Waikiki Beach Condos - crazy high HOA Fees? (associations)
OahuIncludes Honolulu
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Sure - if one buys a home in Ewa Beach versus a condo in Kakaako - you are bound to have differences.
But apples to apples - especially on Oahu, single family home appreciate faster
But it would really be hard to get apples to apples comparison between a condo and a house in the same neighborhood. But a million will get me into a higher appreciation condo neighborhood than the market it would get me into for a house.
I'd rent before I bought and I'd be looking in Kaka'ako, not Waikiki.
There are some nice new developments coming along in Waikiki (and a few nice existing ones where I wouldn't mind living). I came across a building under development next to the Hilton Garden Inn Waikiki Beach on Kuhio during my trip just now. Though, I'd agree with you that I'd generally look to Kaka'ako vs. Waikiki.
There are some nice new developments coming along in Waikiki (and a few nice existing ones where I wouldn't mind living). I came across a building under development next to the Hilton Garden Inn Waikiki Beach on Kuhio during my trip just now. Though, I'd agree with you that I'd generally look to Kaka'ako vs. Waikiki.
It will be interesting to see the impact on the Waikiki rental market.
Kaka'ako is new and such but you are still 8 lanes away from the beach and the traffic noise has to be considerable. Out of the 40+ new buildings I think only a few will hold value from their original pricing. I think they have too much extras to upkeep and the high expenses will keep values down. Waikiki has issues also but I think values will continue along as they have.
It will be interesting to see the impact on the Waikiki rental market.
Kaka'ako is new and such but you are still 8 lanes away from the beach and the traffic noise has to be considerable. Out of the 40+ new buildings I think only a few will hold value from their original pricing. I think they have too much extras to upkeep and the high expenses will keep values down. Waikiki has issues also but I think values will continue along as they have.
Ah, thanks! I didn't know know that about the development until you posted. It is looking pretty nice, all the same.
As for some of the Kaka-ako developments, the sound-proofing in some of them is pretty solid. My friend owns in the building atop of the Mercedes-Benz of Honolulu building off Ward and Kapiolani (I think it's the symphony building but am blanking on the name); on the other end of Kaka'ako and a little farther from the water. If this is standard sound-proofing, then many may not have much to worry about
I don't have any properties with over $700 maintenance fees. I do have a 2 bedroom mid $600's and a small unit mid $600's but that includes electricity, cable and internet! Some of the listings are coops and those don't always separate the property taxes out of the maintenance.
If you lived in a single family you would have to include such expenses as alarm monitoring, landscaper, pool service, roof and painting, etc. And management of those services. You do have more control of how and when those services are done but they do add up. Also your condo insurance included in your maintenance will cover pretty much everything past your paint. Some things are more expensive in a large building but other things you should have some economies of scale.
To add to this subject is the shutting down the short term rentals for condos outside of Waikiki. They are looking at requiring a 180 day lease for all rentals. This basically kills the airbnb market outside of Waikiki. There are 880 authorized rental properties in Oahu as of now. This is basically because the airbnb have been taking away from the 100,000 hotel rooms in Waikiki.
The $1000 for condo maintenance is a fact of life for the better condos for a 2 bedroom and 2 bath unit.
With regard to HOA/Condo fees, BUYER BEWARE! The fees are not based on size or amenities. It is critical for all buyers to review, and understand, the Association's annual budget, and, especially, their 20 year Reserve Funding plan. While there are many buildings with reasonable fees, you need to see that the reserves meet the needs of a particular property. The maintenance fee is not an arbitrary number...it is calculated from two separate elements. First is your "operating" budget, which addresses ordinary expenditures such as water, sewer, trash removal, insurance, yard service, and other daily/monthly items that vary from project to project. It also includes a small amount of contingency funds for the occasional unexpected plumbing or electrical issue, or minor building repairs. All operating expenditures are for a single budget year (either the current year, or the upcoming year for planning purposes). Left over contingency and other funds are "rolled over" to the next year. The second, and most critical element of your maintenance fee is the Reserve Funding. Hawaii Condo laws require EVERY common element that would cost more than $10,000 to substantially repair or replace be identified as a separate line item on the funding plan. Your Board needs to determine the "remaining life" and current "replacement cost" of each element, calculate AND Fund for your needs over a minimum of a 20 year plan. This will ensure the Association has the needed funds as the various elements "wear out". It also will result in a more stable long term maintenance fee cost. It would be expected to rise each year, but not dramatically, and without requiring a separate Special Assessment if monitored and adjusted properly.
