U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Hawaii > Kauai
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 02-03-2016, 10:26 AM
 
Location: Toronto Canada
6 posts, read 7,651 times
Reputation: 12

Advertisements

Good morning,

In the next year I would like to purchase my retirement condo in Kauai. We have been to the island twice and have fallen in love with the beauty and lifestyle but still need to finish our careers before living in paradise full time.

We are Canadian so I'm aware that I require 30 percent down payment which will take some time to pull together depending on the cost of the unit. The idea is to buy the place I plan on living in half the year in 25 years and not purchasing solely for the rental income possibilities. That being said I would like to find a place that will cover the mortgage (or close to) while it is being paid off.

I have done extensive research but there is one question I can't figure out.... Which resorts have the best pay back potential given that I don't know specifically what each units rental income is or the HOA fees. With those two figures varying so dramatically it would be a make or break for my long term financial model.

What I'm looking for: quiet,beautiful, simple amenities, luxurious but with old character, 1 bedroom or small 2 bedroom, ocean view.

I believe that I would be most happy on the north shore in Princeville or beyond with a cost of 400 to 600k but I'm open to other locations.

I have looked at all the listings and like aspects of Pali Ke Kua, Paliuli or Hanalei Colony Resort.

Impossible, doable, best complex for what I'm looking for? Thoughts?

Thank you in advance
Reply With Quote Quick reply to this message

 
Old 02-03-2016, 01:01 PM
 
Location: Kailua
8,383 posts, read 10,300,063 times
Reputation: 3790
I don't see that working out to cover all your costs.

Let's take Plantation at Princeville. A $525,000 unit will rent for roughly $2,300/month.

All rough numbers - but figure mortgage with 30% down will be roughly $1,750/month.

Figure $500+ for monthly maintenance fees + property tax + GET tax on rent + if needed 10% of rent for a property mgmt company.

You'd likely be far better off taking that $150,000+ down payment and investing that in something else - and then buy when you retire. (And living in it 6 months and trying to rent it the other 6 months will be extremely difficult on a year over year basis at best).
Reply With Quote Quick reply to this message
 
Old 02-03-2016, 02:08 PM
 
Location: Toronto Canada
6 posts, read 7,651 times
Reputation: 12
Quote:
Originally Posted by whtviper1 View Post
I don't see that working out to cover all your costs.

Let's take Plantation at Princeville. A $525,000 unit will rent for roughly $2,300/month.

All rough numbers - but figure mortgage with 30% down will be roughly $1,750/month.

Figure $500+ for monthly maintenance fees + property tax + GET tax on rent + if needed 10% of rent for a property mgmt company.

You'd likely be far better off taking that $150,000+ down payment and investing that in something else - and then buy when you retire. (And living in it 6 months and trying to rent it the other 6 months will be extremely difficult on a year over year basis at best).
I agree with you that it is a risk but I believe the numbers are slightly more positive if you consider it as a short term rental at $200 per night and rented 80 percent of the time (58k year).That revenue gets eaten up fast with a 25 percent management rate and all the other overhead costs you mention.

The thing is if I can own by the time I retire the revenue for the 6 months per year would be enough to live on while on the island as long as I no longer have a mortgage payment. Like having a USD pension..... Which is incredibly appealing considering the volatility of the Canadian dollar
Reply With Quote Quick reply to this message
 
Old 02-03-2016, 02:23 PM
 
Location: Kailua
8,383 posts, read 10,300,063 times
Reputation: 3790
Quote:
Originally Posted by Kauaiforlife View Post
I agree with you that it is a risk but I believe the numbers are slightly more positive if you consider it as a short term rental at $200 per night and rented 80 percent of the time (58k year).
I don't see that happening at all.

The 2 bedrooms for the place I mentioned are on VRBO listed about $150/night with lots of availability. Kauai is not the hotbed of tourism like Oahu and Maui are.
Reply With Quote Quick reply to this message
 
Old 02-03-2016, 02:31 PM
 
Location: Toronto Canada
6 posts, read 7,651 times
Reputation: 12
I guess I figured Kauai and Maui were similar as I know someone who is able to break even in Kanapalli
Reply With Quote Quick reply to this message
 
Old 02-03-2016, 02:37 PM
 
Location: Kailua
8,383 posts, read 10,300,063 times
Reputation: 3790
Quote:
Originally Posted by Kauaiforlife View Post
I guess I figured Kauai and Maui were similar as I know someone who is able to break even in Kanapalli
Ah - not comparable at all.
Reply With Quote Quick reply to this message
 
