Looking for an investment property in Maui? Studio residences at Honua Kai are some of the best cash on cash performers that I have seen in the entire marketplace on Maui and I would prognosticate are some of the very best in the state. One of the most important criteria that many of my clients employ when making their investment decision for purchasing a condotel property is how well the property rents out, what the average daily rate (ADR) is, and what are the operating costs of the property. They employ these calculations to determine their cash on cash ROI.
My wife and I own Hokulani #833, an eighth floor inner courtyard full ocean view studio at Honua Kai, and have been very pleased with our investment. Interested in trying it on for size before purchasing one like it? Here is the link to our rental site.
My little sister, Chloe, and her husband Zach Way just recently got married this summer on our family’s property in Haiku and they spent their honeymoon together in Hokulani #833
Studio Operating Costs
HOA Fees: Because of their smaller square footage figures, which range from 583 sq.ft.-615 sq.ft. with roughly 100 sq.ft. of covered lanais, the HOA fees are the lowest at the resort. The current rate for HOA fees at Honua Kai are $1.65/sq.ft. of interior living area.
Property Taxes: If rented out on a short-term basis like most of these properties are, the property taxes are calculated at just under 1% of annual assessed value - the actual rate is $8.55 per $1,000 of assessed valued, which is down from the $9.11 rate used in 2014. There is very little correlation with market value and tax assessed values so please do ask about the actual amounts which will vary on individual units.
Property Management Fees: Full service management companies at Honua Kai are charging anywhere from 25-40% of gross revenue amounts. My wife and I offer a full service program at Honua Kai; we are doing exceptional numbers on the 6 properties that we manage. Vacation rental condos at Honua Kai offered by The Stice Team and Hawaii Life.
Other Costs: The aforementioned three costs are the most significant for these types of properties, but there are other costs that do need to be considered: electric ($150 or so, less per month for a studio), $75 per month for basic phone, cable, and internet, $35 for contents/renters insurance, and $15 per day resort fees.
Depending on your property management arrangement, you may also be responsible for the annual VRBO advertising premiums, property reserves, and annual inventory replenishment. In order to properly operate your property, you will also have other costs including but not limited to: professional photos, linens, towels, beach gear, artwork, kitchen items, etc.
Most commonly, management companies do pass along the cost of the GET (General Excise Tax), TAT (Transient Accommodations Tax), and cleaning fees to the guests. You are still required to remit the taxes to the state of Hawaii.
Konea #515 is one of the featured studios in my below gallery, listed at $789K
Full kitchens, king size beds, and comfortable living areas with roughly 600 sq.ft. of interior living area make Honua Kai studios one of the top attractions in all of West Maui for smaller groups. Most units have pull-out sleeper sofas, so sleeping 4 is a possibility.
High Occupancy and Average Daily Rates
Unlike larger properties at Honua Kai and other comparable resorts, studio properties can be fairly easily rented out throughout the entire course of the year. There is always some couple or individual who wants or needs to come to Maui, and as long at the rate is right, you can rent it.
During our first year of rental operation for our studio Hokulani #833, we chose to keep the rates lower so that we could introduce as many guests to the property as we possibly could. In our second full year of operation, we have been raising our rates and I believe that we will continue to do so. We were rented out for 87% of available dates in 2015 with an average daily rate of about $275, giving us a gross income of about $87k.
There are currently two other studios on higher floors that are actively for sale that I believe would do very similar numbers to ours - this would be our neighbor at Hokulani #837 and the unit below it Hokulani #737.
The lower floors, say 5 and below, generally have a bit lower ADRs (less ocean view), but can have just as high rental occupancy percentages.
I have seen gross rental incomes for Honua Kai studios range from $60-93k and there are a variety of factors that come into play, so please do reach out if you want the full scoop.
All studio properties at Honua Kai are located in the inner courtyard of each tower and every one on the 3rd floor or higher has at least some ocean view. Pictured above is the view from Konea #515.
Studio Properties at Honua Kai
After a significant amount of time with sparse inventory supply for studios at Honua Kai, buyers now have their pickings of 7 different units that are actively listed for sale. Gallery of 7 Honua Kai studio properties.
Ready to make a studio property at Honua Kai yours today? Reach out and let's make it happen together.
Honua Kai Hokulani #833 Owner
All Honua Kai Real Estate For Sale
Here is a gallery of all the active and pending resale properties currently on the market: Honua Kai Real Estate Gallery. Please contact me directly for unlisted resale properties as well as my top picks for remaining developer inventory.
For All Things Honua Kai Related
As an owner at Honua Kai and director of a very successful property management company at Honua Kai, I take great pride on providing excellent market insight, service, and negotiation strategy – please let me know how I can be of service to you today.
My Blog Series on Honua Kai Condos
Please visit my website dedicated to all things Honua Kai, including the most recent market updates, here: www.HonuaKaiBlog.com.
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