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You clearly do not understand inflation, economics or supply and demand.
Inflation impacts the purchasing power of the dollar. Supply and demand determines the value of real estate. Both result in the higher than just inflation increases in rents and prices in Honolulu.
How do you explain Honolulu having among the highest rents in the country? Did the rent fairy come by in 1950 and say rents are $100 in Indiana AND $500 in Honolulu and they shall both increase only by the rate of inflation? I bet there are some people in Detroit that WISH their properties increased by the rate of inflation.
Still waiting for any 1978 Waikiki/Diamond Head rent comp that has ONLY increased by 3%. Surely with all your local family/business contacts you can fine ONE 1 bedroom apartment renting for $1800 today that rented for $600 in 1978.
And yes there are people that are paying under market rents in Hawaii. BUT that does not change what markets rents are. That's how you can determine that the rent IS under market. I was trying to find an article from maybe 10 years ago that identified Aina Haina as an area that had a lot of mainland haole boomer landlords that had long term under market tenants that would probably see major rent spikes when the boomers liquidated/died off. It's not just the local/Chinese/Japanese landlords that value long term tenants.
Thank you for the crash course in Economics 101. My argument has never been about WHY rents are where they are here or why they are so high compared to other parts of the mainland. Where on earth do you come up with these conclusions? More reading comprehension problems? Obviously both supply and demand and the value of the dollar will determine rents and property valuations. That was NEVER an argument. For the 378th time, my argument is that rents have NOT been doubling every 12 years since 1978 as you and viper believe they are. There was someone that recently posted they paid $800/mo for a 1bdrm in Hawaii Kai at about the same time. Is that not worth anything? The two "data" points via links viper posted support a 2.8% and 3.5% increase over a period of ~8-20 years respectively. Was the writer of that article stating rents double every 20 years drinking too much koolaid? Everyone but you must be crazy right?
And no, I did not say Chinese/Japanese/Portuguese/whatever are the ONLY ones that value long term tenants. They are, however, the ones that GENERALLY (in the early/mid 1900's) immigrated here with very little resources or money... very much UNLIKE the good majority of the transplants from the mainland (which are a mix of races but predominately white) that have relocated here mostly from upper middle class or wealthier demographics. As a common GENERALIZATION, wealthier people require more shiny, expensive, pretty things to keep themselves entertained and happy and the constant need to feed their consumer lifestyles requires more income... and that usually will partially come from their tenants if they invested in local RE. As anyone that speaks about race and demographics it will always be based on GENERALIZATIONS so yes, there are always exceptions. But let's be real here. There's a reason why wealthy white people are often generalized and stereotyped in a negative light by long-time locals. There is ALWAYS a reason why any race is stereotyped. It's not make-believe like your 6% rents.
There was someone that recently posted they paid $800/mo for a 1bdrm in Hawaii Kai at about the same time. Is that not worth anything? The two "data" points via links viper posted support a 2.8% and 3.5% increase over a period of ~8-20 years respectively. Was the writer of that article stating rents double every 20 years drinking too much koolaid? Everyone but you must be crazy right?
That $800 a month rent I pretty much called bullsh*t on. First I do believe it is on the high side but have nothing to support that. I'm the Waikiki/Diamond Head expert. I do know what my salary was back then as a college educated manager trainee and it would not allow me to live in that luxury. And yes the $800 property is a 2/2 over 1600 sf. I'm talking 500-600 sf 1/1. Of course the poster did not expect me to call him on it and then explained it was subdivided(probably illegally) into two units, probably still 800 sf. And their website calls them luxury units with clubhouse/driving range etc. That is not a comp for a 1978 Waikiki apartment.
As far as the article, I believe it reports "average" rent increases. Those Waianae properties are probably having a negative impact on the "average". I'm reporting factual same unit rent growth. Now I did look outside my area probably 10-15 years ago to see if I was losing any profits and made the determination that I'm doing very well where I am. If your family wants some investing help I'd be happy to show them
areas with better rent growth and appreciation. At least better that what the "average" investor is getting.
Location: not sure, but there's a hell of a lot of water around here!
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Quote:
Originally Posted by honobob
That $800 a month rent I pretty much called bullsh*t on.
Give Arquette Properties a call, they handled it. No BS here. Also rented a place at Heritage House in Hawaii Kai, 2/2, in 1993, from James Kreuger, $1650.00 a month. That same unit must be well over $4,000.00 a month now. Honobob, do us all a favor, stay in the Bay Area.
