Do Kona Condos Still Make Money? Honest Breakdown for Investors

Is Buying a Condo in Kona a Smart Investment in 2025? 🤔🌴
The real estate market in West Hawaii is shifting, and many investors are asking: Do Kona condos still make sense as an investment? In this video, we break down real cash flow numbers using current mortgage rates, HOA fees, rental income, and expenses to see if short-term vacation rentals (STRs) or long-term rentals (LTRs) are profitable in today’s market.
📊 What You’ll Learn:
✅ Kona condo market trends in 2025
✅ Short-term vacation rental vs. long-term rental analysis
✅ Real numbers on mortgage costs, HOA fees, and cash flow
✅ Strategies to maximize rental income and minimize risk
✅ How much you need to put down to be cash flow positive
🏡 If you're considering buying a condo in Kona, don’t miss these insights! Plus, if you have questions, drop them in the comments-we’d love to help.
🔔 Subscribe for more Hawaii real estate updates!
📩 Need expert advice? Contact us today!
Travis Green
Loan Officer | NMLS #1383244
970 N Kalaheo Ave. Suite A304
Kailua, HI 96734
M: 808.333.6790
[e-mail]
Julie Ziemelis | RS-85062
📍 REAL Broker
📧 [e-mail]
📞 808-333-1004
🌐 www.365hawaiiliving.com
#KonaRealEstate #HawaiiInvestment #ShortTermRentals #HawaiiCondos #RealEstateInvesting #BigIslandRealEstate #PassiveIncome #HawaiiLife

[@johnsonrepp]

I did the math. After 30 year mortgage with all fees, HOA, tax, and down payment, you will have paid $1,911,000 for a $400,000 property. That math isn’t mathing. Definitely not an investment at all. And that is without accounting for increases in taxes and HOA.

[@poonekar]

And how much income would you have earned as an STR, and how much would it have appreciated in 30 yrs?

[@johnsonrepp]

@poonekar they said $250 a night, at 60%-70% occupancy. That gives a high total of 2k a month profit at best. Assuming inflation and repairs/remodeling over 30yrs, I would say over the 30yrs you might bring in 500k in profit. Bringing the total cost down to around 1.5 million over 30 years that those owner pays for a $400,000 condo. But remember they have to keep a 60%-70% occupancy for 30 years straight. Still a terrible investment.

[@travisgreen1549]

@@johnsonrepp I think you’re double-counting the operating expenses in your analysis. Net income takes into account the expenses, so it’s better to compare gross revenue against gross expenses over the 30 years. So assuming rents never increase and vacancy remains static at 35%, your gross monthly operating income of $4,942 X 360 =$1,779,120.00. Of course if rents go higher (seems reasonable to assume over a 30-year timeline), that gross revenue number goes up. Also, my point in the video isn’t to sell anyone on investing in a condo. Just demonstrating some realistic figures in today’s market. Aloha 🤙

[@poonekar]

@@johnsonrepp I have owned rental properties for over 2 decades, and I have a battle-tested calculator, and the numbers are different for me. I assumed a 65% occupancy but added utilities and Airbnb/Vrbo fees that they didn't in this video. It begins with a negative $145 cashflow (and so I would never do this deal). I, however, assumed a 2.5% increase YOY (which is realistically half of what someone can achieve as they grow the number of positive reviews etc) and 4.5% appreciation (which is atleast 2% lower than other oceanfront legally permitted STRs in Hawaii) and took amortization into consideration. The total expenses after considering inflation over 30y are ~2.25M, but income is ~3.465M, and appreciation is ~1M. That is an overall ~10% ARR. Again, I would never do this deal because I can get that with S&P with much less effort, but it is far better than your numbers.

[@poonekar]

@@travisgreen1549 First off, I loved your content. Secondly, I am an experienced investor, with an oceanfront STR on Ali'i drive and a battle-tested calculator. Here are the numbers I came up with: - I believe you didn't take into account certain expenses like Airbnb/Vrbo fees, utilities etc, but taking that into account, the beginning cashflow would be about negative $145. - Assuming 2.5% appreciation in rental income (which is _way_ too conservative), amortized interest payment without refinancing etc, you would make a net income of a little over 1.2M over 30 years. - Assuming 4.5% appreciation in property value (which is conservative for oceanfront STRs), it would appreciate a little over 1M - Adding the two, over 30 years, you would have an annual rate of return of about 10%, plus the tax benefits. One could get similar results with far less work in the stock market, but if people can't stomach the volatility or want to use the property for enjoyment as well, this is a good example of what is possible.

[@paulhealy7690]

Few things I've learned owning an ocean-front STVR in Kona for the last 5 years: - you can have an annualized vacancy rate of 15%. Periodically need to lower prices when necessary to maintain lower vacancy. Also, better to have someone in the unit if something bad happens like broken pipes (happened to me). - save the 20-25% mgt fee and manage the property yourself (even from the mainland). Just get a reliable maid and handyman. Don't worry, it works out. - don't assume property appreciation will make up for negative cash flow. Ex. if you bought in 2007, you didn't see any appreciation for almost 15 years. If it's an investment, plan on positive cash flow within the first year with 30% down. Once you rack up a reputation on Airbnb during first 6 months, you can raise prices to market rates. - of course mrtg rates at 7.5% instead of 3.5% makes all the difference in the world.

[@poonekar]

Isn't not having a PM on-island a breach of STR rules and regulations? Just hoping you won't get caught? What do you mean you didn't see appreciation for 15 years? Kona's appreciation, especially for oceanfront properties that are legally permitted to run as an STR, has been way above the national average.

[@paulhealy7690]

@@poonekar The on-island property manager can be your maid or your handyman, unless they changed the rules in the last few years. It's just a name of a local that must appear on your permit posted inside of your unit. As for Kona's appreciation, look for yourself at the sales history on Zillow. Prices peaked around 2007, dropped and stagnated through the 20-teens, and didn't break even until 2022. That's a cool 15 years. The point being, invest for positive cash flow first.

[@gladyscreitz4661]

If you are living on the mainland, you need to have someone who is an agent representative for you, living on the island.

[@paulhealy7690]

@@gladyscreitz4661 I used the maid as the on-island agent, as suggested to me by the permitting office. They just want someone available 24/7 if something goes wrong. Maid was never called.

[@gladyscreitz4661]

Good information. We probably need to mention that renting out your room or ohana may increase your home’s property tax ? Is this currently the situation?

[@kirklandappleby109]

Did you include utilities in your monthly expenses. In another video you mention that AC could cost $300 per month.