How to Invest in a Kauai Condo
Part of the Hawaiian chain, the island of Kauai attracts visitors from around the world looking for rest and rejuvenation in paradise. That's why many property investors own condos on Kauai, renting them out as vacation rentals. Some years ago, condo sale prices were astronomical and units were hard to come by. However with the real estate bubble bursting, prices have come down significantly, and there's quite a selection to choose from.
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Instructions
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Familiarize yourself with the island. Know the names and personalities of the main towns. Northern towns like Princeville and Hanalei attract those looking to get away from it all in the midst of spectacular scenery. Eastern towns like Kapaa and Lihue are centrally located and offer easier access to the island's main airport, restaurants, and shopping areas, while still providing scenic beaches galore. Poipu and Koloa to the south attract those who enjoy sun exposure and carefree days at the beach. Figure out where you'd like your condo to be.
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Do a search on a realtor website. Search on the name of the town you're interested in and specify your price range. For each listing, read the information carefully and study all the pictures posted.
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Make a list of units available in your price range that you're interested in. Be realistic about what you can afford, and choose accordingly. Once you've studied the listings, pick which ones you like.
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Contact the listing agent. Each listing has the name and number of the listing agent. Call him or her (be aware of the time zone difference between Hawaii and wherever you are).
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Ask a ton of questions. Is it a fee simple or leasehold sale? Find out the difference before you call the realtor. What's included in the asking price? Kauai condos typically are sold with all furnishings and appliances. How long has it been on the market? How well does it rent? What amenities are nearby? While you've got the attention of the realtor, ask him or her if there are any "secret" listings in your price range. These are properties that are for sale but aren't listed.
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Narrow down your list. After talking to various realtors, you should be able to delete some units from your list. Of the ones left, rank them according to how interested you are in each based on your personal criteria.
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Ask if the sellers would consider offering seller financing or other incentives. In a competitive market, sellers are often willing to offer extras in order to get their unit sold. They might offer seller financing (ask about terms), a remodeling allowance, or a lower asking price to interested, qualified buyers.
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See the unit in person before making an offer. Those pictures sure look great. But photos alone aren't enough to make a decision. You, or a representative you trust, need to fly out to Kauai and look at the unit in person. Stay there, if you can. Explore the surroundings. Is the complex attractive or rundown? Is the unit structurally sound? Does being there feel right? Would you be comfortable having your mother-in-law stay here? How much is the monthly maintenance fee? What about other fees?
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Do the math. This one's probably the most important step of all. Once you've picked a place that you'd like to invest in, calculate (or estimate to the best of your ability) the monthly or annual total expenses and revenues. Will your investment be worth it? If you can more or less break even and you feel the property value will increase in the coming years, then it's probably a good investment.
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Tips & Warnings
As long as it continues to be a buyer's market, you've got the upper hand. Negotiate!