Also rented a place at Heritage House in Hawaii Kai, 2/2, in 1993, from James Kreuger, $1650.00 a month. That same unit must be well over $4,000.00 a month now.
Impossible
At 3% annual increases, that only comes out to about $2,980 today!
That $800 a month rent I pretty much called bullsh*t on. First I do believe it is on the high side but have nothing to support that. I'm the Waikiki/Diamond Head expert. I do know what my salary was back then as a college educated manager trainee and it would not allow me to live in that luxury. And yes the $800 property is a 2/2 over 1600 sf. I'm talking 500-600 sf 1/1. Of course the poster did not expect me to call him on it and then explained it was subdivided(probably illegally) into two units, probably still 800 sf. And their website calls them luxury units with clubhouse/driving range etc. That is not a comp for a 1978 Waikiki apartment.
As far as the article, I believe it reports "average" rent increases. Those Waianae properties are probably having a negative impact on the "average". I'm reporting factual same unit rent growth. Now I did look outside my area probably 10-15 years ago to see if I was losing any profits and made the determination that I'm doing very well where I am. If your family wants some investing help I'd be happy to show them
areas with better rent growth and appreciation. At least better that what the "average" investor is getting.
I'm not too sure it's BS. My parents paid $1,400 for a 2,200 SF 4/3 with 2-car garage at about the same time frame. You also said that was high but I don't know why my parents would lie to me. They had to rent a room out to a study-abroad japanese student (including cooked meals) otherwise they wouldn't have been able to afford it. They just wanted us in a good school district so they were forced to pay the high rent.
I appreciate the offer but I used to own quite a few condos in Waikiki... down to only a handful now. In all good conscience, I couldn't recommend anyone buying high-rise condos anywhere on Oahu. High-rise condo ownership is the worst possible investment anyone could make. Tulips or pogs would be a better choice
I used to own quite a few condos in Waikiki... down to only a handful now.
And STILL can't come up with a $600 1978 one bedroom rent comp????? This is it for me. You are so evasive. Can't provide a comp although you claim to be a Waikiki investor. Can't explain how rents are so high if they ONLY increase with inflation.
PM me when you can provide a comp. Anyone can determine for themselves if they think they can come here and get flyover rents. I'm sure people will be moving here in a few years without jobs just because housing is so cheap. Yep!
And STILL can't come up with a $600 1978 one bedroom rent comp????? This is it for me. You are so evasive. Can't provide a comp although you claim to be a Waikiki investor. Can't explain how rents are so high if they ONLY increase with inflation.
PM me when you can provide a comp. Anyone can determine for themselves if they think they can come here and get flyover rents. I'm sure people will be moving here in a few years without jobs just because housing is so cheap. Yep!
LOL. I didn't know you were actually expecting me to find a rental from 1978. More specifically, a ONE BEDROOM. IN WAIKIKI. IN 1978. You crack me up.
Here is some real factual information that proves 6-7% is a joke (what makes it even funnier is that two links are from viper )
I've not been in Hawaii or Hawaii real estate anywhere as long as any of you guys. But I've read this thread with interest. I can say that I have a 1/1 condo in Waikiki that I rent out. I do know the rent on my unit is under market right now. However, the tenant is a very good tenant, takes great care with the place, pays on time every time, and has been there long-term. I could jack the rent up to market rent and replace the tenant. But i don't need an extra $200/month. And I'm sure my tenant can use the $200 far more than I need it.
But I have raised rent a total of 6% over the past 2-yrs (3%/yr) and will likely offer another 1-yr lease with increase at next renewal.
But the main factor for me is the quality of the tenant and I believe I'm at least $200 to $300 under market currently. If the tenant leaves, I'll likely list it at market rent at that time.
...
I appreciate the offer but I used to own quite a few condos in Waikiki... down to only a handful now. In all good conscience, I couldn't recommend anyone buying high-rise condos anywhere on Oahu. High-rise condo ownership is the worst possible investment anyone could make. Tulips or pogs would be a better choice
I'm curious - could you be more specific why high-rise condo ownership in Oahu is 'the worst possible investment'? Is it because the constant increases in maintenance fees/HOA? Lack of appreciation?
I'm considering buying a high-rise condo around Kaka'ako/Ala Moana/west Waikiki as a primary residence when I move to Hawaii in the near future, and would like to know what to expect.
Thanks!
JT
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