Quote from @Bryan Vukelich:
Hi @Eric Buss - congrats to having a successful investment property on the Big Island. Curious if you want to share, what are some lessons you learned on your first investment property? And what part of the island is it located? Been easy to find tenants?
Regarding learn more about taxes - I recommend you find a CPA who has experience working with real estate investors. But BP is also a great resource. I'm confident that if you ask specifically what you are looking to learn about taxes, some members will provide you valuable advice.
Wish you well with your real estate investing.
Hi Bryan, I'm in Waimea. There aren't any apartments here, so most studio or 1B/1B units are ohanas (in-law units). Pre-pandemic it was very easy to find tenants. Beginning of pandemic, there were far fewer people looking to move. About 7-8 months later, with the increased number of people working remotely, people started flocking here (mentality being "I can work anywhere I want, of course I want to move to Hawaii"). Real estate values have gone up, as have rental prices, and the number of applicants has skyrocketed.
Lessons learned so far- 1) Tenant screening--learn how to do your due diligence. I made some mistakes. 2) It's not worth it to drop prices when a unit isn't occupied as soon as you'd like. I missed out on a month and a half of rent with a unit unoccupied, and figured it was worth it to lower the asking price to get it filled. The difference of $100 dollars can bring in a lower caliber of applicants. Some of the headaches down the line were not worth getting the unit occupied a month or two earlier than if I had waited. 3) Consider getting a property manager as a newbie rental owner. I learned I don't like being a landlord and I'm not very good at being a hard ***. Before purchasing, I was living in an in-law unit on a beautiful property. The landlord and I had an awesome relationship--we chatted daily, did woodworking projects in the garage together, I was occasionally invited to have dinner with him and his wife, and we still stay in touch. I figured that I could do the same, but have again made mistakes. I've had people that I really got along with, were moving out voluntarily for jobs or relationships, and said that absolutely loved living here. Others have regularly been late on payments, have needed reminders of the rules in the lease, and have been asked to leave. Eventually, I hired a property manager. Their experience has alleviated the issues I had with the other lessons learned, and has been worth every penny.
Thank you for the advice. Fortunately, there are a lot of homeowners with similar setups (house with ohana). Finding a local tax professional familiar with that situation shouldn't be too difficult, but I will definitely look outside my geographical area as well. Much appreciated.
