All Forum Posts by: Trey Brown

Search for Airbnb in Hawaii. 

There are lots of posts, but you should be aware of the hidden costs. 

Hawaii is cracking down on Airbnb's, and requiring permits, which aren't that easy (or cheap) to get.

You also have to pay a transient tax of 10.25%, and a GET of 4.712%. So you need to take a minimum 15% off your income before you look at whether its a good deal. 

After HOA's and taxes, you may make $30/night, if it's legal, and if it's always rented.

Now pay a cleaning company and your mortgage with what's left. I doubt you'll make any cash flow.

Lastly, with HOA's comes rules. They could at any time decide they no longer will allow short term rentals. Then what's your exit strategy?

Good luck, but I think you'd have better luck with something else

Your rent to price ratio exceeds the 1% rule, so it's at least worth looking at. 

I'd be more conservative on your homeowner's insurance though, but that still isn't going to be a large expense. 

Allocating 10% each for vacancy, maintenance, Cap-X, and management you should set aside a minimum of $250/month. 

That leaves $375.

Subtract your mortgage, and you're at $100 before insurance and property taxes.

You're not going to pocket a lot of money on this one, and it's going to take a while before you get your down payment back, but it's probably not the worst deal to start with. 

I'd be very diligent in vetting the current tenant. If you have to evict or they do decide to move, you need to have your reserves already in place. 

Thanks,

Trey