Kaanapali Maui, Hawaii VRBO pros & cons

[Blake Capson]

Iv'e been in real estate for 15 years in Utah and have seen the ups and downs over that time. I have a group of investors looking to buy a 3 bed, 3 bath condo, ocean view in Kaanapali but I am concerned at the ability to properly do a VRBO style rental business long distance. Also seeing what the local SLC market is doing right now I am concerned how hot the Maui, Hawaii market is right now knowing they can rise and fall a bit more dramatically and if this is closer to the peak of their pricing.

In addition to this as a general questions what are some things to look out for when buying into a condo HOA in Maui that may be different than in other parts of the country?

[Mike Neubauer]

Aloha @Blake Capson!

Iʻve been on Maui for 16 years and know the island pretty well. The VRBO market on Maui is insanely good, but not always great for out of state investors. The toll of property management on places like this tends to drive most serious out of state investors away. We tend to see an average of about 35-50% being taken just from management fees. With numbers like that, even though the market is great it is not hard to find similar ROI on properties in your local area.

I do have a good friend who is an excellent realtor and property manager whose company only charges 25% and they kill it. Theyʻre the lowest price Iʻm aware of on this island. 

Some other things to be aware of, especially on the West side of the island (Kaʻanapali), is to make sure the unit is in a fee simple complex. Many condos over there are leasehold, meaning you only own the condo for so many years. Stay away from those, in my opinion. 

Market-wise, we have very low inventory and investors are buying up good properties quickly. No one knows if this is top of the market or not, but if you look at pre-2007 numbers, most of our places are not even at those numbers yet. Most of my friends in the industry here think we still have a few years to go, but that said, who knows. 

Iʻm happy to put you in touch with a great resource for you and the buddy I mentioned earlier. Just DM me and Iʻll give you his information.  Good luck Blake!  

Aloha