentioning to a new client the other day - although not all of my clients buy at Ilikai, it is usually a favorite STR building for many of them.

And there are no new upcoming laws or restrictions. I'm guessing you are aware of Bill 41 that passed last year. I know a person who was closely involved with getting some positive changes made to Bill 41 that were more investor friendly. He, and I, and others I have spoken to think that it is unlikely that any new regulations will happen any time soon - if at all. But anything is possible - however, the vacation rental industry is better organized, and funded these days, and they will fight any further attempt to regulate STR's on O'ahu.

Happy to answer any other questions you have.  

Hi @Loren Clive and @Suvarna G. - I just want to clarify, stats can be misleading. The stats provided are for all condos and while that is impressive for Maui, it is misleading about O'ahu and the STR market here. I can't speak for any other islands but it is still a sellers market for STR units on O'ahu and I'm regularly seeing multiple offers situations and units selling for record amounts in multiple buildings this year. For example, below is a price chart for Waikiki Banyan since Jan 2022. In July 2022, average selling price was just about $600k, average price now is over $720k with some units recently selling above $800k and one just went into escrow at $850k (these are not yet reflected in the chart).

https://matrix.hicentralmls.co...

Hi @Account Closed - well each island has its own regulations, so I can only speak for O'ahu though I've had clients also look at properties on the other islands.  As far as which island is most attractive to investors, that seems to come down to a personal basis.  But based on feedback from my clients, many of them decide to invest on O'ahu due to the large number of tourists that visit each year, that O'ahu offers city as well as county life, and that there is a large military population that supports the housing market.  

And you are right, property values have increased quite a bit the last couple of years but there are still many people looking to buy STR's on O'ahu so many still think it is worth investing here. Personally, I am very bullish on Hawaii real estate if you plan to hold long term.

If you want to share, what market is your first STR in? How'd you choose that market and what appeals to you about investing in Hawaii?

If I can be of value to you on O'ahu, you are welcome to contact me at any time. I track the STR market very closing here. And if you want referrals to any quality agent on those other island, just let me know.