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Old 11-26-2013, 10:26 AM
 
113 posts, read 163,779 times
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Aloha,
My wife and I are closing on a commercial/residential property in Hanapepe town in a few days and plan to rent the place until it is paid off in a few years. Once we pay it off completely, we are planning to move there and run our businesses from the property as well as live there. We plan on getting a leasing agent to help with renting, plus we have Ohana living in Princeville if needed. Any advise on being a landlord in Kauai would be very appreciated, especially the gotchas. Also does furnishing the property makes economic sense for renting? Can we get more per month for it or is not worth the effort and expenses?
Mahalo
Chris
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Old 11-26-2013, 12:09 PM
 
Location: Volcano
12,969 posts, read 28,476,469 times
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I'd say a couple of key things to remember are that you are legally required to have a local property manager, not just a leasing agent, and that you need to register with the state and pay GET on the rent.

Good luck!
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Old 11-26-2013, 12:33 PM
 
113 posts, read 163,779 times
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Thanks OpenD. Good to know about the local property manager law. I guess my Ohana in princeville can possible help with that.
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Old 11-26-2013, 06:56 PM
 
Location: Volcano
12,969 posts, read 28,476,469 times
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Quote:
Originally Posted by HanapepePuppy View Post
Thanks OpenD. Good to know about the local property manager law. I guess my Ohana in princeville can possible help with that.
Basically, just put yourself in the place of the tenant... if the water heater goes out at the beginning of a a long holiday weekend, who you gonna call?

Hint: the phone number better have an 808 prefix.
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Old 11-27-2013, 08:33 AM
 
113 posts, read 163,779 times
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Makes sense to me.
By the way, does anyone know if furnishing the house makes sense for renting? I would imagine that it would increase my potential market of renters, especially those from the mainland but with such a tight rental market as there is on Kauai it may not matter. Basically we want to be there asap and having maximum return on our rental investment only helps get us there sooner.

Chris
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Old 11-27-2013, 05:53 PM
 
198 posts, read 387,443 times
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Do not bother furnishing it unless you plan to vacation there when not occupied.

Why? Because you can expect only $50 to $100 extra in rent (from my ownership experience).

To furnish it would not be a good return on your investment now.
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Old 11-28-2013, 03:46 AM
 
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I'm having a hard time believing there's a property on Kauai that can be bought in the current market and rented for more than the mortgage--unless you put 50% down. Especially with the leasing agent taking 10% or more of the rent every month.

Not to discourage you, but I would not recommend being a long-distance landlord in Hawaii. Especially in Hanapepe where most of the commercial buildings I can think of are old and termite-prone. That makes for a lot of maintenance, and maintenance is very difficult remotely (finding the exact problem, finding someone to fix it, making sure the work gets done, etc.). With family here, you'll have some contacts (for repairmen, yard service,...) but frankly, Pville and Hanapepe might as well be on different islands for all they have in common and for how long it takes to drive between them.

I was a remote landlord on Kauai for a few years and had to fly over every 6 months to deal with the property and the tenants. That ate into the profits (or rather further into the red), and took a lot of time and vacation. Finding good tenants was always a challenge, none stayed more than a year, many less. Malihini (mainlanders fresh of the boat) were the worst because they are looking for their dream home and keep moving around. I think a furnished place appeals to the more short-term tenant, so that won't work in your favor. If there are any issues with payment, you need a lawyer because you're not there to represent yourself in small claims (wish I didn't know about that).
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Old 11-28-2013, 08:37 AM
 
113 posts, read 163,779 times
Reputation: 215
Thanks for all the great advise everyone, this is a great resource and your replies are very appreciated. It confirms my suspicions about furnishing the home and how it is just not worth it. kauaihiker, we have put down a substantial amount down and we are only renting it so that we can pay more on the mortgage every month so profit is not as much of a concern as paying off the mortgage as fast as possible so that we can move to the island ourselves. We plan to have a rental manager on the west side as we realize the hassle it would be for family to deal with issues from Princeville, but it still helps if really needed. Sorry to hear about your payment issue but thanks for sharing, it is good to know just in case.
Mahalo
Chris
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Old 11-28-2013, 09:43 AM
 
Location: North Idaho
32,679 posts, read 48,185,877 times
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Advice? Read the Hawaiian landllord/tenant law very carefully. It is pro-tenant. Your manager should be able to follow the law, but you really need to know what is in it, yourself, and you really need to monitor and make sure it is followed, because it will be you, the owner, who pays for mistakes.
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Old 12-05-2013, 12:15 PM
 
113 posts, read 163,779 times
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Just an update. Today makes it official, we are now official property owners on Kauai , we have a great property manager and hope to be moving there in the next couple of years...
Again a big mahalo to all for all the great help.
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