In part one of this series, I posted how second home shoppers on a budget can realize their Hawaiian dreams for condos in metro Honolulu priced from $200,000 to $400,000. At this price range, sacrifices are needed as buyers balance a property’s geographical location with the individual unit’s location in the building and the size of the unit. In the $200,000-$400,000 range, units were in less desirable (older) buildings with few ocean views and generally sub-600 square feet in size. My favorite was the largest (780 square foot 1-bedroom) for $357,000 with good views and location. It needs a full-renovation, but that’s catnip for me!
This installment, we move upmarket to the $400,000 to $700,000 range. As expected, units will generally be larger with better locations and views.
Literally on Aloha Drive a block off the Ala Wai Canal and a few blocks from the Brady Bunch’s preferred hotel. This 940-square-foot, 2-bedroom, 2-bathroom (Mellon) bank-owned property looks to be in pretty good shape. The listing says it’s been on the market since November 17th, however the listing photos were taken in July, so there’s likely a story here, but also possible opportunity. One gotcha may rest in the $245/month special assessment that a bank may be unwilling to pay off. Otherwise, this 1970 building’s HOAs of $502/month are reasonable and certainly the $1,440 in annual taxes are thrilling by Dallas standards.
Size and views make this 942-square-foot (plus 108-square-foot lanai), 2-bedroom, 1-bathroom 10th floor condo with in-unit laundry a deal. Sure, it’s in 1967 original condition and needs a gut, but for this price, I pun-ingly might call it a “Diamond Head in the rough.” Located smack on the Ala Wai Canal with golf course and mountain views all rooms open to the long (albeit narrow) balcony providing plenty of light and unchanging views. HOA dues of $495 a month and taxes of $1,440 a year. At more than double the size for the same price, I would buy this property all day long versus my next pick.
I don’t recommend Trump Tower Waikiki and use it more as a cautionary tale. Yes, it’s a (well-appointed) hotel room with minimal kitchen functionality in its 418 square feet with no lanai (larger units have full kitchens and lanais). Built in 2009, it’s shiny and relatively new with all the amenities you’d expect from a Trump property. At 445 units (half are studios like this one) operating largely as a hotel, it’s not an intimate property. In the resale market, 30 of the 64 units for sale are also studios. Views are everything in this building with nearly identical studios priced between $445,000 and $980,000.
Also, for the price, the Trump building is about brand cache versus a stellar location. It’s not oceanfront. It’s hemmed in on three sides by other buildings. This leaves only one face with views across a park and onwards to the ocean.
When this building was built, it was a be-all, end-all luxury building that sold out 2006 in a single day. For investment purposes, a cursory comparison between original purchase prices and current listing prices seems to paint more of a picture of investment stagnation versus market-rate growth.
A reason for this may be found in the target market for these units. Ultra-luxury buildings in Hawaii tend to be built specifically for investors, especially Asian investors, to park their money. Many in this group flock to newer buildings as they’re built. This makes reselling more difficult as their prices don’t generally appeal to the broader market of local buyers. There is some evidence for this theory with a high resale rate of 14% of units currently on the market coupled with very long selling periods in a market where condos last just 22 days on the market. No word whether these Trump owners are embarrassed by Mr. Trump’s political views as those in the Chicago Trump Tower.
Another ding on this property are the Dallas-sized property taxes of $8,580/year which are mostly the result of the Trump being classed as a hotel versus a residence. HOAs are $607 a month.
The cheapest fee simple listing on the Gold Coast, is this 445-square-foot co-op condo with 162 square feet of lanai in the Diamond Head Ambassador. While the unit itself isn’t oceanfront, the building is and it has a pool. While not recently renovated, it’s quite serviceable (after the blindingly yellow paint is changed). For those who don’t recall (and haven’t clicked on the link above), the Gold Coast is a grouping of oceanfront buildings built before 1970 at the foot of Diamond Head. The Ambassador was built by renowned Russian born, Japanese speaking architect Vladimir Ossipoff who in 1964 waged a “War on Ugliness” in Honolulu. The Ambassador is a series of low slung Japanese influenced pods with interconnecting bridges. Classic or kitsch, it’s an interesting representative against the boxy buildings of the era. HOA dues of $616 a month are amazingly inclusive of utilities and because it’s a co-op, annual property taxes also!
