Hawaii is a very unique real estate market. We have two main categories of property which are fee simple and leasehold. Another unique type of property which is common in Hawaii is “condotel”. These condominium buildings feature a mixture of residences and transient hotel rooms.
Some of the features that categorize a condo building as a condotel are:
- Front Desk
- Room Service
- Maid Service
- allowance of short term rentals (shorter than 30 days)
- Condotels usually do not have full kitchens
Loans for Condotels:
Most lenders do not make loans on condotels due to their high risk. Some lenders may lend on certain condotels but require high down payments, strong borrower qualifications, and unit specific requirements such as a minimum square footage and a full kitchen. Even then, lender may limit the number of mortgages they fund in any one condotel.
*Every lender is different and it is best to consult with several lenders when looking at purchasing a condotel. Please contact me if you are interested in a condotel unit.