Buying an Oahu Condo for visits and rental?

[Hobart]

My aunt is a real estate agent on the mainland and she suggested that maybe I could purchase a condo on Oahu to stay in every once in the while over the next few years before I move there and purchase a home. That way I can make sure that I like it there and have a place to stay. When I am not there I can rent it out to vacationers on a weekly or daily basis. When I am ready to move there in 3-5 years from now, I can sell it for a small profit or at least break even or even keep it if the cash flow is positive.

My question is, are there places on Oahu where tourists or other visitors might actually rent my apartment often enough that it might just break even with the mortgage? I don't mind if I have to pay more or decorate more beautifully to help ensure success. I also don't care where on the island that it is located, i.e., if the tourist prefer remote isolated beaches as opposed to downtown Honolulu, or if it is more easy to rent out a downtown condo, then I would do that.

My budget is not that high, maybe only between $350,000 to US$500,000. That might rule out some of the really nice new places. I forgot to mention that I don't care how small it is, but it must have two bedrooms, one for my kids and one for my wife and I. The budget doesn't include the interior decoration, I can have a separate budget for improvements to the property.

Any ideas and help would be appreciated, mostly I just worry that most tourists either stay in hotels and/or only visit other islands?

[Queenolu]

With that type of funding you should have no problem finding a condo to bye in Oahu. You should find a management property company to assist you with managing the condo locally and take care of all rental and management.

I don't live in Hawai'i but I will say that anything close to the beaches or town will be a good area for rental. Visit this site, http://www.cbpacific.com

I am sure more locals will come in once everything is getting back to normal to answer your question.

Good luck!

[Hobart]

Thanks for your post Queenolu. I am most concerned with picking the right condo that tourists and/or locals alike will want to rent on a weekly basis. I checked some real estate websites and looks like some buildings around the island on the ocean can be found for that price, I just want to be sure that some tourists or someone else will stay there if it is nice etc., or when tourists come to Oahu they either rent a villa on the beach or stay in a hotel. None go for oceanfront 2 BR condos.

[WindwardOahuRN]

I don't live in Hawai'i but I will say that anything close to the beaches or town will be a good area for rental.


Not necessarily. You just can't buy something here and think you're going to rent it out as a vacation rental when you're not here. Vacation rentals are supposed to be properly licensed.

This has become an enormous problem in Kailua, Lanikai, Waimanalo, and parts of the North Shore. Neighbor islands have been impacted too. Many of these illegal rentals are owned by mainland investors who have bought multiple properties expressly for use as vacation rentals. Since the laws were so seldom enforced in the past they had pretty clear sailing. Not so easy anymore. People are getting fed up with having residential areas turned into transient resorts.

On Oahu the law is finally beginning to be enforced:

http://starbulletin.com/2006/06/16/news/story05.html

http://starbulletin.com/2006/08/31/news/story05.html

No vacation rental permits have been granted since the 1980's on Oahu and it is very unlikely that this will change.

So no, "anything close to the beaches" is not necessarily a "good area for a rental."

[Hobart]

Not necessarily. You just can't buy something here and think you're going to rent it out as a vacation rental when you're not here. Vacation rentals are supposed to be properly licensed.
I bet that this also has something to do with the big hotels wanting to keep occupancy rates high. Wow, that sucks. Thanks for the heads up.

[sinjin]

I bet that this also has something to do with the big hotels wanting to keep occupancy rates high. Wow, that sucks. Thanks for the heads up.Actually it has more to do with not diminishing the quality of life for full time residents.

[WindwardOahuRN]

I bet that this also has something to do with the big hotels wanting to keep occupancy rates high. Wow, that sucks. Thanks for the heads up.


The "oh it's a ploy by the big hotels to keep up occupancy" is a rallying cry of the illegal rental owners. So is the "gee, this is just a mom-and-pop business that allows the poor and elderly to be able to keep their homes by renting out a little room to travellers." Yeah, right.

http://www.usatoday.com/travel/hotels/2006-05-15-hawaii-rentals_x.htm

And no, the fact that the laws that are already in place are being enforced does not "suck," except for those who have knowingly broken the law. Too bad.