Zipping back up in size, this 2-bedroom, 2-bathroom condo has 928 square feet with an additional 100-square-foot lanai. This 10th floor unit has views up and down the Ala Wai Canal and a sliver of ocean where it meets the Ala Wai. On the edge of Waikiki, it’s convenient to shopping, restaurants and nightlife without being in the thick of touristy Waikiki. The kitchen and baths are 1970 Plain Jane but in good condition. The building is in the middle of a capital improvement project for the pool deck and party areas and has a $310 per month special assessment to cover the costs (which I would have the seller pay off). HOA fees are $635 per month with taxes of $1,404 a year. The seller of this unit is an estate. To see other units in this building, click here.
This is a wonderfully large 1,270-square-foot, 2-bedroom, 2-bathroom condo with a 280-square-foot wrap around lanai. It also has a gotcha to understand. Originally a leasehold property (where a 3rd party owns the land under the building) the landowner is offering the land fee to individual owners. In this case, a partial conversion has happened reducing the fee buyout to $297,000 … meaning the true cost to purchase this unit as a fee simple condo is $766,000. Alternatively it can be kept as partial leasehold with a monthly payment of $793 in ground rent (which renegotiates in 2019 ultimately expiring in 2051 when you’d have to theoretically abandon the property). For a comparison, unit 12A, converted to fee simple, is also for sale for $729,000. HOAs are steep at $1,384 per month including utilities with property taxes of $2,562 (reflecting fee simple ownership). I’m not advising against this type of sale. I’m advising any buyer to educate themselves.
1558 Monte St., Honolulu
Here’s a single-family home for those with stamina. Located on a valley wall in Upper Kalihi, there are 80 steps to the front door with no car access and no parking on the steep ¾ acre property. The 1962 property is in good shape with the views that come with height.
After climbing a mountain, it’s nice to be rewarded with such views. There are 3-bedrooms with 1.5 bathrooms covering 1,460 square feet. While it would require extensive and costly excavation and groundworks, there is the potential to add to this home or tear it down and rebuild.
Built in 1947, this is likely the oldest condo being featured. This boutique walk-up building was converted from apartments with wood floors, white shaker cabinets and subway tile. It’s similar to the previous column’s Marina Gardens listing except this gentrified complex may have priced itself out of a redevelopment windfall buyout. Unit 401 is a 818 square foot 2-bedroom, 1-bathroom whose biggest asset is its huge open-air terrace. Located along the Ala Wai Canal, owners would get tree-top views. The units have not moved quickly mostly because of the complex’s pricing balanced against its location in a “transitional” area between the Ala Wai and Ala Moana Shopping Center. Click here to see more units and information.
This 568-square-foot, 1-bedroom, ground floor condo is all about location. Located in a pocket neighborhood at the base of Diamond Head across the park from the Gold Coast and its beaches, these small condo buildings (3-story walk-up) have seen prices jump in recent years. If you have a green thumb, this ground floor unit offers a rare 92 square feet of patio/garden area. The 1961 complex has a pool and the unit has new cabinetry and appliances. HOA dues are a reasonable $330 per month with annual taxes of $1,132.
Two-bedroom, 2-baths in 1,024 square feet including a generous 168-square-foot lanai that stretches the length of the unit … and what a lanai. More wonderful views up the Ala Wai Canal and golf course up to the mountains. What’s great about these buildings along the Ala Wai Canal are the protected views (the canal and golf course aren’t going anywhere). The unit has been renovated to a mid-grade standard and includes a washer/dryer in the unit. Any noise from Ala Wai Boulevard are dulled by this unit’s 18th floor location. HOA dues are $644 per month with an ongoing $217 per month special assessment (that I’d make the seller pay) and annual taxes of $1,320.
