– Aloha! My name is Eric West with
HawaiiRealEstate.org. If you're new to the channel, we're all about teaching you
everything you need to know about Hawaii real estate, but you just won't find it in the listing. (upbeat tones) Aloha. Today I'm gonna tell you
everything you really need to know about buying a condo in Hawaii. These are literally the top five things that'll make all the difference in making sure it's a wise investment and something that you're happy with for many years to come.
Okay, number one. Make sure that the unit has
a partial or full ocean view; one of the two. When people come to
rent a condo in Hawaii, that's probably their number one thing; does it have an ocean view? Number two. Make sure that the unit is fee simple. Now, if you do buy a leasehold, the only ones I recommend are the ones that have there
fee simples in that complex. In other words, part of it has already
phased in to fee simple, or it has an expiration date that's super way out in the future, or the leasehold fee is very, very low. But I do not recommend buying a leasehold in a 100% leasehold property, where the fees are gonna go up, or there's a contract
renegotiation about to happen. Number three. Look at the financials and historical performance of that unit. That's your number one indicator of how it's gonna do in the future. Now it goes without saying the complex needs to allow
short term vacation rentals. And when you get those financial, look at the gross vacation rental income for the entire year, figure out what they're getting per night, and then come up with
an average occupancy of, say, 80%.
Then apply that to all of the other units that you're looking at. In other words, some units will perform better, but the owners are staying
in there for many nights. Or, some units will perform better if the management company
had a higher occupancy level. So the best way to get everything
on an even playing field is just to come up with, okay, here is the average amount that it is renting per night, and then assume that
everything is gonna rent for at least 80% occupancy. Also, level out the management fee. Say, okay, it's gonna
be a 30% management fee across the board.
And so that way you can kinda get a feel for what all the units will produce, given these assumptions, and take out some of the variables. 'Cause here's what's gonna happen. You're gonna get these financials
from all different people, and it's just gonna be a hodge podge and be very difficult to figure out exactly what kind of
revenue you can expect to really compare these units. So, if you need help with that, I've got a spreadsheet that I've created that really takes out all those variables, and really boils it down to the expenses.
And the expenses are very simple. You're HOA dues, your
taxes, and your utilities. That's really all that there is. Because the cleaning fees and the transit accommodation tax, and the general excise tax are passed through right to the client. Okay, number four is ocean access. Ocean access is huge. Now, the best case scenario, of course, is that it's beachfront.
But if it's not beachfront, at least having a rock
wall and a rocky shoreline, but having some kind of
access into the ocean, guests really like that. And of course, worst case scenario is
you're not on the ocean, but you're at least a very
short walk to an ocean that's accessible. But the best case scenario is
beachfront that's accessible, and a good swimming beach, in other words it's not all coral, it actually has good areas
where people can swim, that really brings in the numbers. And one final bonus tip
for you condo buyers. If you have the opportunity to stay in the complex that
you're considering purchasing, that is highly recommended. And read every review that
was ever posted on Yelp, or VRBO, or Airbnb. This will give you a lot of insight into what's going on in the complex. And I even tell people, "Hey, reach out to other
people that are staying there, "other owners, "and really get that inside scoop "before you make a final
purchase decision." Because, you know, the
devil's in the details, and you don't wanna find
out some of these things after you close.
It's better to go into
it with eyes wide open. And my final tip, number five, is make sure you buy it right. And what that means is, you have to take a really hard look at all the comparable
sales that have happened within the last year. Once you get all those comparable sales, create yourself a little spreadsheet and come up with a price per square foot that each unit has sold
for in the last 12 months. And then make adjustments for, was the unit upgraded, was
it marginally upgraded, or was it in original condition? Was there a view, partial
view, or garden view? And those adjustments, obviously, can make a big difference
in what you're purchasing. So, you have to be careful. If it looks like a good deal, it might just be that the last
unit sold had an ocean view and your doesn't, and you're thinking you're
getting a great view, and in that reality that garden view should sell for a lot less.
But looking at those comps and buying the unit at
the best price possible is absolutely critical to
your return down the road. And if you need any help with that, obviously hit me in the
comments or send me an email, I'd love to show you the
best way to pull those comps, and to make sure you're
working with the right data, and that you analyze it correctly as well. If this has been helpful, hit the like button, subscribe, and I'd love to hear your comments and see what kind of suggestions you have in terms of what helped
you find the right condo, and any kinda trouble that
you ran into in the process that you'd like to share with other people so they can learn from your adventures. Aloha. Funny thing is, a lot of people
think I sell real estate, and you know what? I just love sharing the most
amazing, beautiful lifestyle in the world.
(waves crashing).
Sell your Home for a $5000 flat Fee Full service Soldier to Soldier
