In this installment of our series, I offer some miscellaneous thoughts for your consideration:
- Many second-home buyers think that a vacation rental unit is the best way to go because they can make lots of income on nightly or weekly rents. The reality in the numbers is that it is often more cost effective and convenient to own a lower priced property and be able to call it yours.
- If you are moving to Hawaii to live, you should know that many people who move here only stay a year or two. It may be best to rent before you buy, or get into a lease option where you can buy if you decide to stay, or decline to buy if you decide to leave.
- If you are an investor looking for cashflow, Maui may not be the best place to look. Appreciation has been pretty good but based on typical properties, you need to put 40-50% down to have a chance of cashflow, which makes for a less than ideal cash-on-cash return. There are ways to cashflow but most opportunities are in residential properties with multiple rental units which are often non-conforming.
- Everyone wants a great ocean view! For a mid-range condo in Maui, you pay an average of $50K more for a limited ocean view, and panoramic views can be much higher. Properties with views often have higher occupancy rates and higher income and appreciation. But buyer beware! Make sure that view won’t be obstructed by growing trees or new construction. Many people prefer a quiet tropical garden setting that is near a beach!