[Hobart]

I guess I do need to think of it in terms of the neighbors. If I lived across the hall or next door, I wouldn't like it either. Its to bad for me because now I might not purchase this property, so I suppose it might not be that great for the real estate market. There must be loads of condos on the market now that were once tourist rentals. Going to glut the market and hurt other home owner values.

[Miulang]

I guess I do need to think of it in terms of the neighbors. If I lived across the hall or next door, I wouldn't like it either. Its to bad for me because now I might not purchase this property, so I suppose it might not be that great for the real estate market. There must be loads of condos on the market now that were once tourist rentals. Going to glut the market and hurt other home owner values.
Maui has a better market for condo investors. If you buy a condo at one of the timeshare places in Kihei, you can rent it out, no problem. On Maui where you would run into the neighbor issue is if you bought a standalone house and turned it into a B&B or something like that. Then you'd have to get a permit. But even Maui County is trying to add surcharges to any non-owner occupied dwellings because of the lack of affordable housing for the people who live there full time.

Miulang

[WindwardOahuRN]

I guess I do need to think of it in terms of the neighbors. If I lived across the hall or next door, I wouldn't like it either. Its to bad for me because now I might not purchase this property, so I suppose it might not be that great for the real estate market. There must be loads of condos on the market now that were once tourist rentals. Going to glut the market and hurt other home owner values.

Certain areas are zoned for short-term rentals. Waikiki is one of them. Many buildings in the Waikiki area allow vacation rentals.

Where you get into trouble is in the residential-zoned areas of the islands.

And the RE market is pretty strong here. I doubt if the failure of one person to purchase a condo is going to come as a crushing blow. :D

A little website that explains in more detail, including how to check whether a property is legally allowed to be rented as a short-term vacation rental:

http://www.bnbcoalition.org/

If you want to purchase a property and rent it out on a short-term basis as a vacation rental just make sure that it is legally permitted to be rented as such.

Don't take a RE person's word for it, either. I've heard that RE people are telling potential buyers that it is just fine and dandy to rent their nice Kailua beachside property on a short-term basis when in fact the property is not a permitted short-term rental.

[LikaNui]

Its to bad for me because now I might not purchase this property Well, look at it this way: now you can go back to buying that airplane and yacht and helicopter that you talked about at this link (http://www.hawaiithreads.com/showpost.php?p=107000&postcount=1).
:rolleyes:

[pzarquon]

Its to bad for me because now I might not purchase this property, so I suppose it might not be that great for the real estate market.Well, maybe it's bad news if you were a realtor. Some could see it as good news that another vacation rental failed to materialize.

Why not buy and make it a legitimate rental unit? Demand is high there, too. You'd have to give tenants a lot of warning before coming over for your vacation, but I have a weird feeling you still won't have problems finding renters willing to live with short-term leases.There must be loads of condos on the market now that were once tourist rentals. Going to glut the market and hurt other home owner values.Much as everyone's hoping for the bubble to pop, apart from a bit of cooling, I don't expect home values to be "hurt," at least by folks selling off former illegal vacation rentals. Demand still far exceeds supply.

Have you considered a time share? :D

[Jonah K]

There must be loads of condos on the market now that were once tourist rentals. Going to glut the market and hurt other home owner values.
I wouldn't be surprised to see some earthquake-damaged condos in Kona and Waikoloa for sale in a few months. Might be able to pick up some good deals. :cool:

[Keanu]

My question is, are there places on Oahu where tourists or other visitors might actually rent my apartment often enough that it might just break even with the mortgage? I don't mind if I have to pay more or decorate more beautifully to help ensure success. I also don't care where on the island that it is located, i.e., if the tourist prefer remote isolated beaches as opposed to downtown Honolulu, or if it is more easy to rent out a downtown condo, then I would do that.Vacation rentals that are outside of the usual tourist areas (like Waikiki) are not welcomed by the majority of us who live here.

[MadAzza]

My question is, are there places on Oahu where tourists or other visitors might actually rent my apartment often enough that it might just break even with the mortgage? I don't mind if I have to pay more or decorate more beautifully to help ensure success.


With this post and your other fake query about buying helicopters and airplanes, which no intelligent person would ask about on an Internet discussion board, I have the sneaking feeling that you're completely full of crap.

But you are hooking a few, so please ... carry on.

