Not that anyone would want to sell a home and move away from an island paradise, but sometimes one has to. It can be a necessity and you have to leave an empty home, and yet still pay the mortgage. This scenario can put you into a situation of the seller turned landlord. The sluggish real estate market doesn't help the scenario.
Renting or Time-Sharing
If you are a property owner, and have to move away from the islands, the first thing you need to do is to decide whether you have a landlord mindset. Similarities exist if you are involved in a time share. You should ask yourself the following questions:
How do you feel about someone else living in your home? With a timeshare, they sit on, sleep on, eat off of, bathe in, etc., your stuff. If you cannot handle that, this type of deal might not be for you. If you are faced with a situation, you could replace your things with things that do not mean as much to you. In any case, it is something you should take into consideration or you will not be able to relax a minute during the whole process.
If you are renting your property, you have to feel good about land-lording or island-lording, in the case of Hawaiian property. You will be responsible for carpeting, plumbing, wiring, leaking roofs, broken appliances and weather damage, 24/7. Do you like to, or do you know how to fix things? Does it bother you to screen potential tenants? Trust me, it is a necessity. You can utilize a management company, but you will have to pay for the luxury. If you do it yourself, you have to do it right and fairly, or you are asking for legal trouble. Make sure to always ask for a background check and get previous landlord information.
With either renting or renting to own, you still own the property and there are advantages. In a sluggish market, the solutions are viable as you bide your time until the market turns around. The property, hopefully, appreciates. You get tax breaks. If you have a mortgage, the rental covers that if you have to move away. You can deduct interest and property taxes. You can also deduct advertising, repairs, maintenance, utilities and liability insurance. Again, DO NOT do anything without legal advice, even if the person living in your home is a friend or a relative. You protect not only yourself, but also them..
Renting to own is also a win-win situation. Your people or tenants may be more attentive to the property because it is going to one day be theirs. Again, this too is a legal affair.
Now Hear This!!!
There are people who trash not only hotel rooms, but private homes. They don't pay you, and it can cost you a lot to get them out and they can tie you up in a court battle for years. To avoid this get a security deposit. As an island-lord, you are essentially in business.