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Investment at Islander on the Beach?

Ann Arbor, Michigan
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296 posts
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Investment at Islander on the Beach?

My wife and I have been thinking about purchasing a condo/hotel room at the Islander on the Beach as an investment for some time. You can find them in from $220K-$300K depending on the view.

Are there a lot of 'hidden' fees? I know there is about a $700/mth maintenance fee to cover utilities and maintenance but doe's this usually cover the taxes too?

The Islander is very nice and it seems to do well in the rental pool?

Doe's anyone have firsthand experience?

California
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36,470 posts
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1. Re: Investment at Islander on the Beach?

Taxes are not covered in maintenance fees.

I know someone who owns 2 places at Islander. PM me and I can give you his email. I know he has one for sale. The management company at Islander takes a large percentage of rental receipts and has many restrictions on renting the unit yourself. Again private message me if you need more information.

PS Something else to think about. Banks do NOT like to lend for condo/hotels. You need a lot down. I just got something in the mail yesterday, though, from a lender who didn't do loans to condo/hotels but they have started now. There are so many of them I suppose they realized there was a need, but again you will have to shop hard.

laguna niguel, ca
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2. Re: Investment at Islander on the Beach?

we own a resortquest on another island, if they are in the hotel pool, resortquest does all the work and takes out substantial fees for advertising, front desk etc, or you can buy one not in the rental pool and do it yourself. Sellers seem reluctant to release the numbers until you are a serious buyer. As stated you will need about 30-35% down payment. There are also property taxes and hotel 11% taxes. Of course the biggest expense is the friends and family free trips.

I don't think you can buy anything that will be cash positive initially, but buy it when you are working so it will be set up when you retire. My opinion is Hawaii real estate is still undervalued, if it is a location you enjoy. They don't build much and when they do they are not cheap, to get an oceanfront condo at the price is a great deal.

California
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3. Re: Investment at Islander on the Beach?

longboard said " Of course the biggest expense is the friends and family free trips."

I give discounts to friends and family but no freebies. I just can't afford that. I wish I could but not with mortgage, maintenance fees, taxes, upkeep. Ouch.

Ann Arbor, Michigan
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4. Re: Investment at Islander on the Beach?

"I don't think you can buy anything that will be cash positive initially, but buy it when you are working so it will be set up when you retire. My opinion is Hawaii real estate is still undervalued, if it is a location you enjoy. They don't build much and when they do they are not cheap, to get an oceanfront condo at the price is a great deal."

We love to travel to Kauai and are looking at the investment for the long term. Even to break even would be worth it!

pzp
Kauai, Hawaii
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for Kauai, Kapaa
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5. Re: Investment at Islander on the Beach?

We looked at investing in Islander pre-offer. Bad idea if you're looking to cover your expenses by renting. The numbers just don't work. $700/mo is $8400/year; you can do lots of 2-week vacations at nice places for that kind of money. Management fees are 50% of rent, as I recall; it would be almost impossible to manage rentals yourself from MI. Good cash flow also depends on 100% occupancy, which, IME, you'll NEVER achieve.

A lot of people thought they'd flip these; most lost big $$.

Palm Springs...
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6. Re: Investment at Islander on the Beach?

tourism is down 15 to 20 %.....good luck and prices are continuing to decline state wide

Being a non resident you will Pay 1.55% property tax rate. Your $700 covers ONLY the condo maint,

You still have the resort Assocation, electric, phone, TV. insurance to pay...and routine maintance your self..... Beds furnature, TV, stero, AC, Refer, Plumbing, carpet, etc

You have to get a loan from a broker here in hawaii... not where you live.....seocifi "condo Hotel" expect loan rates 2 to 3% higher than on the mainland.

NO..... I sold a condo 2 years ago... its now back on the market for $50K less than I sold it for....

If you need a tax loss.....go for it.. you will not make money....

California
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7. Re: Investment at Islander on the Beach?

"You have to get a loan from a broker here in hawaii... not where you live.....seocifi "condo Hotel" expect loan rates 2 to 3% higher than on the mainland."

Not true. We got a loan through B of A in California. Rate was not higher.

laguna niguel, ca
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8. Re: Investment at Islander on the Beach?

I would not recommend a short term quick buck, and understand it is an investment that will require money every month. But the upside is that Hawaii is done building oceanfront condos that close to the water, no more, and if someone has the connections to get one approved they will start at about 2 million and have a sign outfront that says Westin or Hyatt. Add to that all the baby boomers who are close to retirement age, who would love a Kauai oceanfront, and the long term looks pretty good to me.

9. Re: Investment at Islander on the Beach?

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