Investing in Hawaii Buy and Hold for an OOS investor

[Shiv Jey]

Hello all!

I'm a buy and hold investor in various parts of the contiguous 48-states.  We vacation yearly in Hawaii and I'd like to get a property out there to help with some of the tax burden (still employed with a W-2).

I'm interested in investing anywhere in Hawaii that won't lose any money after mortgage payment and expenses. Does this exist in Hawaii? Normally I invest only if there's a safe 10% COC return but would accept less in Hawaii for the tax write-offs for vacationing yearly there. We can adjust our vacation to the island where the investment is in so I'm open to any island.

Thank you!

[Arla C. Meyer]

Hi, Shiv,

Like everywhere there are unique things to think about in Hawaii. I bought and renovated one duplex in Hilo, on the East side of the Big Island. It needed about 5 months' worth of work, but now it's cash-flowing. It took me a few years to find that property. Loads of termites, and single-wall construction.

So, there are properties to be found. On this island Hilo town is likely where you want to be...

South of here (Puna district) is just too full of colorful characters, not to mention lava potential.

Kona side of the Big Island is hard to cash-flow with long-term rentals because real estate is higher there.

One idea is to buy an existing airbnb property, and you can use it when you come on vacation.

The County of Hawaii has passed a law that disallows new short term rentals, but I'm pretty sure you can acquire one that's already up and running (as long as they've been paying their GE taxes).

Good luck,

Arla

[Kim F.]

Are you looking to rent out a property long-term or buy a vacation rental? Pretty big difference in where and what you'd buy. If you are interested in buying a vacation rental (i.e., on the Kona side of Hawaii) I could provide you some pointers and recommend a good realtor because the new vacation rental law is a game changer.

[Loren Clive]

Yes, you can find cash flowing vacation rentals on Maui. Be prepared to put at least 20% down if getting a loan.

[Lane Kawaoka]

@Shiv Jey after living in WA for 14 years and now in Hawaii... don't buy here if you are looking for cashflow. Its worse than WA. I don't know how much you spend on vacation but I don't think its wise to spend money on a bad deal just to get some deductions.

[Duc Ong]

@Shiv Jey

If you are looking for cashflow on Oahu, there are 2 ways: short term rental and multi-unit.  Either would require a hefty down payment, but if you have the liquidity, it could work.  Of course, these are not that easy to find, and there are many obstacles to work through in order to get it to work.  It just depends on your criteria. Let me know if I can help!

[Luan Becerra]

There are some solid rental opportunites on Kauai. Specifically Princeville, Poipu, and Coconut Coast for Short Term Vacation Rentals. Plenty of my clients and friends are crushing it right now with several rentals.

Originally posted by @Shiv Jey:

Hello all!

I'm a buy and hold investor in various parts of the contiguous 48-states.  We vacation yearly in Hawaii and I'd like to get a property out there to help with some of the tax burden (still employed with a W-2).

I'm interested in investing anywhere in Hawaii that won't lose any money after mortgage payment and expenses. Does this exist in Hawaii? Normally I invest only if there's a safe 10% COC return but would accept less in Hawaii for the tax write-offs for vacationing yearly there. We can adjust our vacation to the island where the investment is in so I'm open to any island.

Thank you!

[Gopinath Chandra]

Has anyone heard or had experience investing with Kona Development Partners?

They are developing a huge lot on the west side of Main island off the Kona coast.

Wondering if the potential for this area is good in the 3 to 5 year time frame.