Unfortunately, there are MANY Associations that are proud of not having raised their maintenance fees for years. Generally speaking, they have failed to properly maintain the property, and you will be forced to pay a large "Special Assessment" or see your fees dramatically increase in order to "catch up" with deferred maintenance at some point. This is contrary to the intent of the project developers, and the law. New buyers should not have to pay for elements that old owners have "used up" over the prior 20 years.
Keep in mind, your Association is a "Non-Profit" entity (usually). The sole purpose of the Association is to protect and maintain ALL of the common elements in a clean, safe, and effective manner, and to assess the owner's the necessary amount to accomplish this. It is NOT your Board's purpose to choose which elements to keep up, and which they can ignore in order to keep fees down.
Of course, a two bedroom highrise unit with pool and other amenities is going to cost more than a studio walk-up for basic maintenance, which will certainly lead to a higher maintenance fee, but that studio could be facing huge increase or Assessment if their Reserve planning is a fail.
With regard to HOA/Condo fees, BUYER BEWARE! The fees are not based on size or amenities. It is critical for all buyers to review, and understand, the Association's annual budget, and, especially, their 20 year Reserve Funding plan. While there are many buildings with reasonable fees, you need to see that the reserves meet the needs of a particular property. The maintenance fee is not an arbitrary number...it is calculated from two separate elements. First is your "operating" budget, which addresses ordinary expenditures such as water, sewer, trash removal, insurance, yard service, and other daily/monthly items that vary from project to project. It also includes a small amount of contingency funds for the occasional unexpected plumbing or electrical issue, or minor building repairs. All operating expenditures are for a single budget year (either the current year, or the upcoming year for planning purposes). Left over contingency and other funds are "rolled over" to the next year. The second, and most critical element of your maintenance fee is the Reserve Funding. Hawaii Condo laws require EVERY common element that would cost more than $10,000 to substantially repair or replace be identified as a separate line item on the funding plan. Your Board needs to determine the "remaining life" and current "replacement cost" of each element, calculate AND Fund for your needs over a minimum of a 20 year plan. This will ensure the Association has the needed funds as the various elements "wear out". It also will result in a more stable long term maintenance fee cost. It would be expected to rise each year, but not dramatically, and without requiring a separate Special Assessment if monitored and adjusted properly.
Unfortunately, there are MANY Associations that are proud of not having raised their maintenance fees for years. Generally speaking, they have failed to properly maintain the property, and you will be forced to pay a large "Special Assessment" or see your fees dramatically increase in order to "catch up" with deferred maintenance at some point. This is contrary to the intent of the project developers, and the law. New buyers should not have to pay for elements that old owners have "used up" over the prior 20 years.
Keep in mind, your Association is a "Non-Profit" entity (usually). The sole purpose of the Association is to protect and maintain ALL of the common elements in a clean, safe, and effective manner, and to assess the owner's the necessary amount to accomplish this. It is NOT your Board's purpose to choose which elements to keep up, and which they can ignore in order to keep fees down.
Of course, a two bedroom highrise unit with pool and other amenities is going to cost more than a studio walk-up for basic maintenance, which will certainly lead to a higher maintenance fee, but that studio could be facing huge increase or Assessment if their Reserve planning is a fail.
Great explanation.
I noticed you tempered your comments with a strategically-placed "usually".
In your well-informed opinion, how big of a percentage of the whole does "usually" pertain to? Is it a common situation, or rarely found, or somewhere in between.
Rarely. I qualified the statement "just in case". With thousands of Associations in Hawaii alone, anything is possible...
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