[WindwardOahuRN]

With this post and your other fake query about buying helicopters and airplanes, which no intelligent person would ask about on an Internet discussion board, I have the sneaking feeling that you're completely full of crap.

But you are hooking a few, so please ... carry on.

Shhh....I am waiting for him to ask about buying a bridge to Maui. :D

[MadAzza]

Shhh....I am waiting for him to ask about buying a bridge to Maui. :D

Buying one? He probably has the know-how *and* the money to BUILD one!

Not bad, for a 14-year-old on his mommy's Dell.

[WindwardOahuRN]

Buying one? He probably has the know-how *and* the money to BUILD one!

Not bad, for a 14-year-old on his mommy's Dell.

I am thinking that he or she is a notorious member of the AOL message board bunch who has found a barely willing audience here.

She (he?) has probably been blocked by most of the AOL crowd and is desperately searching for an outlet for her "creativity."

I suggest that she go back to school and acquire a trade. Make her parents proud, for once.

[Hobart]

Buying one? He probably has the know-how *and* the money to BUILD one!

Not bad, for a 14-year-old on his mommy's Dell.

A little over the top no? What do you want to know? I am 37, I have a family, just because I have money and I openly post about purchasing a condo for rental, or about if I purchased a boat or plane is it feasible to island hop or make it to the mainland, that might make me clueless about Hawaii, but then that is what this board is for, helping clueless people like me. Forgive me, if I seem strange, I have been living abroad in Asia speaking Chinese everyday in Taiwan for the past 10 years and before that in Hong Kong and Thailand and China. I haven't lived back home in the USA for a long time. In Asia it is a matter of fact that some people have money and can purchase a yacht or a second home. Is that strange in Hawaii? Should I not post queries like this in this forum? No need to be abrasive.

[1stwahine]

I haven't lived back home in the USA for a long time. In Asia it is a matter of fact that some people have money and can purchase a yacht or a second home. Is that strange in Hawaii? Should I not post questions like this in this forum?

You're so FULL of KAKAS!:rolleyes:

I going back moemoe.

Auntie Lynn

[tikiyaki]

Thanks for your post Queenolu. I am most concerned with picking the right condo that tourists and/or locals alike will want to rent on a weekly basis. I checked some real estate websites and looks like some buildings around the island on the ocean can be found for that price, I just want to be sure that some tourists or someone else will stay there if it is nice etc., or when tourists come to Oahu they either rent a villa on the beach or stay in a hotel. None go for oceanfront 2 BR condos.

Who said that people don't rent 2 bd oceanfront condos ?

[Bard]

but then that is what this board is for, helping clueless people like me

Actually I think that's where this went wrong... you might try hawaii.com's forums for that kind of question.

(And I don't even mean that sarcastically :))

[Jonah K]

A little over the top no? What do you want to know? I am 37, I have a family, just because I have money and I openly post about purchasing a condo for rental, or about if I purchased a boat or plane is it feasible to island hop or make it to the mainland, that might make me clueless about Hawaii, but then that is what this board is for, helping clueless people like me. Forgive me, if I seem strange, I have been living abroad in Asia speaking Chinese everyday in Taiwan for the past 10 years and before that in Hong Kong and Thailand and China. I haven't lived back home in the USA for a long time. In Asia it is a matter of fact that some people have money and can purchase a yacht or a second home. Is that strange in Hawaii? Should I not post queries like this in this forum? No need to be abrasive.
In Hawai'i, we have plenty of clueless "nouveau riche" that purchase yachts, planes, and condos on a fairly regular basis; however, you probably won't find many of them posting here. :cool:

Here's a link that provides tips on purchasing a yacht....
http://www.hsyacht.com/howtobuy.shtml

Here's a link to a good local yacht brokerage (I recommend having them locate a Fairlane Squadron 74)....
http://www.hawaiiyachts.com/

Here's a link that provides some tips on purchasing a small airplane....
http://www.ebuyingguides.com/how/uplaneb_h.htm

Here's a link to a good small airplane dealer if you're into flying Cessna's (I recommend the Skylane T182T if you're a beginning to intermediate pilot)...
http://www.amghawaii.com/

For other aircraft, you might consider joining ADN....
http://www.aircraftdealers.net/

If you're interested in purchasing a condo on O'ahu to rent out, you might consider starting at this link...
http://www.oahucondoguide.com/

After purchasing some of these assets, I highly recommend placing them in a trust. ;)

Cheers,

Jonah K

[Hobart]

Jonah, thanks for the links! Not in the market for a plane or yacht right now, just planning for later and doing some research. The Oahu Condo Guide looks quite helpful.

