Hawaii has emerged as a highly desirable location for real estate investors looking to achieve a balance of cash flow and property value appreciation, making it an ideal destination to build a rental portfolio. With its strong and consistent economy, expanding population, and opportunities for vacation property investments, the Aloha State has become a preferred choice among investors. Easy Street Capital is proud to be a trusted provider of investment property loans, dedicated to serving the needs of real estate investors aiming to establish rental properties in Hawaii.
Investment Property Loan Types for Hawaii Real Estate Investors
When considering real estate investments in Hawaii, investors are presented with a multitude of options for rental property loans. With its diverse landscapes and welcoming year-round climate, Hawaii offers abundant opportunities for real estate investors to capitalize on the warm climate and attract tourists. Hawaii presents an array of potential investment opportunities as it boasts a significant number of older properties that are in need of renovation and restoration. For investors skilled in property rehab, hard money renovation loans are a perfect choice! These loans enable you to swiftly purchase a property while financing the renovation costs. Once the rehabilitation is complete, you have the flexibility to either “flip” the property for a quick profit or pursue the BRRRR Method by renting it out and subsequently refinancing it into a long-term, low-interest DSCR loan!
DSCR Loans with long-term fixed rates are an excellent option for investing in turnkey rental properties. Turnkey properties are ready to rent without requiring any renovation work. Move-in ready single-family residences and fully furnished vacation rentals offer a great combination of cash flow and price appreciation. By opting for a fixed-rate DSCR Loan spanning thirty years, you secure a stable interest rate over an extended period. Assuming historical trends persist, rents and appreciation tend to steadily rise each year, while the debt costs remain unchanged for the duration of the fixed-rate 30-year loan. As a result, properties financed through a DSCR rental loan should experience increasing cash flow every year of ownership.
Where To Invest In Real Estate In Hawaii
Hawaii, with its enchanting allure, offers a plethora of real estate investment opportunities in its diverse markets. Honolulu, the vibrant capital city and economic center, captivates investors with its thriving urban landscape and the allure of tropical living. Maui, renowned for its pristine beaches and world-class resorts, beckons real estate enthusiasts seeking luxury properties and vacation rentals. Additionally, Kailua-Kona, located on the Big Island, captures the essence of Hawaiian charm with its stunning coastline and rich cultural heritage. Kapolei, a burgeoning city on the island of Oahu, presents promising prospects for residential and commercial investments amidst its rapid growth. Lastly, Haiku, nestled in the lush landscapes of Maui, offers a tranquil escape and potential for eco-tourism and nature-inspired retreats. Hawaii’s diverse market options cater to the varied interests of real estate investors, showcasing the undeniable allure of the island state.
Honolulu
Honolulu, the capital and largest city of Hawaii, is a bustling metropolis with a population of over 350,000 residents. The city’s economy is diverse, with key industries including tourism, hospitality, and military defense. Honolulu is home to numerous international corporations, luxury resorts, and renowned educational institutions, creating a robust job market and rental demand in the area. With over 2.7 million visitors as of 2019, Honolulu is the seventh most visited city in the United States after New York City, Miami, Los Angeles, Orlando, San Fransico and Las Vegas.
Honolulu, a captivating city in Hawaii, offers an array of attractions for investors to capitalize on. From world-renowned beaches like Waikiki Beach to iconic landmarks such as Diamond Head State Monument, the city’s natural beauty is a magnet for tourists. Cultural gems like the Bishop Museum and Iolani Palace showcase the rich heritage of the Hawaiian Islands. Honolulu’s vibrant event calendar, featuring festivals like the Aloha Festivals and the Honolulu Festival, ensures a constant influx of visitors. With its thriving food scene, lively nightlife, and dynamic arts and music scene, Honolulu presents opportunities for both long-term and short-term rentals. According to Zillow, investors can expect to earn around $2,700 per month in rental income. The city’s status as a premier tourist destination guarantees a consistent demand for rental properties, making Honolulu an enticing market for real estate investors.
Maui
Maui, a gorgeous island in Hawaii, offers a thriving real estate market with numerous advantages for investors. It is the second largest of the islands in Hawaii. Known for its pristine beaches, stunning landscapes, and vibrant culture, Maui attracts visitors from around the world. The island’s strong tourism industry, combined with its year-round favorable climate, creates a consistent demand for rental properties.
Investing in real estate in Maui provides opportunities for both long-term and short-term rentals. The island’s allure as a tropical paradise ensures a steady flow of tourists seeking unforgettable vacations. From luxurious resorts to charming vacation homes, Maui offers a range of options for investors to cater to this demand. With its renowned beaches like Kaanapali and Wailea, as well as attractions like Haleakala National Park and the Road to Hana, Maui captivates visitors with its natural beauty and cultural experiences.
