Investors

I. Long Term Rentals

II. Vacation Rentals

III. Land Banks

IV. Multi-Family Properties

V. Commercial Property

Investing in real estate may be one of the smartest investments a person can make.  Real estate should be a part of any serious investor's portfolio.  I was once told that if you bought a small house every time you added a child to your family, you would be able to sell that house when the child was ready and pay for their college education.  If you're not familiar with the North Kona area, click here for a map of subdivisions or click here for a map of condo locations.

It is difficult to break even with a Single Family Residence (SFR) in Hawaii as a Long Term Rental due to the high cost of the initial purchase.  With long term property an investor is looking for long term appreciation.  It is generally recommended that a real estate investor be able to hold onto their investment for 5 to 7 years before considering resale and never being in a position where they have to sell.

Long term appreciation along with certain tax considerations and being able to write off trips to Hawaii may make long term purchases worth while to some.  Others want a quicker return and look to vacation rentals.

The right Vacation Rental can be a good source of money and a positive in your portfolio.  There's a lot that goes into a successful vacation rental property beyond buying a condo and putting it in a rental program managed by a professional management company.

First, make sure you have the right zoning for a vacation rental so no one can come along and shut down the operation about the time you get it running properly.  Insure that the complex you buy into or the subdivision, is suitable for vacation rentals i.e., does it have the location and amenities that will draw people on vacation?

The interior of the property is critically important.  People come to Hawaii to luxuriate in the island experience, particularly the Hawaiian Island experience.  Having the right ambience makes all the difference in the world and will build return visitors so that eventually, you're booked year around without doing any advertising.

There is much you can do to augment what a property manager does.  Because of this, choosing the right manager is also a critical step.  You need to interview a few of them since there is no standard among managers.  There are certain questions you want to be sure to ask and there are some items that can be negotiated, also.  You can bet the property manager is going to get paid regardless of how well the property does so it's in your best interest to take the time and vet property managers.

There are some investors who Land Bank property.  This involves purchasing raw land that is deemed under valued and holding it.  Fees and taxes are a concern with raw land since it is in one of the highest tax brackets.  There are ways of reducing that tax liability that we can talk about if you're looking for such an investment.  Land banking large parcels can be especially lucrative if the price is right and you are able to sell to a developer at a later date.  Other people may hold onto land for their own future plans, maybe that dream house where they will spend the rest of their lives or a property to pass on to children or grandchildren that they may have otherwise, never considered.

Multi-Family Properties are another form of real estate investment that some people consider rather than single family homes or condos.  In West Hawaii, North Kona and South Kohala, there aren't many apartment houses or the like to be purchased although there are some.  Many of the multi-family properties here are duplexes or four plexes.  Owning a four plex has distinct advantages over the larger complexes since many federal laws regarding accessability don't apply to the smaller units.

Multi-family provides a greater income stream for the same amount of land than single family arrangements.  Having the greater density, four families instead of one, may generate two to three times the income.  Of course, multi-family properties tend to cost more than single family but that's because the return on investment should be greater.

For any kind of real estate investing, check our financing page for more information and the names of lenders you can use.  If you have specific questions regarding investor properties in Hawaii, please fill out the contact form below and we can then provide you with the information you need.