1909 Ala Wai Blvd APT 1003, Honolulu, HI 96815 — 27.7% Cash-on-Cash

About this property

This 513-square-foot, one-bedroom condo at Royal Aloha sits on the 10th floor of one of Waikiki's rare resort-zoned buildings — a designation that legally permits short-term daily rentals.

What separates this unit from the broader Waikiki condo inventory is the building's resort zoning. Short-term vacation rentals are increasingly restricted across Honolulu, making legal STR-permitted buildings a shrinking category. Royal Aloha is one of them, and this particular unit — a one-bedroom in a building dominated by two-bedroom layouts — offers a lower entry price into that permission structure.

The unit comes turnkey, with a full kitchen and a layout described as guest-ready, which matters for investors who want to avoid a renovation cycle before generating income. On-site management, a pool, BBQ area, and secured access are all in place. Community laundry is available on each floor.

The critical disclosure: this is a leasehold property with approximately 15 years remaining on the land lease. That clock is the primary reason the listing price sits at $185,000 while fee-simple one-bedrooms in the same zip trade well above $300,000. At 173 days on market, the leasehold structure has clearly narrowed the buyer pool — which is exactly why the yield numbers look the way they do. The tax-assessed value is $355,500, meaning the property is listed at roughly 52 cents on the assessed dollar.

The investment case

A 27.7% cash-on-cash return is the highest figure in ZIP 96815, where the zip average sits at 12.4% — and the math behind it is straightforward once you account for the leasehold discount on entry price.

List Price

$185,000

Monthly Payment (PITI+HOA)

$1,724

Principal & Interest

$1,023

Property Tax

$43

Insurance

$62

HOA

$596

PMI

$0

Est. Monthly Rent

$2,577

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

27.7%

Cap Rate

12.4%

Monthly Cash Flow

$853

Gross Rent Multiplier

6.0

DSCR

1.9

The purchase price of $185,000 at 20% down means a $37,000 down payment. At a 6.43% 30-year fixed rate, principal and interest runs $1,023 per month. Add property tax at $43, insurance at $62, and HOA fees at $596, and total monthly outlay lands at $1,724. Estimated monthly rent of $2,577 produces a cash flow of $853 — positive, and meaningfully so.

The HOA fee of $596 is the single largest line item after debt service, and it deserves attention. It's not unusual for resort-managed buildings with pools, on-site staff, and amenities to carry fees in this range, but it does mean any vacancy or rate compression hits cash flow faster than it would in a lower-fee building.

The cap rate of 12.4% and a net operating income of $1,919 per month reflect a debt-service coverage ratio of 1.9 — nearly double the coverage a lender typically requires. The gross rent multiplier of 6.0 is aggressive by any standard; most income properties in high-cost markets trade at GRMs of 15 or higher. That compression is entirely a function of the leasehold discount.

The city average cash-on-cash return is 0.0%, which frames this deal sharply. Honolulu is not a cash-flow market in the conventional sense. This property is an exception, not a representative sample. Figures exclude depreciation tax benefits, which vary by individual tax situation.

Annual return outlook

The 5-year total ROI projection of 38.9% is driven primarily by cash flow, with appreciation and mortgage paydown as secondary contributors.

Cash flow contributes 27.7 percentage points of that 38.9% total — the dominant component by a wide margin. Mortgage paydown adds another 7.5 points over five years as the loan balance reduces. Appreciation contributes an estimated 3.8 points annually, though that figure is an estimate rather than a market-derived data point, and should be treated accordingly.

The appreciation angle carries a specific complication here: leasehold properties don't appreciate the way fee-simple properties do. As the lease term shortens, the resale market for the unit typically contracts. A buyer acquiring this property today with 15 years remaining will be selling into a pool of buyers who have 10 years remaining — a shorter horizon that generally compresses resale value rather than expanding it. The 3.8% annual appreciation estimate may not apply to this asset class in the way it would to a fee-simple condo nearby.

That reframes the investment thesis: this is primarily a cash-flow play, not an appreciation play. The 27.7% CoC and $853 monthly cash flow are the real return drivers. Investors who need the appreciation leg to make their numbers work should stress-test that assumption carefully given the leasehold clock.

