Aloha folks from Dublin, CA (SF Bay area)
We are considering buying the following home in the Pualani Estates:http://www.hawaiilife.com/mls/265758/
" onclick="window.open(this.href);return false;
460K Asking price.
Our offer slightly below the asking price has been agreed and will become formally finalized when we sign the doc and fedex it back in the next few days.
Now that we are close to buying, my wife and me are a little nervous and anxious about the whole thing. We are in our late 30's and looking to buy this as a investment property. Planning to put in a 30% down payment and rent this home on a long term basis. We are hoping the rent will cover mortgage payment. We are not planning to live there in the immediate future. Would like to hear from the experts on their thoughts on the following:
- is this a good investment choice
- how is the rental market for long term lease in BI and specifically Pualani
- thoughts on how RE future in BI looks.
I know these are big questions. But any thoughts.. specifically from Kona Dave and/or John Rabi would be much appreciated.
After 30% down, my monthly payments on mortgage, tax, insurance, HOA, utilities, property mgmt is about $1900.
Also, any good contacts for property mgmt and home insurance, would be much appreciated.
Thanks a bunch
I won't be able to answer all your questions as I am not the real estate expert that John is. I am sure John will give you his answers as well. But it might be a week or two before he is able to.
Whether this is a good investment or not really depends on what YOU consider to be a good investment. My father hated real estate as an investment and always told me to stay away from it as an investment. And being the good son that I am I promptly went into the real estate market and have done only okay for myself. My investments in real estate include mainland properties as well as Hawaii properties. There are three ways in my opinion to benefit from real estate investments. And that is as a flip or through renting or a combination of long term ownership and renting. This does not include property that you buy to live in. I have done well in the long term rental market and have done okay at the short term sales I have had. As far as steady income from rentals is concerned I am doing okay. But if I have to sell them for any reason I will be taking a loss or making very little. Property on the BI is a bit more conservative. As prices are more stable and don't go up or down quickly like they do on the mainland. So having them as rentals is probably a good idea. But only if you can get good tenants long term. Finding good tenants on the BI is hard enough. But to find long good long term tenants is VERY tough. I am lucky that it took me only 3 years to find good long term tenants for my property on the BI. Your plan sounds solid to me but the tenant factor is going to be a concern for you. Unless you bought the home below market value I would not expect it to go up in value like what you see on the mainland.
I think the future is bright for the BI but not like Oahu, Maui or Kauai. I believe you will see slow and steady growth. But I do mean slow. Unless of course we have another market meltdown. Let's face it. If your house was on one of the other islands it would have sold for asking price within a few weeks instead of 2-3 months.
Your mortgage of $1,900 is not bad considering you should be able to get rent close to or more than that. The problem again is finding good long term tenants. Sorry but I can't answer the other questions for you. We will have to wait for John to answer some of those.
Good luck with your new home and welcome to Hawaii Life