Dude, have you ever been to Hawaii? It is the place to be, it is such an incredible
place to vacation and you might find yourself thinking, I need to own some
real estate in Hawaii. Today, we'll find out if that's true or not.
Alright, friends. Today we're jamming on Hawaii because so many of you want to know,
Kris, should I invest in real estate in Hawaii? And for just a moment, it does
sound a little bit dreamy, doesn't it? I've got my investor romantics that are out there
like, Kris, you know how cool it would be? I could own a piece of property
out there, I could go visit it from time to time when it's not occupied, I can
rent it out, I can Airbnb that thing and Kris, should I invest in real estate in
Hawaii? And you know what, I'm going to tell you right now, I love Hawaii, I've been to
Hawaii many many times and I've been able to visit most of the islands and
what an incredible place in the world to visit, it's truly remarkable
but let's jam on real estate and whether we should be buying real estate there
and let's just start by taking a look at the big picture economic. First of all,
the median home price currently in Hawaii is $610,000
and my first sniff gut check says, is that over the national median in
America? National median, 220 grand. Is it over? Yes, it's triple over which doesn't
mean triple the risk, it means way more than triple the risk.
Last year, the prices went up by over 6% and they're projected this year
to go up by another 5% so right now the growth in those markets are fantastic
because think about it, if you own a $600,000 median size home and it goes up
5%, that's like pocketing $50,000, $60,000
in your pocket of your net worth balance sheet saying, man, I'm
worth 50 grand more today just because I owned a piece of property in Hawaii and
while it's a great destination place, check out the price per square
foot. $580,000 per square foot, makes it one of the most
expensive places in the continental United States to be owning real estate.
Not only that but if you've ever been to Hawaii and you talk with
the locals, you know what they're going to tell you about the cost of living?
They're going to complain about the prices of gas and milk, they're going to complain about
that cost of living and how much extra jobs is like, yeah, I moved to paradise
and I got to work 80 hours a week just to kind of float my basics
and get you know, all my expenses taken care of so it's
interesting that instead of being on island time for many people, it's a
high-stress time and they've got to find a way to become super minimalistic so
that they can make that lifestyle work and don't forget, Hawaii has sharks so
when we talk about is Hawaii really a good place to invest? You know, one of my
number one rules is don't buy over the median because the market will course
correct. In 6% last year, 5% this year,
that's going to equate to some really great growth for yourself that again on a
$600,000 home, you take last year 6 and this 5, you're up
$60,000 that feels really good but what happens when the market
drops 20%? Because they can do it on a dime and the market moves in
cycles and it moves in waves, I think that if you own real estate in Hawaii
for the long haul, it's only going to go up in value but here's my question, can you
make the economics of renting at work because if you don't live there and you
want to rent it out, a lot of this Airbnb does it rent for 30 days a month like
that or even 15 days a month? It can but it depends so I'm not going to tell you
not to do it but I'm going to tell you that you need to really do your homework on
it, you got to really understand how much that can I rent out and am I renting it
to locals or am I renting it to the to the to all the visitors that are coming
there to vacation there? And you got to have a solid business plan with solid
numbers to know that that can work because as much of a dream as that is it,
has a high risk factor and if you show me a home that can work in Hawaii, I can
show you four homes that you can buy on the mainland that'll also work but with
way less risk and way more consistency. Oh, Kris, you're so boring. Oh my gosh.
Where's the fun? Where's the adventure? Where's the joy? Why does it have to be
so boring? You're right. When it comes to money, I like to treat it with respect
and responsibility and respect and responsibility says that I need to find
a way to balance out my risk. Now don't get me wrong, I love risk, risk means I'm
going outside of my 401k comfort zone, IRA comfort zone, I'm going out of my
home equity comfort zone and I realize that no amount of savings and those
tools that are having a hard time competing
average with the rate of inflation will ever get me where I want to go so I'm
going to have to take risks. Here we're talking about smart risks,
here we're talking about risks that have a high likelihood of giving you what you
want and getting you where you want to go. For me, I need to see that there's
growth on the horizon, I want to be in markets where I can see good cash flow
and I want my investment to sustainably be paying me this month. I want to pay me
every month and I want it to pay me on a regular basis and if I'm doing those
things and if I'm doing it correctly then guess what, my real estate's taking
care of me. I don't see that happening in Hawaii
nearly as much as I'm getting it to happen in my other markets so I like to
have the gains with as little risk as possible. Most of the real estate
markets that I'm in I'm getting 15% and 20% annualized returns and Hawaii,
can I find a consistent base of deals that are doing that? I can't.
There's one other reason why Hawaii is a no for me though. I love track record and
I'm not talking about the track record of a home, that's equivalent to all your
eggs in one basket. I'm talking about the equivalent of many homes. When I do my
real estate and I compare my properties and stack them up against each other, the
reality is, they more or less all look the same, they function the same, the ROI's
are the same. That's me taking, having respect for my money and having
responsibility for it. The moment it's like, Oh Kris, there's
this art project, right. There's this unique one-of-a-kind property in Hawaii
one-of-a-kind can equal greater returns, just be aware that it also means greater
risk so if you want to be a professional investor and if you want to mitigate
that risk by putting your money in a lot of different baskets and if you want
to compound that growth, there are a lot better ways of doing that than Hawaii
but you might find this special situation the special circumstance on
the right home that can really work out there for you so ultimately it depends,
it's a no answer for me on Hawaii. Hey, friends. Thanks for checking out that
video. Please comment below on your own thoughts about different markets you
want to know about, places you should maybe consider not consider investing in
and please also check out the playlist right over here so I can share with you
some of the hot markets that I am investing in. Other than that, my friends,
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