Which island is best for your dream Hawaiian holiday home? Oahu, Big Island and Kauai all have their advantages – but better consider your rental return when you aren’t lounging in paradise

Sep 12 , 2022

Looking for that dream Hawaii holiday home? Read on to learn which islands would suit you best and which attracts tenants for when you aren’t at home in paradise. Photo: Timbers Kauai at Hokuala

Savills say Waikiki in Honolulu, Ko Olina near Kapolei, and Turtle Bay on the North Shore are popular with Asian homebuyers purchasing on Oahu

Hawaii island is for people wanting a real escape in places like Waimea – anyone for a yurt in the mountains? – while Kauai has an ‘authentic’ Hawaiian feel popular with US clients

Who wouldn’t want a holiday home in Hawaii? But economic realities mean that many potential buyers also want to offset the costs by earning some income on their property.

Highlighting this trend, 2018 global research by Savills found that rental returns had overtaken holiday usage as the primary driver for a second home purchase. However, holiday rentals are highly regulated in parts of Hawaii, so if that is your intent, choices may be limited.

Laola Nani town houses kitchen. Photo: Timbers Kaua’i at Hokuala

Oahu: close to all the action

On Oahu, for example, Scott Startsman of HiEstates Team, List Sotheby’s International Realty, said short term rentals are limited to specific areas: Waikiki in Honolulu, Ko Olina near Kapolei, and Turtle Bay on the North Shore.

“Honolulu and Waikiki are iconic, world-renowned places and therefore popular with foreign buyers, especially in the urban core of Honolulu,” he said.

“Investment properties where you can rent it out part time and use it part time are mostly located in this area and will have the highest demand when you go to rent them. So if you want a place you can use and that can cover some of your expenses, then this area is very desirable.”

Startsman said such properties are largely condos, ranging in price from affordable to luxury.

“You can get a condo, lock it up and have very little to worry about,” he said. “We also have a concierge service to check on and maintain your unit for you. We can even restock the refrigerator before your arrival. We manage several hundred units for foreign buyers in the area, mostly from Asia.”

The interior of Moana Pacific West Tower. Photo: Sotheby’s International Realty

One-bedroom studios start at around US$300,000; around US$500,000 for two bedrooms; and around US$600,000 for three bedrooms, Startsman said. Newly built units in the Kakaako and Ala Moana areas, several blocks from the beach, start at around US$600,000 for one bedroom. Close to the beach, he added, the starting price rises to around US$1 million for one-bedroom units.

At the higher end of the current listings, a one-bedroom, two-bathroom condo unit in Trump Tower Waikiki Hotel (asking price US$1.88 million) can be moved into the hotel rental pool when not being used by the owner.