09/26/2008

Most of Waikiki condominiums were built between 1965 and 1975. In those days Waikiki's nick name was "Crane City".

Time and salt air has been eating away at these buildings which are now 30-40 years old. The majority of these condominiums now have plumbing, electrical, and exterior (spalling) issues. If you are planning on purchasing in Waikiki take the time to research the condition of the building you are interested in buying into. Many of the buildings homeowners associations are proactive and have made sure to keep up with much needed work while others have owners whos only concern is keeping immediate costs down and the building's condition is suffering Eventually the owners will have to foot the bill to rehab the building and, if too much of the work has been deferred the costs could skyrocket.

A big question to ask is, "When was the exterior spalling done on the building?" and if it is still yet to be done are there reserves to cover that huge expense or will there be an assesment? Many condominium owners have upgraded the plumbing and electrical, and A/C in their individual units but what has been done to upgrade the common areas plumbing and electrical, and central A/C? Another question to ask is if there any kind of back-up generator in case the electricity goes out? This is especially important if you are on a higher floor since without backup electricity the water pump will not work and you will be not only without electricity but also without water and of course no elevators.

If you can find a member of the board of directors ask them about building upkeep and deferred maintenance. Another good sourse is the building manager, (if there is one) if he or she has been there awhile to know the building history. If you are in escrow on a condominium make sure to actually read the condominium documents.. especially the minutes of the last several meetings, and the budget and reserves study.

The way to avoid this issue is to buy a unit in a new development with a reputable builder.

Lanikea at Waikiki was completed in 2005. The Watermark was completed in 2008. Trump Tower and Waikiki Allure are still under construction.

Prices are higher in most cases of course but they have all the newest best amenities, newer materials, great kitchens and baths, and being brand new you avoid the huge upkeep bills that a lot of the older buildings are facing. One of the best things in my opinion is the fact that most of these new buildings also have 2 parking spaces with each unit.. nearly unheard of in older buildings.

I highly recommend you look at both types of condominiums before making a final decision.

Next:

What about an older condominium or Hotel that has been given a facelift and is being resold as condominiums? Be Careful!!

Posted By: Jacque Keizer on 09/26/2008 at 12:57 pm with 0 Comments
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09/25/2008

READY_SET_BUY

OK Investors

Ready-Set- Buy

Waikiki condominium prices have very slowly been going down for the last year. The statistics are not always showing that however because several large high end luxury complexes have been completed during the last year which brings up the average prices and while the buyers put their deposits on them often well over a year ago they are just going on the books now as they are completed and the financing is finished.

Moderate and low end condominiums prices seem to have suffered. Waikiki seems to always have a market for really high end buyers and unique properties. Although these high end properties are not appreciating like we are used to in the last several years they do not appear to be declining in Waikiki proper.

It is the under $500,000 properties that seem to be taking a bit of a beating. These are the units I am starting to see investors show interest in. (sucessful investors know that when prices go down and people are panicking that is the time to jump in and buy) I get calls from people wanting to pick up a Waikiki forclosure too. Forclosures are still very few and far between here in downtown Waikiki simply because very few people took out risky loans on their properties. I am starting so see some short sales but the sellers do not seem as desperate here because the rental income in Waikiki is so good that distressed owners can often rent out their unit for a good portion of their mortgage payment. Many owners here are just going to rent out their unit until the market inproves.

I see quite a few condo-hotels available for under $200,000. These can be a wonderful investment for buyers with a strong down payment since the banks usually require 25-35% down on this type of condominium. The rental income from these units can quite often make most (if not all) of your mortgage payment. A big plus with this type of property is the ability to put it in the rental pool and not have to be "hands on" at all with it. The hotel takes care of the day to day operations of renting it out and keeping it clean and stocked for customers. You can call the hotel and reserve the unit for yourself if you or your guests want to use it also. I think they are a great low cost, low risk, low work, investment.

NEXT--- Is Waikiki getting old???

Posted By: Jacque Keizer on 09/25/2008 at 3:02 pm with 0 Comments
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