Want to retire in Hawaii? A 20 year plan;(updated) (real estate market, renters)

[KauaiPono]

Here is an update to my post of 2012:

Want to retire in Hawaii? A 20 year plan.

I wanted to give you all an update on my Kauai/Hawaii retirement plans:


When I last wrote the above thread on May 23, 2012, I had bought just one place on Kauai.


(First, let me reiterate that this plan is not for everyone, and as far as my career goes I am a professional who makes well into the 6 figures. I feel I have to say that because the following will only make sense if you understand how I am pulling this off):


In the last two years I have bought 3 other properties all of which are being rented out and I am making a profit on every single one. (Only one has a small mortgage)


I came into some money through hard work the last two years and decided I wanted more passive income; (just like my first Kauai rental property I bought). I figure I can buy about 3 to 5 more properties in the next 10 years and retire earlier than I thought, since my wife and I will live in one and collect the rents on the others.


I simply say this to all of you considering a move. If you want it; you have to start working towards it now.


It is like plating seeds in the garden, you must tend to them every day and eventually they will flourish.


If you want to live in Hawaii start doing the things you need to do every day to make it feasible and work for you. Stop dreaming.


(By the way my renters from my first unit have never left and it has been since 2011).

[davephan]

Thanks for your update! Your 20 year plan probably started a little earlier, educating yourself in a field that has a high probably to obtain a high income career.

We also live well below our means, living on a small fraction of our income, living debt free, saving a lot of money for retirement. We could afford to buy rental property, but haven't done it yet because of the hassles that can go along with being a landlord. I have two in-laws that are landlords, and we've thought about it, but haven't done so yet.

Do you have any advice you can offer to avoid problems renting properties?

[kauailover]

Originally Posted by davephan

Do you have any advice you can offer to avoid problems renting properties?

I'm sure the OP would agree having a reputable property manager that stays on top of things is No. 1 to keep things running smoothly.

Congrats to the OP for going after his dream full force!

[hotzcatz]

I don't know how many other folks are going to be able to start their retirement plan by buying a rental house on Kauai, let alone several more, but it's a great plan if you can get it to work. Although, there have also been folks who have lost everything by buying houses, so there needs to be some caution and education before jumping in, IMHO. Even if this isn't the best plan for many folks, the idea of just having a plan should be pretty universal.

[KauaiPono]

As required by Hawaii State Law I use a highly respected rental agency. I have not had any problems with renters (yet). I would be foolish to think that I won't, but rental properties are not easy to get and most renters know this and therefore are respectable and pay on time.

[hotzcatz]

It's not the mechanics of how to work the plan, it's the financial ability to start the whole plan that I see folks having difficulty with. Buying a rental house on Kauai, ain't chump change. It sounds like a good plan, but for most folks, won't they have to have a pre-plan in order to make enough to buy the first rental and start the actual plan?

[KauaiPono]

Yes Hotcatz that is true, I was not giving my example as an example for all. I am speaking directly to someone who is affluent; looking to retire in their golden years and want to start planning now.

By the way even if the real estate markets tank again, my properties are all paid off, except one which will be soon, so I am not worried. I do not need the rents to pay off mortgages.

The sad thing about Hawaii is that it is very hard to make a lot of money on the island(s). It is easier on the mainland. It is almost as though a person born on the island has to leave, go to college on the mainland and start a successful career on the mainland and make enough money just to get back. Sad but true.

[whtviper1]

Originally Posted by KauaiPono

The sad thing about Hawaii is that it is very hard to make a lot of money on the island(s). It is easier on the mainland. It is almost as though a person born on the island has to leave, go to college on the mainland and start a successful career on the mainland and make enough money just to get back. Sad but true.

Why is that sad? On Oahu, where most people live in Hawaii - it is essentially a 40 mile x 20 mile island. What is more sad is someone who doesn't get off the island and have some life experiences beyond these tiny islands.

Leaving and coming back seems very beneficial from my perspective.

[KauaiPono]

That is one way to look at it whtviper1

[kauailover]

KauaiPono,

I am curious about your investment strategies using Kauai real estate. Do you look for a certain % of return in rent according to a properties purchase price?

Most people do not have huge piles of cash laying around to pay cash for a rental property investment. Even with a 25% down payment most of the sfh I've seen on the mls wouldn't produce enough rent to be a wise investment taking into account upkeep and vacancies, taxes, insurance, prop. mngmt. etc etc.

I guess having a lot of cash to tie up for a long term return is great if that's your angle on this?

Thanks for sharing your plan here!