The Hawaiian real estate market is full of diverse Big Island investment opportunities. When you decide to buy a property that you’ll rent out, you can choose between single-family homes, luxury neighborhoods, and condos with a view. Or, you can select a multi-family building, invest in a duplex or buy a small apartment building.
When you’re deciding what kind of Big Island rental property to buy, you have to consider what you’ll be responsible for when you become a landlord. Let’s take a look at some of the unique qualities and requirements of both single-family homes and multi-family properties.
Single-Family Rental Homes in Hawaii
Single-family homes are great investments anywhere, and Big Island real estate is no exception. When you rent out a single-family property, you can expect to attract long-term tenants who are stable and interested in maintaining a home. These tenants will want to enjoy living in a property that’s their own, without actually buying one. Renting a single-family home is their next best option.
Vacancy shouldn’t be a problem because you’ll be able to attract great tenants. However, one area that will require a lot of your time and resources is maintenance. With single-family investments, you’ll have to decide who is going to take care of the lawn and the landscaping. Your tenants might be willing to do it, but you never know what kind of care they’ll put into it. They might not have the same standards as you or the rest of the neighborhood. Many owners find it’s better to hire a professional lawn service and then include that cost into the monthly rent.
You’ll have the same dilemma about responsibility with pools. If your single-family home has a pool, figure out how it’s going to be cared for and repaired, when necessary. Pool chemicals probably shouldn’t be left up to your tenants to mix and measure. Hire a professional pool service.
HOA Neighborhoods in Hawaii
Many investors focus on single-family homes because they often have higher rental values. But, some homes will be within an association, and you’ll have to consider HOA fees and regulations. Provide your tenants with a complete list of rules and procedures because you’ll be held responsible by the association for any violations. Homeowners usually pay the HOA fee, so you’ll need to factor that into your budget and your rental value as well.
Big Island Investment Homes: Multi-Family Properties
The single best advantage with multi-family real estate investments is that you’re protecting yourself against vacancy loss and the absence of rental income. When you own a building with a handful of rental units, and one of your tenants give notice, you aren’t going to be completely without rental income. You’ve still got your other tenants paying rent every month. This can provide investors with a lot of financial security.
Maintenance responsibilities are going to be a little different than they are with single-family homes, but there is a cheaper per-unit cost when you have repairs and replacements to manage. When it comes to things like HVAC inspections, pest control, and landscaping, you’re paying a lot less when three, four, six, or more properties are serviced at the same time.
Your major headache when renting out multi-family units will likely be your tenants. It’s going to take some work to keep every unit occupied, and you’ll have to work hard on tenant retention. Otherwise, you’ll find yourself marketing, showing, and screening tenants more frequently than you would if you rented out a single-family home. You’ll also have to manage tenant relationships because you’re going to have neighbors living close to one another and sharing communal spaces. There could be disputes over parking, outdoor space, noise, pets, or common areas. Prepare to manage those conflicts if necessary.
When you’re looking for a great Big Island investment property, we can help you decide what’s best. Contact our team at Hawaiian Dream.