All Forum Posts by: Sayed Jaffar

Depending on your state or board, you may required to have a licensed broker acting as a broker-in-charge (bic) as part of your organization if you are managing, advertising or representing leasing or renting. This is something you want to confirm first.

Aloha,

I am doing Share Term Rental (STR) in Waikiki for the past few years. Waikiki is an exceptional place for STR, as the demand has been soaring for alternative housing over the past few years. Also, a big number of properties are added, almost on daily basis, to sites like Airbnb and VRBO, which are adding the number of available listings to an unprecendented level. I would like to suggest the following:

1. Legally, there are very few properties where you can do STR . Non Conforming Certificates, which the State had stopped issuing (nothing after1989) gave any owner a legal cover to perform daily rentals. Properties which come with this certificate, are hard to find and they are very expensive.
2. If you are plan on managing the STR yourself, and you are not spliting the revenue with a co-host, i think you can do fine. However, anything above 20% would put you close to the bracket of a long term rental for that property. In that case, what is the point of doing STR if you are not making the additional money.
3. Not every building in Waikiki allows daily rentals. You have to know the buildings which are friendly to STR as far building management is concern. Certain buildings require a minimum of 30 days or a minimum of 180 days as an example. So knowing the building is a must!
4. Daily rates on Airbnb, have come down in the past few months as more properties are added to the system. However, I still expect average occupancy rate of 80 - 90% is very much possible.
5. On average as an investor, I would expect to earn between 8 - 12% ROI, if you are doing everything right.

All the best!

I really hope I am wrong on this, but I think developer of the project (Castle & Cooke) has jacked up on the timing of this project. They should have started their ground work a while back while the housing market is still going strong. The upcoming headwinds in the form of increasing interest rates are not going to help them at all. They will take another 2 years to deliver the houses. If the days of "cheap" mortgage rates are over, as the stock market is indicating over the past 2 weeks, then buyers and sellers both will have some difficult decisions to make.

Kim, congratulations on buying your first [investment] property! 

Following are the points or considerations that I would have done before buying the property. You may have done this already, but I am going to put it anyway.

1. Get an estimate of average rate for a SFH and Condo using Airbnb and VRBO (for comparison purpose)
2. Get an estimated monthly expenses including fees that you would be paying to these platforms.
3. Get an approx. long term rental rate for the property, so you would know how much more you can get from STR, and is it worth it or not.
4. Once you have the above information, it would give you a pretty good idea on what type of property would bring what type of revenue and income.
5. In my opinion, both Airbnb and VRBO have their own separate market, as far guests are concern. There is a certain type of demographics which favors Airbnb and the other group which favors or prefers VRBO. Best way to find out is by visiting Airbnb & VRBO websites, and by talking to other STR operators in your area.

It is simply matter of time when Airbnb is going to eat VRBO's entire lunch. VRBO is not helping their cause by charging these ludicrous charges such as annual fees of $499, 8% of booking fees, 3% of credit card fees for US credit cards, and an additional 2% of credit card fees for non US credit cards etc. Airbnb is going to do the same to VRBO what Uber/Lyft has done to Taxi businesses.

Aloha Frank,

I have been doing STR/Airbnb in Honolulu for few years. As I was reading your post, it reminded me of myself when I was about to invest in my first STR property. I have only one point to share:

STR is a serious business, and it requires lot of your time. It may appear something very simple that anyone can do in their spare time, but it is a full time business. If you or your brother are not available to commit full time, at least one of them, I would suggest to talk to a Super Host, for Airbnb, or hire a operator who can do the work for you in exchange for a cut. The fact that you will be responsible for cleaning, doing laundry, stocking supplies and most important communicating with guests are some of the tasks for which you need time and serious plan.

Aloha,

I am currently doing STR in Waikiki, and overall Waikiki is a fantastic place to have a STR. I have like to share few items, as to me these can be challenges. You will find lots of good reasons to invest in Waikiki.

1. The number of STRs over the past 3 years have increased dramatically. It shows the demand for these properties, but it is also showing another trend, which in my opinion is a bit concerning. On Airbnb, because of the rise in these properties, the nightly rates have been under pressure, and in order to compete against other units, in the same building or area, operators are forced to lower prices.
2. State of Hawaii is in talks with Airbnb to collect taxes (approx 15%) and submit to state. I think this will further put pressure on prices, as I am sure not all operators are either collecting or paying these taxes.
3. There are very few buildings in Waikiki, where you can do a STR legally. You can pretty much count those buildings on finger tips. Outside those buildings, you can purchase and operate the STR business, but it would be just matter of time when either you will be told by your HOA or neighbors to stop.