WindwardOahu: Thanks also for your helpful information. That makes it a little easier if there are other options besides vacation permits and condotels. Cheers.

[808shooter]

Jonah, thanks for the links! Not in the market for a plane or yacht right now, just planning for later and doing some research. The Oahu Condo Guide looks quite helpful.

WindwardOahu: Thanks also for your helpful information. That makes it a little easier if there are other options besides vacation permits and condotels. Cheers.

Hobart, for the sake of amusement and for conversation, what industry were you in that allowed you the luxury of having such discretionary wealth? I for one am very curious about folks that have the moxy to start their own firms and make their mark in the world.

I must admit, I am a little skeptical of your story since it would be highly unlikely that someone so accomplished financially would have need of a message board for this kind of advice.

That being said, I do know a boat broker here locally who also is a very accomplished real estate investor/broker. If you're on the level, I'd happily refer you to him.

[warmeric]

Before you invest in a yacht in Hawaii, you should spend a lot of time educating yourself on the types of boats that are best for the unique conditions on Oahu. Try chartering a few local yachts, many of which are listed on http://www.yachtchartershawaii.com Hawaii yacht charters are different than other places in the world because of sailing conditions and you should definitely make sure you are prepared before you invest in your own.

[islandguy]

Thanks for your post Queenolu. I am most concerned with picking the right condo that tourists and/or locals alike will want to rent on a weekly basis. I checked some real estate websites and looks like some buildings around the island on the ocean can be found for that price, I just want to be sure that some tourists or someone else will stay there if it is nice etc., or when tourists come to Oahu they either rent a villa on the beach or stay in a hotel. None go for oceanfront 2 BR condos.


Why incurr DEBT that you do not need? Why add the burden or worrying about "renters" when you dont really NEED the place now? Who knows WHERE you will be in 3-5 years! Who knows WHAT state the USA will be in those years? Look at 911, less than 5 years ago, and the USA now in iraq! One person has already stated that a terrorist attack on oahu would CRIPPLE the island, as it only has a 2 week supply of food! Imagine what would happen if the island was "cut off" for some reason... I think people dont realize that HAWAII is the most GEOGRAPHICALLY isolated place on the planet! 2500 miles(by many estimates) away from the mainland...


Sorry, but I try to live SIMPLE, with as few worries as possible...are you sure this is a "good idea?" or is it something a family member (realtor!) is trying to talk you into?

[islandguy]

Well, look at it this way: now you can go back to buying that airplane and yacht and helicopter that you talked about at this link (http://www.hawaiithreads.com/showpost.php?p=107000&postcount=1).
:rolleyes:

Oh brother! Thanks for that link....

[tutusue]

Why incurr DEBT that you do not need? Why add the burden or worrying about "renters" when you dont really NEED the place now?[...]
For some people, like my daughter, there's one word for it...Investment. A condo in Hawaii (where she was raised and hopes to return) is part of her diversified investment portfolio. People buy real estate for investment reasons only all the time. All the worries you cited hold true for just about everything in life. Even stashing extra cash in a savings account or under the mattress isn't safe if there is a terrorist attack. Look what 9/11 did to the stock market. However, it rebounded. And, so did real estate!

Choosing a simple life with as few worries as possible is admirable and right for you. Others want more out of life. And, that's right for them. At my age I prefer your lifestyle. When I was my daughter's age I preferred her lifestyle. Diff'rent strokes for diff'rent folks...or the same folks at diff'rent stages in life! :D

The OP of this thread, OTOH, appears to...well...never mind! You saw the link! :rolleyes:

[LikaNui]

The OP of this thread, OTOH, appears to...well...never mind! You saw the link! :rolleyes: Yes, that Original Poster joined HT, trolled a few messages, then vanished in the beginning of November. Big surprise.

:rolleyes: