Real Estate Broker · Mililani, HI · Member since 2016 · 217 posts · 253 votes
-Hawaii properties only
-Rental listings in the past 0-3 months
-Any residential property type
-Anecdotal data ok
If you wouldn't mind sharing what you've seen recently for your rental listings (time on the market, drop in list price, number of applicants, etc.). Specifying which island, which neighborhood, and property type/size would be helpful. We've asked around in our circle and have received mixed responses from across Oahu. Figured I'd tap the BP circle and see what people are experiencing.
For us, we've seen a drop in calls/emails inquiring about our rental listing. What made it noticeable was how quickly it changed. For example:
April - Oahu (Mililani) - numerous applicants - rented in 10 days (this has been typical for quite a while)
May - Oahu (Mililani) - 4 applicants - rented in 22 days
June - Oahu (Wahiawa) - 5 applicants - rented in 25 days
All three units are 1 and 2 bedroom condos, competitively priced.
Looking at Mililani Parkway for example. In April/May most Craigslist listings were around $1800 and within 2 weeks they were down around $1700. We listed ours at $1660.
We have another unit in Wahiawa coming available in late July. Should be interesting.
I've lived in Hawaii for my whole life and it seems like there has never been a better time to be a landlord (on Maui that is). The lack of rental inventory allows it to be a "landlords market" in almost every sense of the phrase. I don't think it will be changing anytime soon.
Diamond Head/Kahala area: Over 2 1/2 months showing SF house, over 3k sq ft, 16 inquiries, 10 tours, 3 no shows, 3 never arranged a tour. 0 rented. We did not see how bad the market was in April. Since then, we dropped price $1500 a mo. and that's the sweet spot now. A realtor friend said she has not seen the market so bad for 17 years. Comps stay on the market for 30 days, some for 90+ in luxury market. Short term agents call us and employ heavy sales tactics to get us to list as a VR, but we ran numbers and don't see it as a viable model, but that may change.
@Isi Nau how did your July rental go? I have a rental in Mililani that usually has numerous calls and now none. I am debating whether to drop the price more or wait it out. its a 3bd/1bath. I was asking $2200 dropped it down to $2000.
My sister has a large studio in kaneohe that usually has multiple applicants, but last month there was only 1.
My friend in wahiawa was looking for roommates and no calls either.
What do you think is happening with our market? What happen to all the renters?
Our unit in Wahiawa (1bed) rented in a few days, but we only had 5 applicants. We usually have 10+. We had it listed at $950, which is definitely at the bottom of the range for the area. The reasoning for the low rent is for another day. :)
We have a client who just listed (August) a single family home for $2580 in Mililani Town (3bed/2 bath/garage). Had a few applicants and filled the vacancy in about a week. At the time, the rent was in the 75th percentile of all listings. Not sure where rents are now.
$2200 seems like a reasonable price for Mililani Town (except for maybe Nob Hill, which might be a little lower). I'll be shocked if you don't get someone soon at $2000.
I just took a quick look and saw two posts with "Price Reduced" and First Month Free", within the first 10 or so postings. It's been a while since I've seen those. Interesting.
Well, I am still optimistic on Oahu. Investors will just have to be (or have someone who is) smart and conservative in their number crunching. The market over the past few years has been very forgiving towards those whose analysis may have been less than perfect. It may be time to tighten up the due diligence on new acquisitions and portfolio management, as the market might be more punishing in the years to come. It's always good to practice sound investment strategies, but in the current cycle it's been tempting to be a little riskier and bite off a little more.
I believe you are correct. New troops (arriving in Hawaii after Jan 2017) have a lower BAH than those who were already here (current troops BAH remained unchanged). I don't know how many troops that is, but long story short, I'd imagine it's about 10k troops. A $250 drop in BAH for 10k troops could have a noticeable affect. If the current BAH remains at this new level, then in about 3 years all Hawaii troops will be at this reduced amount. But I guess we'll see in January when the new BAH allotments are announced.
Overall, I am not too concerned. We'll have to give it another 6 months or so to see a trend. It's hard to identify causality after just a few months. But it definitely seems to be island-wide and it definitely seems to have started around March. Hopefully other Hawaii investors will chime in as the year goes on.
On the bright side, the people of Hawaii (renters) are getting a chance to catch their breath financially.
Is anyone getting cashflow or not bleeding money? If your rent to value ratio is below 0.9% I would stay you are gambling on appreciation and only competing with foreign investors looking to launder money and investors with much bigger pockets only looking for capital preservation at less than 5% a year.
Is anyone getting cashflow or not bleeding money? If your rent to value ratio is below 0.9% I would stay you are gambling on appreciation and only competing with foreign investors looking to launder money and investors with much bigger pockets only looking for capital preservation at less than 5% a year.
Tell that to everyone investing in San Francisco, LA, SD, and San Jose.. where there has been a less than 0.9% rent to value for the better part of decades. By the way, these just happen to be the most profitable markets for rentals in the U.S. over the last 20 years :)
Lane Kawaoka Isi Nau based on your experiences, would you advise a new investor to invest on Oahu? I'm looking into house hacking a four plex in town. Mahalo in advance!
Hey @Aaron Cayabyab. I would absolutely recommend house hacking on Oahu. It is one of the best ways to break into the market. If you could do a four-plex, even better. The one downfall is you'd then be a Townie. Hahaha. Just kidding.
Our office is in Mililani if you ever want to talk story. Bouncing ideas around in person seems to be the most productive. Emails and texts kill the flow.
Is anyone getting cashflow or not bleeding money? If your rent to value ratio is below 0.9% I would stay you are gambling on appreciation and only competing with foreign investors looking to launder money and investors with much bigger pockets only looking for capital preservation at less than 5% a year.
Tell that to everyone investing in San Francisco, LA, SD, and San Jose.. where there has been a less than 0.9% rent to value for the better part of decades. By the way, these just happen to be the most profitable markets for rentals in the U.S. over the last 20 years
Can you explain what you mean? A rental nowadays is in the 0.5% area and that barely makes a mortgage payment before other expenses. I have cash flow in San Jose on a property but it was purchased almost 15 years ago.
Is anyone getting cashflow or not bleeding money? If your rent to value ratio is below 0.9% I would stay you are gambling on appreciation and only competing with foreign investors looking to launder money and investors with much bigger pockets only looking for capital preservation at less than 5% a year.
Tell that to everyone investing in San Francisco, LA, SD, and San Jose.. where there has been a less than 0.9% rent to value for the better part of decades. By the way, these just happen to be the most profitable markets for rentals in the U.S. over the last 20 years
Can you explain what you mean? A rental nowadays is in the 0.5% area and that barely makes a mortgage payment before other expenses. I have cash flow in San Jose on a property but it was purchased almost 15 years ago.
Maybe I misunderstood.
You are correct. Coastal markets may not have much initial cash flow on paper, but quickly they generate tremendous cash flow due to rent growth.
@Aaron Cayabyab If you are unwilling to go out of state for whatever reason then house hacking is the best option in a bunch of ok options. Every situation is different. Let me know if you want to connect and maybe I can help. Sorry don't always make it back to these forums.
I've lived in Hawaii for my whole life and it seems like there has never been a better time to be a landlord (on Maui that is). The lack of rental inventory allows it to be a "landlords market" in almost every sense of the phrase. I don't think it will be changing anytime soon.
The rental market here continues to remain strong due to serious lack of inventory, and at this time of year competition from visitors to secure rentals.
That said, December is a horrible month to try and rent anything due to the distraction of the holidays.