Old 02-03-2016, 05:20 PM
 
Location: San Diego
417 posts, read 384,028 times
Reputation: 787
I agree with whtviper. Assuming you can rent out for $200/night 80% of the time isn't accurate. And owning property in Kauai's climate costs a lot! Association dues will be minimum $500 (not including your unit's electric bill) and I've found things need to be replaced more often from rusting. The whole front of our 7 year old oven rusted off for example and there was only 1 person on island who could repair it. So it wasn't cheap. So paying to fix things and for labor is a fortune especially if you are off island. Then you pay a management company monthly and cleaners. I really wouldn't spend my money on a rental condo in Kauai. I think investing in something else is smarter and then retire there when you can afford to.
Reply With Quote Quick reply to this message
 
Old 02-04-2016, 07:46 AM
 
1,040 posts, read 568,144 times
Reputation: 817
Also flood insurance at association level is being passed on in maint and over next ten years set to rise a lot till they are all full risk rate.

Also in electric condos those HVACs and water heaters lucky to get 10-12 years out of and in most owner has to pay up.

I own a condo near the beach, not in Hawaii, but the extra costs in purchase price vs maint on a year round basis does not cover that at most I get an extra $200 a month rent.

Which forces me to do a off peak rental for 8 months then try to juggle VRBO at peak weeks to make it work. And I have no management company or realtor. I live a few miles away. The realtor wanted 10 percent on fees, I need a maid between tenants then use buildings handiman for repairs who charges full price for materials and rounds up hours.

For example last year a GFI switch broke, a toliet would not stop running and I needed to recaulk a window and woodshave a sticky bathroom door as well as touch up some paint. All in that cost me maybe $50 bucks as I did it myself. If I hired an electrician, plumber, painter, I dont see how I make a profit.

And one infamous condo called Gureney's Inn out on Montaulk Long Island right on the beach, a 5 star resort for years for out of state guests they would underestimate the amount of weeks your unit was rented and pocket all the cash. They got caught owners spent the money and just declared bankrupcty and in bankruptcy court guess what son was highest bidder and a decade later did it all over again!!!

So you need a very honest management company if you are from another country.
Reply With Quote Quick reply to this message
 
Old 02-04-2016, 07:52 AM
 
1,040 posts, read 568,144 times
Reputation: 817
Quote:
Originally Posted by scgali View Post
I agree with whtviper. Assuming you can rent out for $200/night 80% of the time isn't accurate. And owning property in Kauai's climate costs a lot! Association dues will be minimum $500 (not including your unit's electric bill) and I've found things need to be replaced more often from rusting. The whole front of our 7 year old oven rusted off for example and there was only 1 person on island who could repair it. So it wasn't cheap. So paying to fix things and for labor is a fortune especially if you are off island. Then you pay a management company monthly and cleaners. I really wouldn't spend my money on a rental condo in Kauai. I think investing in something else is smarter and then retire there when you can afford to.
Also I never rent without a three day gap in summer. First what if tenant does not get out by check out, second I need a maid in there or myself to clean, what if something breaks or maid is late and folks checking in try to check in early or drop off stuff.

Which is why I turn down every rental less than one week. It is not the marriot you only have a single room. And folks as a owner you only replace stuff when it breaks, you are not proactive like Marriot.

For instance in my kitchen I replace every appliance new when it breaks. I replaced Dishwasher in 2013 and prior owner gave me receipts for a Microwave 2010, Oven, 2002 and Fridge 1992.

Any of those appliances go and god forbid on 4th of July day good luck turning it around same day.
Reply With Quote Quick reply to this message
 
Old 02-04-2016, 09:42 AM
 
Location: Toronto Canada
6 posts, read 7,651 times
Reputation: 12
Wow, I'm glad I reached and appreciate the feedback.

I can't believe ownership is so troubling but honestly that must be why you see so many units up for sale.

The dream is on hold although I do see myself buying once I retire and can live in the condo half the time.

No question Kauai is one of the most wonderful places in the world and time spent there is never a mistake

Mahalo
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Options
X
Data:
Loading data...
Based on 2000-2013 data
Loading data...

123
Hide US histogram


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Hawaii > Kauai
Similar Threads

All times are GMT -6.

2005-2017, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32 - Top