Looking to invest in real estate in Hawaii? With its beautiful beaches, laidback lifestyle and booming tourism industry, Hawaii is an incredibly attractive place for investors. The best city to invest in Hawaii is undoubtedly Honolulu on the island of Oahu. As the state capital and largest city in Hawaii, Honolulu offers many benefits for real estate investors. Its central location with an international airport makes it easily accessible for tourists. The strong job market focused on tourism, tech and healthcare provides a stable foundation. And the limited housing supply coupled with high demand from newcomers drives up property values. When looking at specific neighborhoods in Honolulu, urban Honolulu neighborhoods like Downtown, Waikiki, Ala Moana and Kakaako are great for buying condos to rent out to tourists or professionals. Suburban Honolulu neighborhoods like Mililani, Kapolei and Ewa offer more affordable single-family homes that attract families. For commercial real estate, look to invest in hotel, retail or office spaces in core tourist areas. With its natural beauty and dynamic economy, Honolulu is undoubtedly the best city in Hawaii for real estate investment.
Downtown and Waikiki – Prime Areas Catering to Tourism
The most popular neighborhoods for real estate investment in Honolulu are Downtown and Waikiki along the southern shore of Oahu. These two areas are central hubs for tourism, with countless hotels, shops, restaurants and entertainment all conveniently clustered together. Investors should look to buy condos and apartment buildings to rent out nightly to tourists through platforms like Airbnb. These short-term vacation rentals can provide significantly higher returns than long-term residential leases. In addition, the Downtown and Waikiki markets have very limited housing inventory available, keeping purchase and rental prices high even through economic downturns. Professional tenants like hospital workers or college students also provide a stable rental income source.
Ala Moana and Kakaako – Up-and-Coming Urban Centers
Other highly desirable urban Honolulu neighborhoods for real estate investors are Ala Moana and Kakaako. Ala Moana, situated between Waikiki and Downtown, is home to the world’s largest open-air shopping center. This is a lively mixed-use district with luxury high-rise condos and retail spaces that can generate strong cash flow from rental income. Kakaako is an up-and-coming neighborhood undergoing major redevelopment into a live-work-play community. AsHonolulu’s population continues growing, these well-located neighborhoods will see home values and rents climb higher as housing inventory tightens.
Mililani and Central Oahu – Affordable Family Housing
For those looking to invest in more affordable single-family homes and residential neighborhoods, the suburb of Mililani in Central Oahu is a top choice. Mililani offers relatively cheaper real estate than urban Honolulu but is still conveniently located about a 30 minute drive from downtown. This family-friendly town has highly ranked schools, parks, shopping centers and other suburban amenities that make it appealing to middle-class households. The strong job centers of Mililani Tech Park and Wheeler Army Airfield also give the local economy stability. Investors can target 3 or 4 bedroom Mililani homes to rent out to families transferred to Oahu for military or tech jobs.
Hotel, Retail and Office Spaces in Tourist Areas
Aside from residential real estate, Honolulu also offers lucrative options for commercial real estate investment focused on the tourism industry. Investors should look at hotel properties in the most popular visitor destinations like Waikiki, Turtle Bay, Ko Olina and the North Shore. Retail spaces in core tourist zones can also generate healthy income streams. Additionally, office spaces in Honolulu’s central business districts allow investors to tap into the demand from businesses in tech, healthcare, education and finance.
Strong Fundamentals Support Real Estate Growth
Several compelling fundamentals help support continued price appreciation and cash flow growth for real estate investments in Honolulu. The Hawaiian Islands have very limited land available for development, constraining housing supply. Honolulu also enjoys strong population growth as Hawaii residents from other islands move to Oahu for jobs and mainlanders relocate for the island lifestyle. Furthermore, Hawaii’s economy leans heavily on tourism, military and construction – all sectors that are thriving and bring money into local real estate.
With its position as Hawaii’s economic and population center, Honolulu offers investors the state’s most promising real estate investment opportunities spanning residential rentals, vacation rentals and commercial properties. Focus on the top neighborhoods catering to tourists, professionals and families to take advantage of Honolulu’s high housing demand coupled with limited supply.