Ask LeAnn & Anna is a Realtor advice column providing two generations’ perspective, insight, and experience. Questions come from clients and friends. Feel to email us any of those burning, real-estate questions you might have!
In Article 3 of Ask LeAnn & Anna, Jason asks:
Hawai’i is such a popular destination, and I love spending time there. Should I purchase an investment property in Hawai’i?
Hi Jason, first, ask yourself what kind of investment property do you have in mind? Are you considering a second home that you will keep for yourself to hopefully build equity? Or, are you interested in a property that you can rent out to hopefully earn some rental income?
If you are considering a second home that you hope will build you equity, it is important to consider the current status of the real estate market in Hawai’i. The market is always changing and while Realtors have no crystal ball, we are aware of the latest trends in the market and this can significantly impact your decision. It will be important for us to discuss the types of properties that make good investments in terms of long-term desirability by Buyers, the potential future economic impact from the environment and how different locations throughout the islands can impact the type of property that you purchase, just to name a few. Investing in real estate can be an incredible way to build equity, especially here in Hawai’i where historically, we have some of the highest percentages of foreign buyers when compared to other States throughout the country. If you are interested in these statistics, check out this report from Title Guaranty Hawai’i which provides insight into the number and type of Buyers in Hawai’i in 2021.
If you are considering a property that you can rent out to hopefully earn some rental income, it will be incredibly important for you to consider the impact of the newly-approved Bill 41, relating to transient accommodations. On Oahu, the passing of this Bill is significantly impacting the transient vacation rental market. In summary, short-term rentals are now limited to a 90-day minimum rental term. This excludes properties with NUC (non-conforming use certificates allowing short-term renting) or properties located within Resort-Zoned areas such as Waikiki and Ko Olina. Therefore, it will be crucial that we talk about the type of rental property in which you are interested and where (at least on Oahu) you can find properties that will work for you.
All in all, there are many different types of investment properties in Hawai’i and we are here to help you with your search!
A Hui Hou, LeAnn & Anna
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