We are often asked about the feasibility of buying property on Oahu that owners can use themselves when they visit.  These properties can be broadly separated into four categories that are described in the tabs below.  Certain types of properties and locations are more suitable for the different categories discussed.  Please call us if you would like to discuss your goals so that we can design a game plan that fits your needs.

There are hundreds of owners on our newsletter mailing list and monthly e-mail newsletter that alternate between living in Hawaii part of the year and someplace else the remainder of the year. The main advantage of keeping a property vacant when you are not living in it is the lack of wear and tear by tenants. The owner can install higher end fixtures and furnishings and not worry about how those items are being cared for by others. The main disadvantage of keeping a property vacant is that you don’t receive any rental income to help offset the cost of ownership.

Seriously consider buying a condo or townhouse unless you are planning to hire a caretaker or manager. Larger condo and townhouse complexes have resident managers and many also hire security to discourage criminal activity. Well run associations also maintain the exterior of the buildings and grounds in a cost effective manner. Additionally, you can enjoy spreading the cost of having access to and maintaining luxury amenities that would normally be cost prohibitive in a single-family home.

By purchasing a condo, particularly in a high-rise complex, you can simply throw away perishable food, clean, close up the unit, and lock the door when returning home. On most occasions, you will only have to do some light cleaning when you return. Many people that own houses has second homes spend a lot of their “vacation time” on required maintenance and yard work.

Stott Property Management helps several clients that live in their second home for the same time every year (typically three to six months) and then rent it out when they return home. The main advantage of this strategy is that it provides some rental income to help offset the cost of ownership. The main disadvantages are that the furnishings will experience additional wear and tear and due to the risk of renting to an uncooperative tenant.

Vacation rentals are rental properties used by tourists as an alternative to staying in a hotel. Vacation rentals are currently very controversial on Oahu and there are only a few neighborhoods that allow vacation rentals (Waikiki, Ko Olina, & Turtle Bay are the best known). There are a few houses in residential neighborhoods that maintain have and maintain a Bed and Breakfast (B & B) license, and it is currently impossible to get a new license.

Vacation Rentals typically generate much higher rents on a daily basis since many tourists are willing to splurge on a Hawaii vacation. The higher daily rent is offset by higher vacancy rates, higher management fees (or invested time if you are managing yourself), higher maintenance costs, higher advertising costs, and higher taxes. Additionally, there is significant regulatory risk involved should an owner decide to rent a property for less than one month in a neighborhood or condo complex that does not allow vacation rentals.

The main advantage of a vacation rental versus renting long term is that it provides an owner additional flexibility. An owner can come multiple times per year and still generate some income to help offset the cost of ownership.

Hotel Pool condos are very common in Waikiki. The owners can come and live in their units multiple times per year and then have the hotel manager rent it out to tourists the remainder of the time.

The main advantage of Hotel Pools is the convenience provided by hiring an on-site staff to manage your unit. This convenience comes at a high cost. Many hotel pool managers take 50% of the revenue off the top and some have minimum fees that further reduce an owner’s revenue when the economy sours and tourism suffers. We recommend carefully reading the “hotel pool management” contract before purchasing a hotel pool condo.

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