Linda McCabe and Erin McCabe with Corcoran Pacific Properties
Three Ways to Blow a Vacation Rental Condo Purchase
Oahu is known as “the gathering place” and, in any given year, nearly five million tourists converge and fuel the island’s number one industry. Though Oahu is the third-largest Hawaiian island, its tourist population is larger than that of the other islands combined, and rightly so. Oahu offers the total tourism package – from cultural charisma and brilliant tropical scenery to Honolulu’s Waikiki Beach, Diamond Head, and Pearl Harbort.
In Oahu, the demand for condo vacation rentals is as hot as the visitor market. Most people who venture into the industry immediately think, “We can vacation there a couple weeks a year and rent it out the other 50 weeks. That will not only pay for our vacation; the condo will pay for itself.”
Some people save money doing just that but there are a few costly mistakes and pitfalls along the way. If you’re considering purchasing a condo as a vacation rental, here are three common mistakes to avoid:
Not Accounting for All Your Costs
Pricing the operating cost of a vacation condo is more complex than most people initially realize. Before you can effectively price the rental fee, you must determine your total costs. While that may sound like a no-brainer, new vacation property owners are often quick to account for property costs but fail to roll in other big ticket expenses like taxes, HOA fees, assessments and management fees as well as condo upgrades and repairs. A good lesson to remember: not accounting for all costs can make the difference between black ink and red ink.
Not Considering a Condo Management Company
First According to Hawaii law, you must have a contact person on the same island as your vacation rental. Unless you live in Oahu and have the time and expertise to manage your vacation rental, consider contracting a professional management company to manage it for you. Of course, all management companies are not created equal. Some boutique companies charge up to 50 percent while certain smaller companies with excellent track records may charge less than 30 percent. Make sure you interview several companies before making a selection.
Not Planning for Vacancies
Even Waikiki’s busiest hotels are not booked to capacity year-round; seasonal lulls exist in the August – November period. So plan for some vacancies and be sure to include the time you and your family will vacation in the condo. This is another area where you can benefit from a vacation property management company: they’re typically proficient at projecting potential vacancies.
A vacation rental in a condotel building – like Trump Tower Waikiki – is an ideal scenario for purchasing a condo on a turnkey basis. In addition to having an onsite property manager, luxury 5-Star amenities include a bellman, concierge, and valet as well as restaurants, bars, swimming pool, and spa.
Sound daunting? Contact us and we'll get you started down the right path. Having a team around you familiar with condos in Oahu is the first step to success.
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Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.
Waikiki is not just a top tourism destination in Oahu, it's a hip urban neighborhood and one of the hottest places to live. Not many neighborhoods can boast of a world-class beach and some of the best restaurants and shops in Hawaii - all within walking distance of Waikiki condos. Not to mention the views of Diamond Head and the close proximity to Kapiolani Park, a 170-acre, tranquil, ocean front oasis.
When you enter the Trump Tower Waikiki, you are greeted in 5-star style by a bellman, concierge and valet. The jaw-dropping lobby, lounge area, pool, spa, bar and several restaurants, make the hotel lifestyle come to you. Set in a prime Waikiki location, this first-class condotel offers private meeting rooms, a fitness center and a full range of personal services including valet parking, child care and in-room dining.
Units in the Trump Tower Waikiki condominium range from suites ...
The Fair Housing Act prohibits discrimination in housing based on color, race, religion, national origin, sex, familial status, or disability.
Information Deemed Reliable But Not Guaranteed. The information being provided is for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This information, including square footage, while not guaranteed, has been acquired from sources believed to be reliable.
Last Updated: 2022-07-01