Many people come to Maui and think it will be really easy to make money on vacation rental properties. Yes you can make money but it is usually not what you expect. If you think, “I’m spending $200/night that could be going in my pocket”, think through things realistically. Each property is different. I’m sitting at a beautiful open house in Wailea and worked out the numbers as I estimate them. This is not intended as a perfect evaluation but it is a pretty classic example. Here is my brochure.
This property is on sale at $749,000. It is the lowest priced beachfront condo property in Wailea. The unit is in very good but original condition. The 1 bedroom, 2 bath unit has 952 square feet and a large lanai. It has breathtaking ocean views from the lanai and looks out over landscaped gardens, pathways and rooftops to the beach. It is a short 3 minute walk to stunning Keawakapu beach. It is quiet and peaceful even though one of the pools is just steps away.
So what do the numbers say? History says that it rents 70-75% of the time for $240-260 a night. The management company used only charges 15% and I have to say the place is maintained very well. Many management companies charge 45-55%! The unit is very clean even though some updates would be nice. I put it in my analysis spreadsheet and found that assuming investor mortgage rates you would need to put 40% down to cashflow today. I factored in maintenance, insurance, cleaning, property management, incidentals and utilities.
If you love to vacation in Maui, this is a great time to invest. I was listening to a podcast the other day by the Real Estate Guys and they had a whole episode called “Profiting in Paradise: A Case Study in Lifestyle Investing”. Over the years, property values and rents will go up. People love vacationing in Hawaii and want to be in a nice place near the beach! Someday our tourist market will return and properties like this could get back to having 90% occupancy. With a 90% occupancy rate, you would have $1400/monthly cash flow. That doesn’t even factor in price increases that will happen! Not bad at all and you still get to use the unit whenever you want…if it’s not already rented!
We have great properties at almost every price point. There is no better time than now to invest for your future and helping you is why I got into this business!
If you are interested in this property, don’t wait too long. It won’t last at this price.