Hundreds of hotels and Waikiki condos occupy Waikiki, a relatively small area of Honolulu popular with tourists and locals. Thousands of people are in Waikiki on any given day and night, and the neighborhood never truly sleeps.
So what’s the draw?
Waikiki is so eclectic when it comes to its condo population. From full time residents, to vacation owners, investors, and hotel unit owners. There is a real variety. People love Waikiki for many reasons, some of which include access to Waikiki Beach, Waikiki lifestyle, shopping, dining, convenience, price options, and investment options.
Waikiki condos can be broken down into 3 main groups (although there are additional variations of these too.)
- Waikiki Fee Simple Condos- most complete ownership- you own the property and land. Most homes and condos in the US are fee simple. Examples include The Allure, The Watermark, Four Paddle.
- Waikiki Leasehold condos – in a nutshell, you own the property but someone else owns the land. (I can already hear “HUH?” from a few people who have never heard of leasehold ownership.) Leasehold condos are still popular in Waikiki. However, many of them are slowly converting to fee simple ownership. In a leasehold situation, the owner of the condo, has to pay a monthly lease rent to the land owner who owns the land on which the condo building sits. The leases are typically long tern leases of about 55 years, however, depending on how long the lease has already been in place, the remaining years, may be shorter than that. Now, here is the major difference between fee simple and leasehold ownership. While fee simple condo ownership is forever, leasehold ownership may not be. The owner of a leasehold condo can live in and sell the property during the time of the lease, however, once the lease is up, it is up to the land owner to decide if it will be renewed. In some, rare instances, the leases don’t get renewed, and the condo owner has to move out. That’s it. Time is up and it is time to go. Most leases get renewed, BUT….there is never a guarantee. There are many lease variations as well. As mentioned earlier, from time to time, land owners may decide to offer the fee for the land portion. If purchased by the condo owner, the leasehold condo will then convert to fee simple ownership. Discovery Bay is a good example of a popular Waikiki leasehold condo building. Examples of a buildings that have both leasehold and fee simple condos include Canterbury Place, or Waikiki Landmark (although most condos are fee simple in this building.)
- Waikiki Condotels (Fee Simple) – Condotels are fee simple condos within a hotel operation. Condo owners have the option of placing their units into the hotel pool, and to have their properties rented out by the hotel. Examples of a Waikiki condotels include The Ilikai, Ritz Carlton Waikiki, or the Trump Waikiki, but there are others as well. Condotels are good options for people who only want to use their Waikiki condo on a part time basis. Hotels typically charge 50% to manage the condo for the owners. They market the property, collect all the applicable fees and taxes, and take care of reservations and cleaning. Each Waikiki condotel has its own management contract, and the details vary. When purchasing a condotel, it is helpful to see the current owner’s rental statements for the past 12 months. The information will give some insight to how many days the property was rented out for during the year, and what the income potential may be. Condotel units can typically be rented out daily which also makes this type of ownership attractive. In comparison, other Waikiki condos usually have 30 day minimum rental policies in place. I should also mention that financing condotels can be somewhat tricky.
Waikiki wouldn’t be Waikiki without the world famous Waikiki Beach. Hundreds of thousands of visitors visit the beach on a monthly basis, with many repeat visitors who come to Hawaii regularly. If you like a deserted beach type of situation, Waikiki is definitely not it. Waikiki beach is busy and exciting from morning to night. It’s beautiful, and it’s unforgettable. If you’re like millions who enjoy the Waikiki vibe, you will agree that just the thought of Waikiki beach puts a smile on your face. Year round amazing weather, turquoise ocean, and golden sand to dip your feet in. Nothing is as relaxing as spending some time at the beach.
Living in Waikiki, whether part time of full time, comes with excitement. There is never a time in the neighborhood when there is no one around. Tourists occupy this part of Honolulu 365 days a year. This also makes it a fun place to live. The area is vibrant. Stores and restaurants line Kalakaua and Kuhio Avenues. Whether one has a craving for Sushi, Thai, Steak, or Mexican food, it’s all available in Waikiki. The newly redesigned International Market is also not only beautiful, but is an attractive place for shopping and dining. For sport enthusiasts, Waikiki surfing is right off of Waikiki beach, and the Ala Wai Canal is host to various paddling groups. People are up early in Waikiki enjoying their morning coffees by the beach.
The area is simply fun!
Kinga Mills RA, RS-75728
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