Owning rentals on the Big Island, Hawaii.

[Ole Matson]

Hey all, I think I'm posting in the correct forum. 

I see that vacation rentals are very popular in Hawaii. I'm looking in the Puna area, south of Hilo. 

For anyone who has experience there, what would be better, vacation rentals or long term type rentals?

Would people in Hilo, probably UHH students, rent in an area like Puna? It seems that one could get a good deal on a fixer upper, do some remodeling, and rent for a definite monthly cash flow in that area. 

I would be living around Hilo and manage the properties until I could afford a PM company.

I'll answer any questions to help give you more understanding! 

Any thoughts appreciated! Thanks! 

[John Dirgo Deweese]

You have two very different animals there -- long term and vacation rentals.  You can probably have a better chance of being cash-flow positive in Puna with long-term rentals -- although at the lower rental rates, it won't be much money.  Vacation rentals would look, on the surface, as being the better bet, but the purchase price of property that will be successful as a vacation rental is 3x to 4x as high -- and with vacancy, you are not going to get 3x to 4x the rent.

UHH students tend to stay as close to the University as possible.  If you get out to HPP or so, you could possibly attract students but much further than that and the commute will turn off the students.  Heck, it turns off a lot of people that aren't students but work in Hilo. 

I would tell you how and why I know this but I recently mentioned my property management experience with vacation rentals in Hawaii and got my post removed for "self-promotion" -- so I won't.  Suffice it to say that I have direct experience in that market with both of those kinds of rentals.