Introduction

Investing in rental properties can be a lucrative venture, offering steady income and long-term financial growth. However, the success of a rental property investment largely depends on the location. A good rental property is situated in an area with high demand, offers convenient access to amenities, and provides a unique appeal that attracts tenants and tourists alike. Hawaii County, HI, with its diverse landscapes, rich cultural heritage, and booming tourism industry, presents a promising opportunity for rental property investors. This guide will explore the best neighborhoods and areas in Hawaii County, evaluating them based on convenience, tourist attractions, things to do, average home prices, return on investment, proximity to work-related travel, and the unique 'x-factor' each area offers.

Best Neighborhoods and Areas in Hawaii County, HI

1. Hilo

Grades:

• Convenience: A
• Tourist Attractions: B
• Things to Do: A
• Avg Home Prices: B
• Return on Investment: A
• Proximity to Work-Related Travel: A
• X-Factor: A

Convenience: Hilo, the largest city in Hawaii County, offers excellent convenience with its well-developed infrastructure, including schools, hospitals, shopping centers, and public transportation. It is also home to the Hilo International Airport, making travel easy for residents and visitors.

Tourist Attractions: While Hilo is not as tourist-heavy as Kona, it boasts attractions like Rainbow Falls, the Pacific Tsunami Museum, and Liliuokalani Gardens. Its natural beauty and cultural sites attract a steady stream of visitors year-round.

Things to Do: Residents and tourists can enjoy a variety of activities, including hiking, visiting farmers' markets, exploring the Hilo Art Museum, and attending local festivals. The town’s vibrant community and frequent events provide ample entertainment options.

Avg Home Prices: The average home price in Hilo is relatively affordable compared to other areas in Hawaii, making it an attractive option for investors.

Return on Investment: Hilo offers a strong return on investment due to its affordability, steady demand for rental properties, and lower vacancy rates.

Proximity to Work-Related Travel: Hilo's proximity to the airport, major highways, and business centers makes it convenient for work-related travel. The presence of the University of Hawaii at Hilo and Hilo Medical Center also contributes to the demand for rental properties.

X-Factor: Hilo's unique blend of natural beauty, cultural richness, and affordability makes it a desirable location for both residents and tourists.

2. Kailua-Kona

Grades:

• Convenience: B
• Tourist Attractions: A
• Things to Do: A
• Avg Home Prices: C
• Return on Investment: B
• Proximity to Work-Related Travel: B
• X-Factor: A

Convenience: Kailua-Kona, known simply as Kona, offers good convenience with numerous amenities, including shopping centers, restaurants, and schools. The area is well-connected by roads, though public transportation is less extensive than in Hilo.

Tourist Attractions: Kona is a major tourist hub, known for its beautiful beaches, historic sites, and coffee farms. Attractions like the Kaloko-Honokohau National Historical Park and the Kailua Pier draw tourists year-round.

Things to Do: From snorkeling and diving to exploring historic landmarks and enjoying local cuisine, Kona offers a plethora of activities. The Ironman World Championship held here annually adds to its appeal.

Avg Home Prices: Home prices in Kona are higher than in Hilo, reflecting its popularity and desirability. This can be a barrier for some investors but also indicates potential for high returns.

Return on Investment: Despite higher home prices, Kona offers a good return on investment due to its high demand for vacation rentals and relatively low vacancy rates.

Proximity to Work-Related Travel: Kona International Airport provides easy access for work-related travel. However, the area is more tourist-focused, which may limit some business opportunities.

X-Factor: Kona's world-renowned coffee, stunning beaches, and vibrant community make it a unique and highly desirable location for rental properties.

3. Waimea (Kamuela)

Grades:

• Convenience: B
• Tourist Attractions: B
• Things to Do: B
• Avg Home Prices: C
• Return on Investment: B
• Proximity to Work-Related Travel: C
• X-Factor: B

Convenience: Waimea, also known as Kamuela, offers good convenience with its local amenities, including shops, restaurants, and schools. It has a more rural feel compared to Hilo and Kona, but still provides necessary services.

Tourist Attractions: Waimea is less tourist-focused but offers attractions like the Parker Ranch, one of the largest cattle ranches in the U.S., and beautiful scenic drives.

Things to Do: Activities in Waimea include exploring ranch lands, hiking, and enjoying local farmers' markets. The town also hosts cultural events and festivals.

Avg Home Prices: Home prices in Waimea are on the higher side, similar to Kona. This reflects its desirability as a rural, scenic location with a close-knit community.

Return on Investment: The return on investment in Waimea can be strong due to its appeal to those seeking a quieter, rural lifestyle. However, higher home prices can impact overall returns.

Proximity to Work-Related Travel: Waimea's rural location means it's less convenient for frequent work-related travel. The nearest major airport is in Kona, about an hour away by car.

X-Factor: Waimea's unique appeal lies in its rural charm, ranching heritage, and scenic beauty, attracting those looking for a quieter, more laid-back lifestyle.

4. Puna District

Grades:

• Convenience: C
• Tourist Attractions: B
• Things to Do: B
• Avg Home Prices: A
• Return on Investment: B
• Proximity to Work-Related Travel: C
• X-Factor: B

Convenience: The Puna District offers limited convenience with fewer amenities and services compared to Hilo and Kona. However, its growing infrastructure is gradually improving.

Tourist Attractions: Puna is known for its unique natural attractions like the Kapoho Tide Pools and the Lava Tree State Monument. It's less crowded than other areas, appealing to those seeking solitude and natural beauty.

Things to Do: Activities in Puna include exploring volcanic landscapes, hot springs, and coastal areas. The district also hosts local markets and cultural events.

Avg Home Prices: The Puna District offers some of the most affordable home prices in Hawaii County, making it attractive for investors looking for lower entry costs.

Return on Investment: With affordable home prices and growing demand, Puna can offer a good return on investment. However, the area's development and infrastructure limitations should be considered.

Proximity to Work-Related Travel: Puna's remote location makes it less ideal for frequent work-related travel. The nearest airport is in Hilo, requiring a longer commute.

X-Factor: Puna's unique volcanic landscapes, hot springs, and affordable real estate make it a desirable location for those seeking natural beauty and lower living costs.

Conclusion

Investing in rental properties in Hawaii County, HI, offers diverse opportunities across various neighborhoods and areas. From the convenient and culturally rich Hilo to the tourist-heavy and vibrant Kona, each location presents unique advantages and challenges. By carefully considering factors such as convenience, tourist attractions, things to do, average home prices, return on investment, proximity to work-related travel, and the unique 'x-factor' of each area, investors can unlock the full potential of their rental property investments in this beautiful part of Hawaii.