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.
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.
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.
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.