Over five years, cash flow and mortgage paydown do the work here. Appreciation is a bonus at best, and a risk factor at worst given the leasehold structure.

How it compares to nearby for-sale listings

Five active one-bedroom listings in ZIP 96815 provide a price context for this unit — and the gap between this property and its peers is stark.

The for-sale comp median in the zip is $565,000. At $185,000, this property is priced at roughly 33% of that median. The closest comp by price is a 522-square-foot unit at 2118 Kuhio Ave listed at $389,000 — still more than twice the ask here. On a price-per-square-foot basis, this property at $185,000 across 513 square feet comes to approximately $361 per square foot. The 413-square-foot unit at 2211 Ala Wai is listed at $345,000, or roughly $835 per square foot. The spread is not a market inefficiency — it's the leasehold discount doing exactly what it's supposed to do.

The comp listings have all been on market for under 10 days, which contrasts with this property's 173 days. That extended market time is informative: fee-simple inventory in the zip moves quickly, while this leasehold unit has sat. Buyers who understand the leasehold structure and are optimizing for yield rather than resale optionality are the relevant audience, and that's a narrower pool.

The tax-assessed value of $355,500 against a $185,000 ask is another reference point. Assessed value doesn't equal market value, but the gap suggests the leasehold discount is substantial and already priced in by the county's own methodology.

Rental demand in this zip

No directly comparable rental listings were identified in ZIP 96815 for one-bedroom units, which limits the ability to independently benchmark the $2,577 estimated monthly rent.

The estimated monthly rent of $2,577 is the figure underpinning the entire cash-flow calculation. With zero rental comps available in the zip for this bedroom count, that estimate carries more uncertainty than it would in a market with active comparable data. Investors should treat it as a directional figure rather than a confirmed market rate.

What partially offsets that uncertainty is the property's STR designation. Royal Aloha's resort zoning allows daily rentals, which means the effective rent isn't drawn from the long-term lease market — it's drawn from the vacation rental market, where nightly rates in Waikiki can support higher monthly revenue than a standard one-year lease would generate. A $2,577 monthly equivalent on a short-term basis translates to roughly $86 per night at full occupancy. That's a conservative number for a Waikiki STR with ocean-adjacent views and on-site management.

The risk is occupancy. Short-term rental income is variable by season, platform dynamics, and competition from other STR units in the building and nearby. A long-term tenant produces stable, predictable cash flow; an STR produces higher potential revenue with more variance. The $853 monthly cash flow projection assumes consistent occupancy at the estimated rent level — a scenario that may not hold in slower travel periods.

Who this property suits + risks to weigh

This property fits a cash-flow-focused investor comfortable with leasehold title and short-term rental operations — not a buyer seeking long-term appreciation or a straightforward resale exit.

Best fit

The investor this deal suits is one who wants yield now and has a defined hold horizon of under 15 years. The 27.7% cash-on-cash return and $853 monthly cash flow are real, and the STR legal status is a genuine competitive advantage in a city that has restricted most short-term rentals. An investor who can manage or outsource STR operations — or who values the on-site management structure at Royal Aloha — can extract meaningful income from a $185,000 entry point that would be impossible to replicate in a fee-simple building nearby.

This also suits an investor who doesn't need the property to appreciate. If the hold period is 8 to 12 years and the plan is to collect cash flow and exit before the lease becomes a serious resale impediment, the math works. The 7.5% mortgage paydown contribution over five years adds to total return without requiring any market appreciation.

Risks to weigh

The leasehold expiration is the defining risk. At approximately 15 years remaining, financing options narrow — some lenders won't touch leasehold properties with fewer than 30 years on the lease, which means the buyer pool at resale will likely be cash-heavy and yield-focused, further compressing exit price. The $596 HOA fee is a fixed cost that doesn't flex with vacancy. If STR occupancy drops, cash flow compresses faster than a lower-fee building would. The 173-day market time signals that most buyers have already evaluated and passed on this property — understanding why is essential before committing capital.