On the edge of downtown Honolulu, this newly renovated 3-bedroom, 2-bath unit spans 1,198 square feet with an 8-foot deep, 158-square-foot lanai. It’s close to everything non-touristy with a Safeway on the same block and my favorite dim sum restaurant and lei stands just blocks away. Definitely move-in ready with in-unit washer/dryer and urban views. Unique complex occupies a city block with a 2.6 acre park built on the 3rd and 4th levels. HOA dues are $792 per month with annual taxes of $1,560. There is still a land lease to pay off, but the seller has begun the process and it appears to be sub-$10,000.
Several featured units in this series have been located on the Ala Wai Canal looking outwards towards the mountains. This 2-bedroom, 2-bathroom, 1,071-square-foot unit is on the opposite side of the canal looking back at Waikiki and the ocean beyond from a 135-square-foot lanai. This complex was built in 1971 and this unit shows it. Aside from new paint and carpet, it’s all original cabinetry, appliances and fixtures. The complex has extensive grounds and amenities like a pool, sauna, tennis court, putting green, basketball/volleyball court, car wash and BBQ. HOA fees of $734 monthly and annual property taxes of $2,028. For those up for a little more work, unit 3114 with the same floor plan and renovated in 2008 is available as a leasehold for $393,900 with land fee purchase of $208,000 for a total of $602,010. (All prices before heavy negotiations, of course. But for views 11 stories higher and less money, why not?)
To Gilligan’s Island aficionados, views from the ocean side of the Ilikai Marina will look familiar as the place the SS Minnow set sail for their ill-fated 3-hour tour. The building is also located next door to the Ilikai Condos and hotel where Jack Lord stood in the opening credits of the original (and better) Hawaii 5-0. History aside, this Marina unit is just 651 square feet but it’s (finally) an oceanfront property (for under $1-million). HOA dues are $717 per month and taxes are a whopping $7,236.
Currently there are 9 units of the same size and views on various floors listed with prices ranging from $495,000 (unit 384) to this unit’s $635,000. Some units show property taxes of around $1,800 a year and some are like this one with huge taxes.
Maureen O’Guin from Carvill Sotheby’s, representing unit 384, said that price is usually dependent on seller motivation and buyer desire … so strike a good deal! The tax situation was also easily explained as the building being re-categorized as a hotel property eliciting the higher taxes (like Trump). The units with the lower tax rate she said have not updated their listings since the change took place. More reasons to have knowledgeable agents.
Located on the other side of the Ala Wai Canal from Waikiki, this unit offers panoramic views of Diamond Head. With 2-bedrooms and 2-baths spread over 1,460 square feet with 100 square feet of lanai, this is a generously-sized unit. For those wanting more outdoor space, a 234-square-foot lanai has been enclosed but can be restored. Kitchens and baths have been renovated to a mid-tier standard. Building is located in a very “local” area near universities with grocery stores, shopping and restaurants nearby. HOA dues are $843 per month with $1,548 in annual taxes.
Adjacent to downtown Honolulu, it’s foreclosure for this 8th-floor, 2-bedroom, 2-bathroom unit offering 1,470 square feet and 155 square feet of lanai in the Mauka tower of One Waterfront built in 1989. Décor is original 1989 with all the associated bad wallpaper and melamine cabinets – which can all be fixed. Originally constructed in a residential no-mans-land, what can’t be fixed now are the views that now face blockage from new construction. It’s a full amenity building in an increasingly redeveloping (and tony) area. HOA fees of $1,311 per month with $2,256 in taxes annually. To avoid a construction blockage, go up. But the same unit on the 30th floor is currently listed for $888,000, but the “bargain” is a 1,732-square-foot unit on the 37th floor with stunning ocean views for $889.000.
Hopefully this roundup of the mid-hundred thousands offers a slice of what your money will purchase. As you can see, price continues to be bound by location, location, and size. You can get well-sized condos in this price range, but the larger the unit, the less desirable the locations or you can give up on size and get better locations. Finally, with all purchases, buyers must check all the variables of ownership and return on investment. Hawaii has different forms of ownership that are not well-understood nor popular in Dallas. Serious buyers must be educated buyers.
Next installment will feature properties from $700,000 to $1-million.
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