China Oceanwide is sinking millions of dollars into West Oahu. The company has bought up $569 million of real estate there. That includes prime oceanfront land between the Beach Villas at Ko Olina and Aulani.
The company has big plans for that oceanfront land. It is going to build a 1,300-unit Atlantis resort. The resort will have timeshares and hotel rooms. It will sit on 26 acres and will include a water park and aquarium. The entire resort will be water-themed and is expected to be a huge draw for millennials and families.
Once it finishes with that project, it is going to build a couple of luxury hotels adjacent to the property. These hotels will sit on a 17-acre oceanfront lot and are expected to complement the resort. Instead of attracting millennials and families, China Oceanwide expects it to attract couples and others who want a quiet, luxurious vacation. It will be right in the lap of luxury, and it will offer a respite from the noises that come with vacationing.
After it finishes with the oceanfront property, it’s going to move to the border of Kapolei and Ko Olina. It’s considering turning its newly acquired land into a residential subdivision with a golf course. This project will take five to eight years to build and is likely to be magnificent when it’s completed. Expect it to attract some snowbirds, retirees, and others with deep bank accounts who want to live in the lap of luxury.
Moving to Hawaii Was a Smart Move
It’s no secret why China Oceanwide chose Hawaii. It provides the opportunity to connect a thriving U.S. market with the consumers in Asia. The climate and rich culture are sure to draw consumers in, making it a good choice for a long-term investment. In fact, if China Oceanwide is successful in connecting with the Asian market, it will manage to offer a huge boost to tours.
Simply investing in Hawaii wasn’t enough though. China Oceanwide specifically selected West Oahu because of its location. It’s between Waikiki and the neighboring islands. Travelers don’t have to take an additional fight to land on a neighboring island, and they also don’t have to fight the huge crowds that are in Waikiki. That makes West Oahu the prime location for luring in big spenders from Asia.
Boosting Hawaii’s Economy
China Oceanwide isn’t just going to create a nice environment for luxury travelers. It’s also going to help the economy in Hawaii, and that can have a huge impact on the real estate market overall.
Chain Oceanwide will help bring in around $6.1 billion a year. It is also expected to create 31,800 permanent jobs. Add that to the temporary construction jobs, and it’s easy to expect that the economy will be booming.
Investing in Hawaii Real Estate
As the market in Hawaii booms, you might want to invest in real estate. Hawaii is more expensive than other states, and property values continue to rise. In fact, the median price for a single-family home in Oahu just went up to $795,000. While you can also find property in the $300,000 to $500,000 range, you can expect to put quite a bit of money into your investment. That means you need to take steps to protect your investment.
Follow some tips so you can be a savvy real estate investor in the Hawaiian market.
Find the Right Investment
You need to be smart when buying an investment property in Hawaii. If you make the right choice, it will pay off in dividends.
When choosing investment property, there are two things to consider. First, look at the median household income and the monthly costs. You want to make sure your renters can afford to live in the home before you buy it and fill it with tenants. If you pick an area where the median household income is too low and the average monthly costs are too high, you will have a hard time filling it with people who can pay the bills.
Secondly, you want to choose an area with a growing population. When an area attracts new residents, it means it will likely be a good long-term investment. It also means your investment property will likely become worth even more down the road.
So where does this leave you? You have a lot of great options in Hawaii.
Kapolei is a favorite for investors. This place is close to beaches, and it attracts people with enough income to spend on rent. It’s also popular with college students since the West Oahu campus of the University of Hawaii is here, so you will always have access to new renters. If you want to look at rental property, this is an excellent place to start.
Ocean Pointe is also hot for real estate investors. This up-and-coming location saw a population jump of over 20 percent from 2010 to 2012. This spot attracts the upper crust. You might think you can’t rent to people who are wealthy, but that is far from the truth. In fact, the wealthy often like to rent homes so they aren’t tethered to a single location. They can stay in Ocean Pointe for a bit and then go on to their next location after the lease is up.
Waihee-Waiehu can’t be beat when it comes to investing in real estate. While this spot is most popular with homeowners, close to twenty percent of the properties are occupied by renters. This location is close to Kahului, and it is home to the Waiehu Golf Course and the Waihe’e Coastal Dunes and Wetlands Preserve.
