Investing in Hawaii condo

[Nicole Chang]

Hi All,

My realtor brought me a deal for a 1 bedroom condo in Wakiki that she says rents for 2000/month or 97/night on Airbnb. The condo is not on the market yet and seller wants 236K, with a 870 HOA fee and standard 75/month in taxes. The HOA fee seems pretty steep to me. Does anyone out there have a POV on whether this is a good deal? It probably won't cash flow unless I put a lot of cash down. Thoughts?

[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