Monday, August 8, 2016

Second property analysis - Waipouli Beach Resort

So after some time at looking at Honua Kai, I decided maybe it might be best to move to a different area in Hawaii to search for better investments.  This time I went to Waipouli Beach Resort which is located in Kauai.  It is also a very high quality, high demand property.  Again, due to restrictions and privacy reasons, I cannot disclose the actual property or unit number.  However, I will declare what the numbers are and my thoughts on them.  

So first, let's go the actual numbers!

    • Vacation Rental History but here is a quick summary
·       ·         2015 - $71,493 (gross revenue), $40,003 (direct deposit)

    • 83.2% occupancy in 2015 (304 / 365 available days)

·   Offering:
    • 2-bedroom / 2-bathroom

  • Specifications
  • Community: Waipouli Beach Resort
  • Living area: 1165 living square feet
  • Bedrooms: 2
  • Bathrooms: 2

So from this number, we can analyze that net proceeds after all expenses are $40,003 after taking into account the property management expense (this property is managed by the on site property management company).  If I disclose the current list price, it would be easy to figure out exactly which unit this is but I will say it is around $700,000.

On the $40,003 number, we still have to deduct property tax, maintenance, electricity, insurance, etc.  That number is basically only the rental room revenue minus the property management fees.  After looking at 2015 expenses, expenses were around $25,000.

That means that net yield on this property is $15000 / 700,000 = 2.14%.  

WOW!  That is horrible.

I am definitely going to pass on this one and see if there is something better on Kauai.

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