Anyone who visits Hawaii walks away with vivid memories of its stunning beauty and leisurely relaxed lifestyle. Many people become repeat visitors to enjoy Hawaii’s diverse landscape and embrace its Aloha culture.
Perhaps you have thought of owning a place of your own in Hawaii - if so, you are not alone. By owning your vacation rental, you can visit any time, for any length of stay, from weeks to months and earn rental income the rest of the time. Owning real estate in Hawaii could be a way to enjoy the islands on your terms, whenever you like, and a sound financial investment.
That is where our journey to Hawaii started. KONA HOUSE OF PALMS was born in February 2018 and in less than 4 years, it is a very successful vacation rental with over 100 “5 star” reviews in less than 4 years on VRBO and Airbnb.
Through the process of buying two homes in Hawaii and establishing a successful vacation rental business, Anjali has developed a strong knowledge base about the Hawaii Real Estate market. She is ready to connect with you to make your dreams a reality.
While comparing many other vacation destinations, we found that the return on investment in Hawaii was consistently higher than some other destinations due to year-round tourism. The sun and the blue waters beckon twelve months a year. Also, visitors tend to spend a longer time per trip to Hawaii as there is so much to do and explore. An average stay at our vacation rental in Hawaii is seven days and growing. With the pandemic, many people can work from anywhere and can extend their vacations into work/playtime.
While beautiful vacation destinations exist in foreign countries, buying an investment property in other countries exposes buyers to uncertain and unfamiliar legal and political issues. We considered places like Mexico and Costa Rica, but as US citizens, the safety and familiarity of the US legal system made Hawaii real estate much more appealing. Also, the stability of a rental income in a financially stable US economy as compared to a foreign country seemed less complicated as well as much safer.
Buying a property in the US also allowed us to take advantage of the low-interest rates by being able to finance a portion of the purchase price while that would not be possible in most foreign countries. Being able to leverage the borrowed funds and write off the mortgage interest against the rental income is a huge advantage of owning a rental property. I highly advise talking to your tax advisor about the exact benefits of owning an investment property.
With the remote work culture and tourism in Hawaii, the demand for homes in Hawaii is likely to grow, but the supply is limited. Large portions of land in the Islands is designated for agriculture or protected for conservation and is therefore not available for real estate development. With limited supply and growing demand, the property value appreciation in Hawaii seems to be consistent.
In addition to these specific reasons for buying Hawaii real estate, the advantages of investing in real estate anywhere also apply. This may include tax deductions if you rent out your Hawaii property to generate income. You may be able to deduct mortgage interest, maintenance costs, property taxes, insurance, and depreciation. As always, I would advise you to talk to your tax advisor on the benefits of owning an income-producing property and if it is right for you.
If you are intrigued about investing in a vacation rental in Hawaii, it is really important to understand the laws and the local regulations that vary by the island. Due to the high demand of vacation rentals certain laws are in place to ensure that they are done legally and professionally. Here are some helpful links for each of the islands.
Hawaii | Maui | Oahu | Kauai
Having done it myself and helped other clients and friends start their own journeys, I have learned a lot about investing in Hawaii. If you are curious, let’s connect and I might be able to share my knowledge to help you start your journey.
Curious? Let's connect and I'll share my experience and expertise to help you start your journey.
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