Investment in condo for Airbnb rental idea?

[Nancy Tran]

Hi! I'm brand new in real estate investment. My parent and I decided that we wanted to invest in a condominium with ocean view at Kihei, Maui. We wanted to do all cash down payment for property around $400-$500K.We live in different state so we plan to hire the property management. The HOA fees around 500-1000. I just want to know if will there any positive cash flow in invest this business with vacation rental? Will you be able to have the booking for 80-90%?

[Mike V.]

@Patrick Franta, Yes, straight CoC returns. I've purchased two this year; combined price of approx 1.4m. I live in California so lenders require the standard 30% there. About 420k in with the remaining 70% financed 30 year fixed. Approx another 50k in upgrades, repairs, new furnishings, etc.

Prop 1 purchase price approx 650k. All in costs approx $4400 per month (mort, aoao, prop taxes, insurance, advertising, cap ex etc). Rents for $325 a night (off peek $450 peek) and am averaging 90% occupancy booked solid through the next 9 months. Will net appox 70k on my 225k (195k down plus 30k upgrades) CoC = right around 30%) This is my worst performer.

Second condo purchased approx 725k with another 5k in upgrades.  All in costs  $4200 per month and is renting for $350 a night off peek and 500 a night peek.  Only closed in June and am already 70% booked through the next 12 months.

My biggest home run is a condo I purchased 4 years ago for around 450k.  Put 80k remodel in it.  Rents for 310 a night.  Did a cash out refi and it appraised around 750k... pulled out every dime to purchase my last one.  Its getting me infinity return.. I have zero into it and am netting around 40k a year now and 70k from the new one... all net. 

All my properties average 90%+ occupancy.  All properties purchased off the MLS at close to asking price.  Just need to know how to spot the winners and how to market them correctly.  And this is all done from my couch in California.  I left my 9-5 job years ago and haven't looked back.  Done a lot of research on the other island and nothing gets close.  But I also know a LOT of people who own here in Kauai and get killed because they don't know what they're doing.