Another month has flown by and we are gearing up for the peak summer rental months. Thank you to everyone for your feedback on this newsletter. The response has been lovely and appreciated and it is our goal to continue to provide you up-to-date information on the Hawaii real estate market. So once again, let us delve in:
SHORT TERM RENTALS:
Rather than recap what you already know about the slowing economy, depressed rates, last minute bookings, crazy hotel package deals, etc, I would like to focus this section on what you can do to give your home a competitive edge above the competition:
Professional Photos: You know the saying "A picture speaks 1000 words"? Well, that is absolutely true. We have found a new photographer who does an excellent job at a very attractive price that includes professional photos, interactive floor plan, and virtual tour. Pricing depends on the square footage of your home and I would highly recommend you consider this service. Click on the links below for samples of homes that have already been done. Please contact me if this is a tool you would like to capitalize on:
Hale Malia Paiko
Hale O Keniki
Peace Retreat
LONG TERM RENTALS:
Increased inventory as seller's who have not been able to sell de-list their properties and add then to the rental market. We receive at least a call a week now from homeowners in this situation looking for options.
With increased inventory, we have had several tenants choosing not to renew their leases because they were able to find excellent replacement rentals at lower rents. Examples: $8,500 to $6,000, $9,000 to $6,000 $10,000 to $7,000. These are at the higher end of the scale but even in the $5,000 to $6,000 range we find that the market is very weak.
Time on the market is normally 4-5 weeks. That is now 3-4 months even through the normally busy summer season.
Loosing potential renters who are attracted initially but were able to find something less expensive.
Hawaii unemployment rate has doubled to 6.5% and is the highest it has been in 30 years.
General nervousness in the market.
Military are filling in the slack in some cases but not in the volume we've seen in the past.
Vacation rentals that are normally not competition for long term rentals are slow and being added to available inventory.
What to do?
Lower the asking rent. Some rent is better than none. Rent for shorter term - six months would be acceptable. Even at that it is a matter of waiting, as we are seeing.
We send out bi weekly emails to all Realtors, past tenants, vacation rental agents, and prospects. We will continue to do this as well as keep up our ads in Craigslist, Military, Hon Advertiser and our website presence.
We would recommend investing in professional photos of the property (see the section Professional Photos under the Short Term Rentals section).
Consider This:
Hawaii's legislature recently overrode a veto by Governor Linda Lingle to RAISE taxes, including the Transient Accommodations Tax or the "Hotel Tax". Although this bill has not yet been passed, you should be privy to it's implications for your home(s) as if passed, will take effect July 1:
The state income tax will increase from 8.25 percent to up to 11 percent on single taxpayers who make $150,000 or more a year, heads of households who earn $225,000 or more a year, and couples who make $300,000 or more a year. The tax increase would apply to roughly the top 2.6 percent of state taxpayers and is expected to generate more than $96 million in revenue over the two-year term of the budget.
The transient accommodations tax will go up by 1 percentage point in July — from 7.25 percent to 8.25 percent — and another 1 percentage point in July 2010 — from 8.25 percent to 9.25 percent. The tax increase would apply to operators of hotel rooms, apartments, condominiums, beach houses and other places rented to visitors or local guests. The increase would likely be passed on to consumers and is expected to generate more than $88 million over the two-year budget term.
The conveyance tax on the sale of properties of $2 million or more and on second-home purchases will rise in an effort to generate $8 million in revenue over two years.
Cited from the online edition of the Honolulu Advertiser. For the full article CLICK HERE.
As always, please feel free to contact me should you have any questions on your home. I look forward to hearing from you on having your home professionally photographed with interactive floor plan and virtual tour!
Warm Regards,
Carissa Leonida
Director of Operations
Trinity Properties LLC
Sales, Rentals, and Estate Management
Toll Free (888) 939-0444
Office (808) 247-7521
Direct (808) 673-6800
carissa.leonida@trinityproperties.com
www.trinityproperties.com
