Is Maui Real Estate a Good Investment? | #4 in Our Maui Property Ownership FAQ Series

If you’ve been to Maui, you probably won’t be surprised to hear that sources like Conde Nast Travel and Travel + Leisure magazine have repeatedly voted it the best island in the world. But does that make it a good place to own real estate? Here are some points to consider.

Q: What makes Maui so special?

A: The Valley Isle boasts some of the world’s most stunning beaches, a 10,000-foot volcano, rainforests, sea cliffs, lush valleys, and world-class whale watching, water sports, hiking, and golf. It also offers favorable weather conditions year-round, with a wide variety of altitudes and microclimates to choose from.

Maui vacation rentals and resorts have attracted 1.4 million visitors so far this year, which represents a nearly complete post-pandemic rebound to 2019 tourism levels. But many full-time and part-time residents also find the island appealing because it has restaurants, shopping, and other conveniences that make it completely livable, without the hustle-and-bustle feel of Oahu or the mainland.

Q: What are the Maui real estate options?

A: If you’ve done an internet search like “Maui condos for sale” or “Maui homes for sale,” you may already know that you can find anything here from a one-bedroom condo or modest single-family home, to a gentleman’s farm or sprawling estate. Whether you’re thinking oceanfront or upcountry, lively Kihei or remote Hana, there’s a property here to suit your needs.

Over time, we’re continuing to see increases in both nightly rates for vacation rentals and long-term rents on the Valley Isle. As a result, many buyers choose Maui real estate as an option for generating income in the near term. If you’re more focused on a long-term investment, though, you may be especially interested in the next question and answer …

Q: How have Maui property values changed over time?

Maui has experienced record high median sales prices for both single-family homes and condos at several points so far this year. By May 2022, the single-family median home price was up 19% year-over year, and the condo median home price was up nearly 17%. According to data from the REALTORS Association of Maui (RAM), the median single-family home price was still up 15.1% year-over-year by the end of August, and the median price for Maui condos was up a whopping 20.3%.

And actually, this graph from RAM illustrates that Maui home values have been trending up for more than a decade.

historical average sales price by month

Another factor to keep in mind is that Maui has a high percentage of land zoned for agriculture and conservation. As a result of our limited supply of residential property, we’ve seen a downward trend in inventory over time.

historical inventory of homes for sale by month

Given the ongoing combination of high demand for Maui real estate and low inventory, it seems reasonable to expect that home values would continue to increase – or at least remain stable – in the future.

Q: What else should I know about investing in Maui real estate?

A: As I mentioned in my recent blog post about escrow and closing, Maui is home to some of the lowest property taxes in the nation for owner-occupants. And remember that if your Maui property generates rental income, you may enjoy tax deductions relating to mortgage interest, insurance, property taxes, maintenance costs, and depreciation.

I’d love to talk to you in detail about whether Maui property ownership is right for your specific circumstances. Please feel free to contact me anytime!

Leslie Mackenzie Smith, REALTOR(S), RS-42147

More Maui Property Ownership FAQs:

Buying Maui Real Estate: How to Make Sure You’re Ready
Choosing the Best Property Management Option for Your Maui Vacation Rental
Buying Maui Real Estate: What to Expect During Escrow & Closing

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Stephen Pruyn

October 7, 2022

Hi Leslie, I think you should clarify. HI has very low property tax if you are a HI resident. If you are buying with a plan to rent and not live on island, taxes are pretty darn high and if local residents have anything to say about it, will get much higher. Between property tax (especially resort area designation), GET, TAT and now Maui TAT and everything else locals want off island owners to pay, the numbers are getting much harder to pencil on ROI.

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