Furthermore, Maui’s robust economy extends beyond tourism, with sectors such as healthcare, education, and agriculture contributing to its stability. The island’s local community, rich in Hawaiian traditions and warm hospitality, adds to the island’s charm and appeal. Maui’s investment-friendly environment, coupled with its strong rental demand, presents an opportunity for investors to establish a profitable real estate portfolio.
Overall, investing in real estate in Maui offers the chance to capitalize on a sought-after destination with a thriving tourism industry, steady rental demand, and potential for property value appreciation. With its breathtaking landscapes, cultural richness, and strong economy, Maui stands as an attractive choice for real estate investors looking to make a sound investment in the Hawaiian market.
Kailua-Kona
Kailua-Kona, located on the stunning Big Island of Hawaii, is a beautiful coastal town renowned for its natural beauty and vibrant community. With a population of over 12,000 residents, Kailua-Kona offers a diverse economy driven by industries such as tourism, hospitality, and agriculture. The town’s picturesque beaches, crystal-clear waters, and world-class snorkeling spots attract visitors from around the globe, creating a strong demand for vacation rentals and short-term accommodations.
Real estate investors can take advantage of Kailua-Kona’s strong tourism industry and growing population by investing in vacation rentals and short-term accommodations. According to Zillow, the average monthly market rent in Kailua-Kona as of February 2024 is around $3,700, providing excellent income potential for property owners. The town’s year-round warm climate and breathtaking surroundings make it an ideal destination for travelers seeking a memorable Hawaiian experience.
Kailua-Kona is also home to significant cultural attractions, including historical sites like Huliheʻe Palace and the Mokuaikaua Church. The town’s bustling Ali’i Drive offers a lively atmosphere with a variety of shops, restaurants, and entertainment venues, making it a popular destination for locals and tourists alike. Moreover, Kailua-Kona hosts exciting events throughout the year, such as the Ironman World Championship and the Kona Coffee Cultural Festival, further enhancing its appeal as a desirable place to visit.
Beyond its natural beauty and tourism opportunities, Kailua-Kona benefits from its strategic location as a hub for commerce and transportation on the Big Island. The Kona International Airport and the Kailua-Kona Pier serve as gateways to explore the island’s diverse landscapes, including stunning beaches, lush rainforests, and majestic volcanoes. This accessibility and connectivity contribute to the town’s steady growth and real estate investment potential.
Kapolei
Kapolei, a flourishing city located on the vibrant island of Oahu in Hawaii, offers an exceptional opportunity for real estate investors seeking a thriving market. With a population of over 21,000 residents, Kapolei boasts a diverse economy driven by industries such as tourism, retail, and healthcare. The city’s stunning beaches, including the renowned Ko Olina Resort, and its proximity to popular attractions like the Pearl Harbor National Memorial, make it an attractive destination for both residents and tourists.
Kapolei’s vibrant community is enriched by cultural landmarks such as the Hawaiian Railway Society and the Kapolei Cultural Center, providing residents and visitors with unique experiences. The city’s flourishing job market, fueled by major employers like the University of Hawaii-West Oahu and the Campbell Industrial Park, contributes to a steady demand for rental properties.
According to AirDNA, a trusted data provider, Kapolei received an exceptional Market Grade of A+ in February 2024, with a high “investability” score of 96/100. Furthermore, Kapolei earned a score of 99/100 for seasonality, meaning visitors come to stay in this city all year round! Overall, this makes it an ideal destination for investing in short-term rental properties. With a very impressive average annual revenue of $144,000 and an outstanding occupancy rate of 90%, investors utilizing innovative financing options like DSCR loans from lenders such as Easy Street Capital can achieve significant cash flow and reap the rewards of this lucrative market.
Haiku
Haiku situated on the beautiful island of Maui, mesmerizes visitors with its stunning natural landscapes, serene beaches, and rich cultural heritage. The town’s tranquil atmosphere and abundance of outdoor activities make it an irresistible destination for short-term rental investors. Rental rates remain steady, with peak seasons during the summer months when travelers seek to immerse themselves in the beauty of Haiku. Additionally, Haiku hosts vibrant events like the Aloha Festivals and the Maui Film Festival, adding to its appeal as an investment hotspot.
AirDNA, the leading data provider for investors in short term rentals, gives Haiku a Market Grade of A+, including a 77/100 on “rental demand”, making it one of the best places to invest in short term rental properties. Per AirDNA, investors can expect annual revenue of $97,900, an incredibly high amount. Investors that use DSCR loans from a forward-thinking lender like Easy Street Capital that qualifies the income of the property using AirDNA projections can likely rake in the cash flow.
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Ready to invest in real estate in Hawaii? Easy Street Capital is a top lender for loans for rental properties in Hawaii, both hard money rehabs and long-term investment properties.
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