What is Maui Luxury Real Estate & Why Should I Invest? - Sakamoto Properties

What is Maui Luxury Real Estate & Why Should I Invest?

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May 27, 2022

Maui is one of the most visited islands in Hawaii because of its golden sands and beaches, beautiful lush valleys, unbeatable landscape, incredible food, and fantastic culture. On top of that, investors looking for real estate properties also consider Maui as the place to purchase lands and homes as they have high tangible asset value.

Real estate is one of the best investment options as you can leverage it to grow your wealth, enjoy high rates of return, and get incredible tax benefits. If you’re planning on investing in real estate in Maui, continue reading this article.

What is Maui real estate?

Contrary to popular belief, having a stellar financial record isn’t the only factor when making investments. You also need to conduct proper research and preparation before owning real estate properties and enjoying their benefits. To sort this research requirement out, we’ve rounded up the factors you should consider before investing in Maui luxury real estate:

Median prices

The median price for single-family homes in Maui rose to $1,160,000 at the beginning of the year. According to data from the Realtors Association of Maui, the record to beat was that in June 2020, when they hit the $1,105,000 price mark. With this, home prices have increased by 18.4% from January 2021 until this year. Wailuku, Makawao, and Kihei are three key market areas that have seen tremendous property appreciation in recent months.

On the other hand, condos in Maui’s resort areas sold as quickly as they were listed, even if the median price has increased by 27% since January of last year. With that said, Kihei, Māʻalaea, and Lahaina condos were all sold in less than three months.

Maui real estate areas

Maui is a small island, but its climate and the personalities of its various communities are diverse, so most investors prefer to purchase real estate properties on the island. If you want to enjoy a Hawaiian tropical garden with stunning views of lush mountains, beautiful beaches, and breathtaking sunsets, you consider real estate in West Maui. The area offers multi-million dollar homes in exclusive communities with lavish resort amenities that include five-star spas, shopping centers, and delicious restaurants, to name a few.

If you want to settle on the quieter side of West Maui, check out Kapalua’s luxury condos, vacant land, and luxury mansions. You can feast your eyes on the lovely Pacific Ocean and catch Humpback whales giving performances. Kaanapali also offers a relaxing coastal lifestyle with watersports activities you can enjoy, so owning a place there is highly recommended. On top of that, you can buy oceanfront or beachfront properties with uniquely designed floor plans in West Maui to maximize the Hawaiian lifestyle.

Why should I invest in real estate?

Investing in real estate is proven to produce tangible benefits. However, it is crucial to conduct proper research before investing to ensure success. Following are the benefits you could enjoy if you invest in Maui’s luxury real estate properties.

●     Real estate keeps pace with inflation

It is natural for the prices of real estate properties to increase over time. That said, the loan-to-value of any mortgage debt is low and acts as a natural discount. Your property’s equity grows while your fixed-rate mortgage payments remain unchanged. You can leverage inflation if you allow your property to be rented out. For instance, if you own short-term lease structures such as a multi-family property, you can raise your rent while keeping your mortgage unchanged, increasing your overall income.

●     Maui homes are likely to appreciate over the years

As a real estate investor, home appreciation is an advantage as the value of your property increases over time. With this, you can enjoy an increase in your monthly earnings. It is also wise for an investor looking to increase the value of their property to make a few home improvements, including remodeling your kitchen, upgrading bathroom utilities, and replacing windows. With this, you can attract tenants to rent out your property and generate a passive income.

●     Rental income from your property can provide a cash flow

Rent cash flow is the profit made after expenses such as insurance, utilities, taxes, debts, and wear and tear have been deducted. You know you are getting positive cash flow when you make more income than expenses.

●     Tax deductions are present

There are numerous benefits that real estate investing can provide around tax time. For instance, you can write off deductions tied to the operation, maintenance, and management, such as mortgage interest, property taxes, insurance, management fees, and repair costs.

It’s highly recommended to talk with your tax advisor to get guidance on what expenses can be written off.

●     You are financially secure

Investing may be risky, especially when you don’t think about the long-term goal. It’s critical to build an investment strategy that’ll help you understand risk tolerance and risk management. It is important to think about what will happen in the long run in real estate. What’s good about investing in real estate properties is that you know you’re getting a rising asset.

The property may go through ups and downs, but it usually recovers if you hang on to it long enough. Some investors purchase real estate to supplement their retirement income. Regardless of whether you own the property, earn monthly rental cash flow, or sell a property, it is guaranteed that it increases your retirement income. With this, most investors see that it is safer and more rewarding to invest in real estate, as it is a tangible asset and provides a steady income.

Invest in Maui real estate now

Before investing in Maui’s luxury real estate, it is crucial to assess if the properties have all the amenities and conveniences most homeowners want. Additionally, you must also consider the factors mentioned above, including the median prices and real estate areas, to help you find the right property.

Maui is known to be a good place where investors can purchase real estate properties, so before you make your purchase final, contact us today to ensure that you get the property that fits your liking.

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