Home Selling in Honolulu>Question Details

Jeremy Zumba…, Home Buyer in Kaneohe, HI

Should I sell or rent out my Condo....?

Asked by Jeremy Zumbach, Kaneohe, HI Sun Nov 10, 2013

I own a 2 bedroom 1 bath condo in Kaneohe It is 717 sq foot ground level corner unit with a large Lani. I purchased it in 2011 for $324,000. I currently owe $300k at 3.75%. My monthly mortgage/insurance and taxes come to $1564 a month plus condo fees of $365 which comes to a total of $1929 a month to break even. comparables in my complex rent for about $1800 but include everything that was original in the condo when it was first built in 1988. Mine I have upgraded the kitchen with nice cabinets, stainless steel appliances and granite counter tops. I have also upgraded the bathroom in the same fashion. With upgrades like these can i get a higher rent say $2000 or $2100 or is it dictated by the rest of the market? I was also wondering with the above situation if I should just sell. I could probably sell it for around $380,000 again that is what compairables sell for. Yet they are not upgraded like mine is either so I was also wondering how much extra i could get with these upgrades.

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6
You've done all this work and you are correct. The upgrades will bring a little more in. Jeremy is this your first purchase? Whst are your future plans? I ne honest with you in this market you should be in the positive. Rentals are a whole ball game. I like to speak with you after all the work youve done, you deserve for someone to be honest, and help put you in a positive situation, not just breaking even in this market. As an investor. Let me give you all ypur options and you make the cortect decision for tou. Aloha, Kristi Tanaka Broker in charge. 808-478-4981. Look forward to speaking with you.
0 votes Thank Flag Link Tue Nov 12, 2013
Hi Jeremy,
It sounds like you are talking about Haiku Point - however, the recent sales in the complex have been $345,000; $351,000 and $355,000 - so I'm wondering if $380,000 might be aiming a little high. None of the recent sales were upgraded like yours - so perhaps $380,000 is possible, but the higher you go, the more difficult it will be for an appraisal to come in at the sales price. If the appraisal does not come in it could ruin the sale or put you in a position of lowering the price to complete the sale.
If you are thinking about renting, I do think you could get $2,000 or $2,100 - there's a listing on Craigslist now at $1,950 for a 2 bedroom with 2 parking stalls. Based on other rental listings in the area - I don't think you'd have a problem getting the rent you'd like. Nice Windward properties are always in demand.
If you'd like to work with an agent who knows the Windward side really well - I'm happy to discuss your options with you further. At Home Hawaii does both sales and property management, phone: 381-6848. Aloha, Cindy Siok, R
0 votes Thank Flag Link Mon Nov 11, 2013
Jeremy and anyone else planning to sell, buy or rent please read this message…Contact Cindy Siok. I highly recommend her advice and services. I bought my condo in 2010 and she helped me from beginning to end. Cindy is very knowledgeable, honest, upfront, responsible, professional and always on time! In addition, she found me exactly what I was looking for and exactly what I could afford in a short period of time! The perfect condo for me! When it's time for me to move back to California, I plan to give Cindy a call!
Good luck! Debra
Flag Fri May 23, 2014
There's been some great answers thus far, however if you'd like to chat more about what your options are, the decision is ultimately in your court and I'd be happy to lay out all the pros/cons for you. Every owner is in a different scenario. What my be good for one owner, may not be good for another. There are many variables, with work, lifestyle, financial situation. etc.
0 votes Thank Flag Link Sun Nov 10, 2013
Jeremy,

Yes, it makes sense that any unit with upgrades as you have described should be able to expect increased rental rates.

The problem becomes on of whether or not you really want to become a landlord and accept the risk and responsibility that comes with it. With even a brand new unit, you will encounter issues that will require your attention and money. There's always something.....

The fact that you are asking for input is a good thing....people often enter into these situations without completely understanding what it will mean to them in the long run and have a poor appreciation for what is actually involved.

Keep in mind that being a landlord is more than meets the eye.

Good luck,

Bill
0 votes Thank Flag Link Sun Nov 10, 2013
Aloha Jeremy,

With inventory in Honolulu at its lowest. you should get the best price in your market area. Being a landlord outside the state of Hawaii could be challenging. Look at your options closely before you make a decision.

Mahalo,

Dave Dickey - Realtor® (S)
2013 Aloha ‘Aina Awards Nominee
Hawaii RE License RS-73032
Internet Real Estate Specialist
Century 21 All Islands LLC
2255 Kuhio Avenue Suite:1220
Honolulu, HI 96815 USA
Direct Phone: 808.852.8833
Toll Free: 888.495.0713
http://www.DaveDickey.net
http://www.WaikikiBeachHouse.com
0 votes Thank Flag Link Sun Nov 10, 2013
Hi Jeremy,

Usually if you can rent your home for what you are paying for it, you're doing very well. Between the tax advantages and the principal reduction you're coming out ahead. I guess my main question for you would be, 'Do you want to be a landlord and if so, do you plan to hire someone to manage the property for you or do you plan to do it yourself?'. A property manager usually charges a monthly percentage, 8-12% range, to take care of your property for you. They know the laws that must be adhered to, have a good handle on market value, will market and show the property and then vet applicants as well as take care of any maintenance issues that come up. Doing it yourself can save you money, but invite a lot of stress and headache into your life.

Based on your comps, I would say that you have a good chance of reaching that higher price point because of your upgrades. If you were the renter faced with an upgraded home for $2,100 or a basic home for $1,800, which would you choose? Someone with a strict budget may have to go with the $1,800 option, but I think most people will pay a little more for comfort. The higher price point would absorb the cost of the property manager if you decided to go that way or, if you decide to manage the property yourself, can be saved toward future maintenance and repairs.

If you decide to sell instead, I would say your upgrades would put your price point quite a hit higher then the comps of unimproved units. In this market especially, I would be very aggressive in going after a high price point. Sight unseen and based solely on recent comps of $380,000 for unimproved units I would probably aim for $425,000.

If I can be of any more assistance, please let me know. I both manage and sell on Oahu and I'd be happy to talk to you more about either option.

Catherine Pierce
A House-SOLD Name!
Bob Vieira Realty, LLC
http://www.cathypierce.com
0 votes Thank Flag Link Sun Nov 10, 2013
Aloha Jeremy,
The previous answers did a great job explaining what you can expect with either scenario.
In order to help you decide one way or another, please think about your long-term goals... you didn't say if you are leaving the island and if you currently live in the property. Will you want to occupy the unit within the next 5 years? Keep in mind that if you sell the unit as a non-resident investor, your tax liability will be the highest as you won't get the benefit of the principal residence tax exemption , and may be faced with some capital gain on any appreciated value, plus the HARPTA tax.
Contact me if you have any question!
Monique
Flag Sun Nov 10, 2013
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