Monday, August 8, 2016

Honua Kai Analysis

So I've been working with a broker to analyze some properties in Maui and it looks like we've narrowed it down to some complexes.  The first complex I want to discuss is the famous Honua Kai resort in Ka'anapali Maui.

Honau Kai, in case you don't know, is a premier resort property (4 diamond rated, 4 star) that contains about 600+ condos ranging from studios to 3 bedroom.  Property prices range from about $700K to over $5 million depending on view, size, and amenities.  This property is extremely popular with vacation renters as it has a great location, a beautiful beach, and the resort itself has a ton of amenities such as 3 pools, children's pool, gym/fitness center, and more.  The place is top notch and the service is outstanding at the famous Duke's restaurant which is located on site.  This place is great for couples and for families.

Based on my discussions with Honua Kai management and a few brokers, these properties are great when it comes to occupancy rate.  Almost all of the units are running 80-85% occupancy, with some of them running even at 92-93% occupancy.  That's better than most hotels in the world!  That's the good news.

The bad news is that the financials are pretty tough to work out based on current listing prices.  From my analysis (and I'll get into one in more detail on the next post), returns are a measly 4% when investing ALL CASH.  I don't know about you, but putting $700-800K to get 4% is awfully thin.  You're looking at a lot of chance for error here.

My broker gave me an important piece of information today!  It seems that studios at Honua Kai are the best investments if you can get the purchase price right.  The studios at Honua all offer ocean views and a lot of couples, young families, and singles end up renting these studios because it is the cheapest way to get an ocean view.  He was explaining that since most people don't end up staying in their room much, this is a great way to get into the resort at the lowest price while still having a nice view.

Here is what he told me:
Studio properties at Honua Kai are some of the best cash on cash performers and some of the very best in the state.

The problem is there are no studios for sale!!  The only one on sale doesn't have a very good view from the unit itself and only has a good view once you step outside on a shared lanai (patio).  That doesn't seem very attractive to me and there is a reason why it is the lowest price Honua Kai unit on sale right now.

In any case, I encourage you to check out Honua Kai vacation rentals at or by looking at the official website which is at

Pictures of the resort are below:

What are your thoughts?  Does anyone here own at Honua Kai?  If so, share your experience so I can learn more!

No comments:

Post a Comment