Hawaii’s property appreciation is one of the main reasons the Aloha state brings in many real estate investors, overseas and local. There is no shortage of tourists looking to rent a property, and long-term rental yields are some of the best in the U.S. For U.S. expats and Foreign Nationals looking to invest in Hawaii, buying an investment property on one of the major islands is generally a safe and very rewarding investment. Is it time to invest in your dream Hawaiian vacation home?
Last week, we compared real estate prices on the East Coast and their profitability. This week, we venture into The Aloha State and bring you property prices and average rental income between four popular investment areas in Hawaii – Oahu, Maui, Big Island, and Kauai.
Owning a piece of paradise is a dream for most people that visit Hawaii on holiday. Many real estate investors utilize their property in Hawaii as short-term vacation rentals. Although some locations on the islands may be restrictions on the minimum stay a property investor is allowed to advertise, there is surely never a lack of demand. Whether it’s February, July, or October, Hawaii sees vacationers at any season. It’s the perfect temperature, ample sunshine, and some of the best beaches in the world that play an important part in investors being able to rent out all year round. It’s the ultimate “home away from home.” Prefer a more stable long-term tenant? Not a problem. The rental prices in Hawaii are some of the highest in the nation giving fantastic yields with long-term, stable tenancies.
Oahu
According to data from the Honolulu Board of Realtors, Oahu median sales prices have constantly increased yearly since 1985. Oahu has an active and competitive real estate market with its low inventory, combined with its high demand, making it an ideal opportunity to consider investing in Oahu property. From here on, prices and demand are likely to only go one way – up!
| Location: Waikele, Oahu | ||
| Avg Purchase Price | USD 1,065,640 (2000 sqft) | USD 649,500 (830 sqft) |
| Avg Rental Income | USD 4,580 | USD 3,640 |
| Price Per Sqft | USD 530 | USD 900 |
| Location: Waikiki, Oahu | ||
| Avg Purchase Price | USD 2,640,000 (2000 sqft) | USD 432,500 (830 sqft) |
| Avg Rental Income | USD 15,280 | USD 4,755 |
| Price Per Sqft | USD 1,318 | USD 840 |
Maui
Among the 8 major islands in the Aloha State, Maui is perhaps the most famous place to visit. Due to its popularity for surfing, amazing restaurants, popular white-sand beaches, and wonderful landscapes, sightseers from around the globe just can’t get enough of Maui. According to the Hawaii Tourism Authority, millions of tourists worldwide travel to Maui every year, with a record number of 3,071,596 vacationers in 2019. These are not just the only people Maui attracts; Real estate investors find Maui’s rental yield, purchase price, and property appreciation extremely alluring.
| Location: Kihei, Maui | ||
| Avg Purchase Price | USD 2,532,040 (2000 sqft) | USD 772,000 (830 sqft) |
| Avg Rental Income | USD 12,425 | USD 6,995 |
| Price Per Sqft | USD 1,266 | USD 980 |
| Location: Wailea, Maui | ||
| Avg Purchase Price | USD 4,540,000 (2000 sqft) | USD 847,250 (830 sqft) |
| Avg Rental Income | USD 22,440 | USD 7,030 |
| Price Per Sqft | USD 2,270 | USD 3,450 |
Kauai
Based on WSJ, this Hawaiian island has become a major destination for primary and secondary homeowners during the coronavirus pandemic. Ranked 6th in the list of places to buy a seaside property, Kauai’s real estate demand is steady and sure. Because of Kauai’s laws, only one out of every odd property can be utilized as a vacation rental creating properties that can be used as a vacation rental significantly more valuable and highly sought after. Properties that can be classified as vacation rentals can be categorized as one of two categories:
1. They are situated in A VDA (Visitor Destination Area) like Princeville and Poipu
2. They have a TVR (excursion permit). The region of Kauai isn’t giving out vacation licenses, so a property either has one or it doesn’t.
| Location: Kauai | ||
| Avg Purchase Price | USD 1,060,800 (2000 sqft) | USD 444,750 (830 sqft) |
| Avg Rental Income | USD 9,525 | USD 3,410 |
| Price Per Sqft | USD 530 | USD 580 |
| Location: Princeville, Kauai | ||
| Avg Purchase Price | USD 1,765,980 (2000 sqft) | USD 873,250 (830 sqft) |
| Avg Rental Income | USD 10,560 | USD 4,558 |
| Price Per Sqft | USD 880 | USD 690 |
The Island of Hawaii (Big Island)
Hilo
Positioned as a property investment opportunity zone, the Hilo area is home to lavish wilderness, dazzling waterfalls, and vast green farmlands that continue into Kohala mountains. A fantastic scene of calderas, magma streams, and endemic Ohia trees can be viewed from the Hawaii Volcanoes National Park. Hilo’s location makes it ideal for investors to purchase an investment home and receive passive income.
| Location: Hilo, The Big Island | ||
| Avg Purchase Price | USD 611,550 (2000 sqft) | USD 453,250 (830 sqft) |
| Avg Rental Income | USD 4,000 | USD 3,650 |
| Price Per Sqft | USD 305 | USD 630 |
Kailua-Kona
Kailua-Kona Known for its reasonable real estate prices and amazing value appreciation, the Big Island of Hawaii is most certainly drawing investors from around the globe. Big Island is known for its elite luxury resorts attracting a lot of High-Net-Worth vacationers. Like Hilo, it is also ranked as an opportunity zone for real estate, making it a very profitable and tax-efficient investment.
| Location: Kailua-Kona, The Big Island | ||
| Avg Purchase Price | USD 1,119,210 (2000 sqft) | USD 698,000 (830 sqft) |
| Avg Rental Income | USD 5,016 | USD 3,957 |
| Price Per Sqft | USD 560 | USD 640 |
Whether it is to have a pure investment property or a second home to relax and get away from, Hawaii is an opportunity investment that many dream about, but few achieve. When you invest in Hawaii real estate, you get peace of mind knowing that it is one of the most stable real estate markets in the U.S. Sit back, relax, have a Mai Tai, and enjoy investing and earning passive income while the property appreciations roll in like the wave. Ready to find your place in paradise?
As a company, America Mortgages’ ONLY focus is providing market-rate mortgages financing for U.S. Expats and Foreign Nationals. 100% of our clients are clients just like you. Get in touch with us at America Mortgages to understand more about how a mortgage can get you that dream home in Hawaii. [email protected].