Investment Property

Real estate investors and those looking to purchase a home or condo are likely tracking Maui’s market closely as Covid-19’s impact spreads across the country. The stock market declines started in February. Even though real estate prices have not begun a serious slide, lenders have been tightening underwriting standards making it harder for some buyers to qualify. And with record-breaking layoffs, there is a lack of qualified buyers.

For the last two decades, open-concept floor plans have been a dominant architectural trend. This concept generally joins a kitchen, dining area and living room into a large open space without dividing walls.  Knocking down walls to an open, multipurpose space still tops renovation wish lists for older homes.

Here is part III in our series of investing terms. In this part we cover two key areas for residential real estate investors- owning and renting to others, with key terms for each.

Here is part II in our series of investing terms. In this part we move into the purchasing process, helping you understand the acronyms you may come across. Understanding these terms is important for a this part investing. Of course, if you have any questions, please do not hesitate to reach out to one of our agents!

In our continuing efforts to assist owners in their real estate investing goals, we are publishing a series of investing terms. As you study the market, you may come across many acronyms. Understanding these terms is important for a solid basis of understanding of real estate concepts. Of course, if you have any questions, please do not hesitate to reach out to one of our agents!

When you buy a rental property, your goal is to make money. Real estate investing allows you to gain an ongoing source of passive income as well as long-term appreciation in your property. Over time, you can gradually increase your holdings until you have a thriving real estate business. If you want to gain equity, leverage and passive income, you have to learn how cash flow works.

Real estate can create long-term wealth, and has been a great investment for a lot people. As with any investment, however, it pays to do your homework, especially when you likely will be investing hundreds of the thousands of dollars. While you are going to want to arm yourself with the thorough information here are 10 essential tips when considering your first investment property.

People develop an investment strategy to fit their budget and needs, from saving for a kids college fund or creating residual income while still working, to socking away money for retirement. The stock market is a popular go-to for investors. However, real estate also offers investment potential, and for many people can be a more effective vehicle to accomplish goals, often with lower risk and higher returns under the right circumstances.

Cash flow is important when buying investment property. But there is another benefit to owning rental property that can help in a different way. It involves taking a deduction for capital depreciation on your taxes. Taking full advantage of these deductions can get a little complex, and getting advice from a good CPA is recommended, but we’ll layout basic foundation for you here.

Real estate can be a great investment for the future. However, navigating landlord/tenant law can be a challenge, especially for new real estate investors. A first-time potential homeowner asked about buying a duplex, to live in half and rent the other half to help pay the mortgage. The conversation was a good reminder of the benefits and pitfalls of becoming a landlord, including some outright common myths. Let’s clear up a few common misconceptions for first time landlords.

With a growing economy, something else has been booming on Maui. Over-tourism is the new buzzword, and a sore spot for many long-time residents as they see their island grow and change, and not always in a good way. In addition to overcrowding, promises of high returns lures some property owners to offer unpermitted vacation rentals, one cause of housing shortages for residents.

We don’t have a crystal ball, but there are data sources that help predict what mortgage rates will do in the near future. In review, 2019 was an outstanding year for mortgage rates, and mortgage shoppers can expect to still find great value going into 2020. If you are thinking about purchasing a home or condo, these low rates can offset some of the higher prices we are experiencing on Maui.

Home prices are expected to level off. This is based on two important indicators of home appreciation came out this month, both showing the same thing:  home price increases are slowing rapidly. Economists are forecasting continued slowdowns in appreciation, according to polls by Reuters, Zillow and others.

Calculating Investment Property Capitalization Rate Investing in rental properties can be lucrative, especially if you leverage your financing appropriately. However, do you know how much of that income is really profit?

Leverage in real estate simply means how much money you borrow to finance an investment property compared to the property’s worth. You are “leveraging” other people’s money to maximize your ability to buy more investment properties with less. The higher your leverage, the higher your potential return on investment (ROI).

In trying to battle Maui’s residential housing crisis, the County of Maui recently eased up on some restrictions regarding “accessory dwellings,” or as we call them, ohanas. In addition to potentially creating more long-term rental units, the new law creates opportunities for homeowners or those looking to buy or expand investment properties.

Of the many complaints we hear from property owners with self-managed units, tenants trying to use their deposit as their last month’s rent is common. This can be stressful and create a financial burden for the owner.

Investing in property for long term rentals can be a lucrative real estate investment. However, owning property and dealing with tenants is not without obstacles. There is always a concern of the property being damaged or vacant. Every landlord wants to find “good” tenants. Most owners have at least one story of a tenant breaking a lease.