STR on Condotels?

[Joani Pederson]

I'm looking into STR in the Waikiki area. Most are small studios, hotel rooms that you can invest in and rent out as STR. Any one with experience over there? I'm going for "fee simple" not "leasehold". So far the hardest part has been getting the real numbers of occupancy rates? Anyone with experience investing there, I'd love to hear from you!

[Bryan Vukelich]

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.