You can also pick up some rental property in West Loch Estate. This growing subdivision is known for offering affordable housing and caters to low and middle-income people. Even so, it is close to amenities that people love, such as the West Loch Golf Course and a beachfront park. It’s also close to Honolulu. If you want to buy property here, you can market it to people who work at St. Francis Healthcare System. It’s close to this subdivision, so you can likely find some employees who are looking for housing.
Ewa Villages is down the road from West Loch Estate. It also has a growing population, and while it isn’t popular with renters, some people do rent their homes here. You can pick up some property and reach those people.
These are just a few examples of the places you can buy investment property in Hawaii. Do your homework and pick a spot that fits into your overall investment plan. Then, purchase it and begin renting it out to interested parties.
Understand the Tenant’s Rights
Hawaii has rules in place to protect tenants. As a landlord, you must follow these rules so you don’t end up in trouble with the state of Hawaii.
First, tenants in Hawaii have the right to fair housing. This goes beyond the Federal Fair Housing Act. Hawaii also prevents landlords from discriminating against tenants based on:
- Gender identity or gender expression
- HIV status
- Sexual orientation
- Marital status
The state also has some security deposit protections in place. You cannot charge more than the amount of a month’s rent for the security deposit. If you charge $2,000 a month for rent, you cannot charge more than $2,000 for the security deposit.
You must return a tenant’s security deposit within 14 days of the tenant moving out. The security deposit should be mailed to the tenant’s last known address, and you need to include an itemized list of deductions. Keep in mind that you can even deduct for lost keys as long as you include the item on the list.
It’s worth noting that the state doesn’t have rules in place for how to store a security deposit. You don’t need a separate deposit account for your security deposit. However, it is a good idea to safeguard it in case your tenant moves out.
Victims of domestic violence are also protected under Hawaii state laws. If one of your tenants can prove that he or she experienced domestic violence, the person can terminate the lease early. You cannot charge a penalty for the early termination.
What if the tenant chooses to stay in the property? Then it is up to you to change the tenant’s locks. The cost will be covered by the tenant though.
Most people are honest when it comes to domestic violence claims, but sometimes, a person makes a false claim. If that happens, the landlord can be awarded up to three times the amount of damages or three times the amount of the monthly rent.
Landlords must give tenants at least two days’ notice before entering their property, and they can only enter during normal business hours. Those hours are between 8 a.m. and 6 p.m. If there is an emergency, the landlord is not required to give notice.
It’s also important that landlords make repairs in a timely fashion. Failure to do so means the tenant can reduce the amount of rent paid.
Landlords also must disclose everything in the residential lease agreement. That includes the amount of rent the tenant must pay each month and how the rent should be paid. For instance, if you use online rent collection, you need to outline that in the agreement.
Have a Tenant Screening Process in Place
You are dealing with expensive property in Hawaii. You need to fill that property with responsible tenants who will pay their rent on time. Failure to do so means you will most likely end up losing money on your investment.
Be Upfront about Rent Increases
You are allowed to increase a tenant’s rent in the state of Hawaii. The state requires that you provide written notice ahead of time before doing this. You should go the extra mile though and explain the increase to the tenant. Talk about the increased cost of maintenance and the other reasons you have to increase the rent. Also, don’t increase it too much at once. That will cause your tenant to look for another property.
Have a Presence in the Area
If you aren’t lucky enough to live in Hawaii, you need to hire a management company to look after the property. Otherwise, you might not make repairs in time.
On top of that, tenants are more likely to be destructive if they know you are across the ocean. If you have a management company in the area though, they will follow the rules since they know you can provide notice and stop by.
That doesn’t mean you have to outsource all of your management duties. You can still use property management software to handle many of your duties, such as tracking appraisals and yearly costs. However, the management company can take care of the day-to-day duties.
Are You Ready to Invest in Hawaii?
Hawaii’s real estate market is hot, and it’s only going to get hotter. You can follow in China Oceanwide’s footsteps by picking up some investment property. You don’t have to invest millions of dollars like China Oceanwide though. Instead, you can pick up a property or two, find some tenants, and bring in a nice income.