Best Islands for Purchasing A Vacation Home
Investors may find value in their stocks and bonds, but these aren’t investment they can “enjoy” per se. That’s not the case with purchasing a Hawaiian vacation home, which you can use part of the year and rent out during the top tourist season. If you’re in the market for a vacation/rental property, explore each of the Hawaiian Islands before making your decision. Location, location, location is the real estate mantra, and much depends on proximity to beaches and other attractions.
On the Big Island, tourists tend to prefer smaller vacation rentals. Studio rentals have an average occupancy rate of 77 percent, with one-bedrooms averaging a 68 percent occupancy rate. A larger property may not have the highest occupancy rate, but that may not matter as far as cash flow goes as you will charge more for the larger rental. Of course, if you plan to use the home as your own vacation site, you’ll want a property that suits your needs. For a single person or a couple who want the most bang for their investment buck, a studio or one-bedroom is the way to go.
On Kauai, the most popular type of vacation rental is the studio apartment, with a 79 percent average occupancy rate. That’s compared to a one-bedroom average occupancy rate of 69 percent and a three-bedroom rate of 63 percent. Of course, if you plan to use the home as your own vacation site, you’ll want a property that suits your needs. For a single person or a couple who want the most bang for their investment buck, the studio is the way to go.
The demand for vacation homes on quiet, little Lanai is not as great as on the larger islands. Large rental homes near the two major resorts do well, but the smaller vacation properties in the countryside attract a different type of tourist. You love Lanai for its solitude and slow pace, and so do those who choose to vacation here instead of an island with more formal activities.
Vacation condo rentals are popular in Maui, but keep in mind that not all condo associations permit rentals. A Maui vacation rental benefits from the relatively long length of bookings, with an average of nine days in 2018.
Molokai’s small population is not the only reason it isn’t a favorite tourist destination. It beaches are lovely, but many lack facilities or have accessibility issues or aren’t safe for swimming or snorkeling. Vacation rental rates on Molokai are quite affordable, so while that’s good for vacationers, it won’t bring landlords a stellar ROI.
Oahu is the most expensive of the Hawaiian Islands, and while you’ll pay more for your vacation/rental property, you can expect to charge more for rent. In Honolulu, studios are the best investment, while those vacationing on the North Shore prefer larger rentals.
If you’re looking to buy or sell a home or find a vacation or rental property, you need a knowledgeable, experienced realtor familiar with all aspects of the Hawaiian real estate market. Contact Island Realty Group LLC at 808-689-7407 or IslandRealtyGroup@irghi.com.