I have finally found a job that I truly enjoy doing everyday. Although real estate is a "sales" job, I don't feel like I need to sell people on anything. There are so many great Kauai real estate opportunities that you need to get in now! Emilie and I are making plans to invest sometime this year before the market turns around.
The best investment for a non-resident is to purchase a condo and rent it out long term, or as a vacation rental. Renting it will cover the mortgage plus give you some cash in your pocket. With the market being the lowest in history, you can enjoy inflation as the market turns around. Although this is all speculation, there has been many key indicators that we should be expecting to experience the start of the recovery in the next year.
BEST INVESTMENT ON KAUAI:
Kapaa Real Estate
Price: $148,559 Monthly Assn.: $279.00
Bedrooms (4) Bath (1.5) Yearly tax $948
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Hawaii is a world wide vacation hotspot and a highly desired place to live. The profit potential is much higher here then most other places around the world. With the demand for rental space being so high, you can expect to receive a premium for your condo. Long term and vacation rental rates tend to be much higher due to the public amenities like pools, hot tub, work out facilities, etc. However you will be paying association fees on top of your mortgage.
Purchasing a home and renting it is also a great way to take advantage of the distressed market. You will not have association fees, and you will have more freedom to remodel and add on. However you have less to offer in terms of amenities and you are also open to more risk and complications should something go wrong.
In general, like most investments, the higher the risk the higher the reward. Real Estate in Hawaii is no different. Condos tend to be much less expensive, in better locations for the price, but you will be paying association fees to have the privilege to live in such a good location with amenities. Homes are more expensive and more maintenance, but you will hold onto more money per month because you will not be paying those association fees.
Condos are great for those with limited funds who want to get into the market now. You still have a high probability of growing your wealth with limited risk. Homes are perfect for those who are able to keep up on maintenance and have more money upfront to put down on a home. The bonus for having a larger down payment is not having to pay $400-$1000/month in assessment fees.
When I mention to people that Condos in Poipu have association fees over $1000, their jaws drop. But the income potential is huge. It is not uncommon for these condos to bring in over $50,000/year from vacation rental income. Remember, location, location, location. It is especially important for vacation rentals.
Deciding on a condo or a home as an investment can be difficult. It is important to talk to a real estate agent to help decide what is best for you. I would recommend making a list of the five best deals on the market for condos and for homes separately. Do the math, and see what will bring you the highest return for your dollar, while keeping your stress and risk low.