Hundreds of miles of gorgeous beaches and innumerable activities make Maui not only a prime tourist destination, but also a desirable location to buy a second home. Potential buyers are often seeking an income property to help offset vacation costs. Although there is still an abundance of visitors renting affordable housing for their vacations, there are many factors to consider before making a purchase on this Hawaiian island.
Real estate values on Maui continue to appreciate, while the cost of booking a vacation home or condo has not risen to nearly the same degree. This means that generally speaking, unless you can afford a down payment of 50 percent or more, it is very hard to make a profit from a rental property. In fact, it is extremely unlikely you will break even. It is not uncommon for a one-bedroom condo with an ocean view to sell for upwards of $500,000, while most Maui condo rentals can be booked for as little as $100 per night - and that is only on the nights they are booked. Condo maintenance fees, property taxes, maintenance and renovations are additional income busters.
Although it is possible to manage the property on your own, hiring a Maui property management company will also be a necessity for most rental owners, and will further cut into your profits. Management companies on the island typically charge 20 percent to 50 percent of the rental income. The larger, more expensive companies will promise a stronger marketing presence, and therefore higher occupancy rates, while the less expensive agencies tend to struggle more with consistently booking rentals and may charge extra for cleaning and other services. Even if you forgo a management company, cleaning and maintenance crews will still have to be hired, and a marketing strategy must be developed to assure the unit is full as often as possible.
Potential buyers need to do their own due diligence. The condo you want to buy may not be zoned for vacation rental usage, for example. In fact, many Maui condos are strictly owner-occupied and prohibit short-term tenants. Finding a home that allows short-term occupancy may be even more difficult. Location and amenities are other features that will determine how frequently a unit is rented, as well as the maximum nightly charge.
Despite the potential pitfalls, buying an investment property on Maui can be a wonderful thing for those that can afford a large down payment or can offset any shortages. The advantages to owning a home on this island are plentiful: outdoor adventures such as parasailing, snorkeling and zip line rides, amazing beaches, waterfalls, rainforests, and rare, indigenous wildlife are all natural draws to the island. Cocktail cruises and luaus are additional activities that await you and your guests, should you decide to take the leap into purchasing Maui real estate.
Author Resource:-
Stephen Daniels is an acclaimed NetBiz SEO 2.0 researcher. If you are interested in buying or renting luxurious Maui vacation rentals, he highly recommends Sullivan Properties. With over 20 years of experience, their short- and long-term condo rentals provide the comforts of home right in the middle of paradise.
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