By Dan Polimino – KW Big Island & The Hawaii Team
If you’re thinking about buying a vacation property in Hawaii and turning it into a short-term rental, the most important question you can ask is: Will it cash flow?
As a self-proclaimed data geek, I believe numbers tell the real story—and I use them to help buyers make informed decisions. Here’s how we do that at The Hawaii Team.
One-Stop Shop for Buying & Managing Vacation Rentals
We’re more than just real estate agents. We help you:
- Find the perfect vacation property
- Get from contract to close
- Manage it professionally through Big Island Stays
But the real magic happens before you make an offer. Every smart investor wants to know what kind of return they can expect—and we build that into our process.
Pro Formas: Know Before You Buy
Before you commit to a property, I’ll prepare a detailed pro forma outlining:
- Operating expenses
- Rental income potential
- Net income projections
This helps you understand what your return on investment might look like, before you spend a dime.
Tools That Power Smart Decisions
We also use third-party tools like AirDNA, which provides real-time data on:
- Occupancy rates
- Average daily rates (ADR)
- Revenue projections for similar properties nearby
For example, a 2-bed, 2-bath unit in Waikoloa Beach showed:
- Projected revenue: $122,000
- Occupancy rate: 80%
- Average daily rate: $422
- Net income: $52,000
Plus, AirDNA reports are accepted by many mortgage lenders—which can help you qualify based on rental income alone.
Conservative vs. Optimistic Projections
While tools like AirDNA provide valuable data, I also run conservative estimates based on:
- Lower nightly rates ($390 vs $422)
- Lower occupancy (62% vs 80%)
In one example:
- Gross revenue: $88,000
- Total operating costs: ~$66,000
- Net income: $22,000
AirDNA may show higher returns, but I prefer to under-promise and over-deliver. The truth likely lies somewhere in between.
The Bottom Line
Whether you’re planning to pay in cash or finance your purchase, knowing the real numbers upfront helps you buy with confidence and peace of mind.
We’re here to guide you through every step of the process—from selecting the right unit to managing it seamlessly. And yes, you can call me directly.
📞 Dan Polimino: (808) 987-3306
🌐 thehawaiiteam.com
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