Time For Honolulu & Waikiki
In Your Real Estate Portfolio?

By Walt Flood
Realtor, Principal Broker, Property Manager
Walt Flood Realty, Honolulu

We find that over the years, prudent investors keep coming back to Hawaii. Many fortunes have been made and lost in the Hawaii real estate market. The late '80's were the boom years when almost any Hawaii investment was sure to create gold. It was not uncommon to hear "He just knocked on my door and offered me $100,000 more than I just paid last month!" or some variation. Then came the inevitable slow down in sales activity and the subsequent price slide. Those who bought at the peak eight years ago have yet to do well. The long downswing has again brought a prime time for investing here.

And in my twenty plus years in the Oahu real estate industry, I have represented many investor clients. They have especially come from the U.S. and Canadian mainland, and an assortment of foreign countries. Investing in vacation or other type of rental property is, for obvious reasons, very popular. From the business standpoint, it gives a 'business' and tax reason to make periodic trips to Hawaii to inspect an owned property and meet with me as the property manager. From the investment standpoint, it gives extraordinary long term potential. From the personal standpoint, it gives the investor and his family, friends or business associates a "condo in Hawaii" when it is reserved or not rented.

In fact, no matter what your real estate taste, if you can afford middle level buy real estate outside of Hawaii, there is something in Hawaii for you. Now, with price decreases of 40% off the peak in some areas of Oahu, investors around the world are again beginning to flock to Hawaii and finding bargain prices. The combination of the lowest prices in ten years and the lowest interest rates in recent memory make the cost of ownership in the islands the best it has been in a very long time. If you have ever wanted to own here, now is the time, by coming or conducting by e-mail.

Keeping track of the recent change in the tax law, you find it has created a good reason for many to sell now (see the Taxpayer's Relief Act Of 1997 allowing couples to take $500,000 in tax free capital gain. Take, for example, the couple who bought their modest home 30 years ago for $40,000, go up in value to $400,000 in 1990, then to $280,000 today. While they might wish they had sold at the peak in 1990, the fact remains that they can sell today and make a $240,000 tax-free profit--a profit they may not have been able to make under the old rule.

Indeed, sellers seeking to take advantage of the new law are one more explanation of why properties are able to sell at prices so much lower than before. We saw many buyers from Japan buying here in the boom times of ten years ago. With the current state of the Japanese economy, we find many of these "boom time buyers" now are "buyer's market sellers" and that they sometimes must sell, right now, and get what remaining equity they have to send or bring back home. There are more sellers than buyers, and well-priced, properties are available now in every category, whether rental or home, condominium or house.

Kauai and Maui have a difficult time competing with Waikiki--because everyone seems to want to include Waikiki in their itinerary. The Rentals Division at Captain Cook & Associates is subdivided into one section serving Long-Term Rentals and one section serving Vacation Rentals. We maintain a sizeable management inventory. You may wish to call me on my toll free (800) 892-7931 to discuss specific rental incomes. However, you may find it useful now to know that our long-term rentals range in monthly income from $600 to $5,000, from Waikiki studios to Diamond Head houses--and we have consistently run at occupancy rates in the high 90 percent range for the past two years. We have had no problem providing good, consistent cash flow for most of our owners. We have monthly reporting, electronic communication, handling the paper work for the excise tax payment, prompt client payment, tenant screening, a sound maintenance program, and exacting check-in and check-out procedures. Bear in mind, State Law requires off-shore owners to have a local property manager.

Interested in our Vacation Rental Program? An acquisition of a rental firm in 1997 increased the Vacation Rental side of our business to thirty units. Waikiki's only beachfront condominium property available for short-term rentals is our primary vacation rental focus--the fabulous and famous "Waikiki Shore" near Fort DeRussy. Of course, "by the nature of the beast," occupancy rates at a short term rental are not as high as in long term rentals--but the rents are much higher to more than make up for that. We rent with rates from $50 for off-beach properties to $300 daily for prime beachfront suites--and yet we are still priced at nearly half of what comparable hotel rooms cost! That makes us very competitive.

Vacation Rentals at Captain Cook has an aggressive marketing program. Once we attract our vacationer, we provide the personal touches that guests often just don't get in the hotels. Our guests seem to notice this (some even praise us for it)--and we make them want come back to us for more next year. Often, a guest doesn’t leave without making their next reservation for the return trip!

And take a moment to look at the bottom line. It goes something like this: now is a good time to be investing in the Hawaii real estate market. If you are in the small group with the resources to do this, we have a seasoned sales staff to show you how the numbers come together, identify and procure for you the best property for sale in your price range, and ensure professional service in the buying process.

Computerized, sophisticated, experienced--we care for your property when you are absent--and turn down the bed for you when you come to stay a while! Call on my toll free line, it would be my honor to get to talk to you!--Aloha Nui Loa, Bob Cook

Want To Know More? Contact Walt at

Walt Flood, Realtor, Principal Broker,
Walt Flood Realty
Honolulu, HI 96816
Toll Free: (800) 892-7931
Telephone: (808) 735-5588
Fax: (808) 737-8733
Old Rustic "Kilohana Square" On Kapahulu Avenue

Captain Cook & Associates Is A Full Service Real Estate Firm Handling
Home & Investment Sales, Long Term Rentals, and Vacation Rentals

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