Benefits of Owning Investment Property on the Big Island
Investing in an income property in Hawaii can be a very lucrative business opportunity. There are countless benefits for investing in real estate property and when it’s in Hawaii, you reap the benefits of owning a property on the beautiful Big Island. There are risk factors to consider when purchasing any property whether it will be for your own personal use or for a rental opportunity.
Here we’ll look at why an investment property on the Big Island can be a lucrative:
You Are Running Your Own Business
Owning an investment property is beneficial and allows you to benefit from your property and have control over the tenants you choose. You set rent and manage the property how you see fit. The best part is, you won’t necessarily have to pay anyone else unless they are helping you with repairs because you are not utilizing employees or staff of any sort. If you are somebody who prefers not to work in a typical nine to five job then an investment property provides you with flexibility and a nice income.
Investing With Others
If you are looking at a large investment in Hawaii and the property is in good shape then you may be dealing with a bit of a high price point. If this is the case, then you may decide to find other investors that you might be interested in an investment opportunity and you can work with them to outline what the responsibilities of each party will be. They may just be the money behind the venture and you will be required to manage the property. You don’t want to invest in a property if you don’t have the money to do so. The debt won’t be worth the opportunity.
Increasing In Value
The great thing about investing in a property on one of the Hawaiian islands is that your investment will be relatively protected for the duration of your ownership. People come to Hawaii for the beautiful weather and the perfect views. This is something that isn’t likely to change any time soon. Many choose to utilize the property as a vacation rental. If you choose to invest in a smaller, more affordable property then you can spend some time and some money repairing the property, updating the exterior and interior and over time, however, it’ almost assured that the value will go up.
If you choose to sell at any point you should be able to make up the money you invested plus a profit. Not to mention, if you make some updates to the property like a bathroom or kitchen remodel you may be able to charge a higher rental price each month to your tenants.
Your Money And How You Control It
Unless you are investing in your rental property with another party, you have the ability to control your money. If you know that your mortgage is $1,500 each month, you can charge $1,800 in rent or more. You are able to pay the mortgage each month and then the remaining money is either profit or it can be used to improve upon the property.
This is an essential way to run your own business and control your income and profit yourself. Keep in mind you need to allot for potentially having a vacant building at one point or another. It may take you some time to find your first tenant since you are new to the renting game. There may also be a few months when one tenant’s lease is up, they decide to leave and then you have a few months of an empty property while you look for someone else to sign a lease and move in. Always be sure to keep some money saved away for emergency repairs or expenses.
Tax Write Off
When your property fits the bill of an investment or rental property (you must be renting for a certain amount of weeks or months each year and cannot be living in the property yourself) then you will have the opportunity to write off a number of expenses when it comes to your taxes each year. You can receive some pretty big breaks this way. All kinds of things like maintenance repair costs, travel expenses and even legal fees can all be written off each year when you file. You may want to use the services of a tax professional who will know all of the different write offs that you can utilize. You will, however, want to read our article on Hawaii’s Conveyance Tax.
There are many benefits associated with the purchase of an investment property on the Hawaiian islands that span wider than just the money you are going to make each month once you have tenants. Since you are working for yourself, you have the option to control your numbers. You can also control your own schedule.
It’s worth mentioning that if you are new to investment property ownership, that It is important to start small. If you find it easy to manage, you may want to consider investing in something else and taking on more properties.
Join the Ranks
Mark Zuckerberg’s real estate transactions grabbed the Big Island headlines in 2017, but there were also a number of other real estate investment stories in 2017 that were of far greater importance to the local population including:
Castle & Cooke’s long-awaited Oahu subdivision got started with branding and staffing changes.
The local favorite was when Dunkin’ Donuts’ made the decision to return to Hawaii.
Other real estate investment news in 2017 included a variety of investment deals as well as businesses opening and closing. There was also a substantial gift of real estate made to the University of Hawaii.
Use a Professional Hawaii Real Estate Agent
You may want to utilize the services of a trusted real estate professional in the Hawaii area. They can help you find properties that you can view and potentially purchase and they will know the in’s and out’s of Hawaiian real estate law and regulations.
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