1909 Ala Wai Blvd APT 1308, Honolulu, HI 96815 — 14.7% Cash-on-Cash

About this property

A 2-bedroom, 1-bath condo on the Ala Wai waterfront, this 674-square-foot unit carries legal short-term vacation rental status — a distinction that separates it from most Waikiki condos on the market.

The listing's most consequential detail isn't the renovated interior or the split AC unit in the living room — it's the legal short-term rental designation. In a city that has aggressively curtailed vacation rental permits, a unit that arrives with legal STR status commands a premium that the $264,000 price tag doesn't fully reflect. The property is fully furnished and move-in ready for an operator, which eliminates the typical setup friction for a new owner.

One structural fact demands attention upfront: this is a leasehold property with the lease expiring in 2041. That's roughly 17 years of remaining term. Leasehold ownership means you're purchasing the right to occupy, not the underlying land — and when the lease expires, ownership reverts to the landowner unless renegotiated. That reality is baked into the price (compare $264K against the for-sale comp median of $588,000 for fee-simple 2-bedrooms nearby) and it shapes every return projection in this analysis.

The unit has been on the market 7 days with no price reduction from the original listing. Parking is rented from a nearby structure rather than deeded — a minor operational consideration for STR guests but not a dealbreaker.

The investment case

At a 14.7% cash-on-cash return against a ZIP 96815 average of 12.4%, this property leads its peer group on the metric that matters most to income-focused investors.

List Price

$263,999

Monthly Payment (PITI+HOA)

$2,281

Principal & Interest

$1,353

Property Tax

$62

Insurance

$88

HOA

$778

PMI

$0

Est. Monthly Rent

$2,929

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

14.7%

Cap Rate

9.4%

Monthly Cash Flow

$648

Gross Rent Multiplier

7.5

DSCR

1.5

The numbers start with a $263,999 purchase price. At 20% down with a 6.43% 30-year fixed rate, the all-in monthly payment comes to $2,281 — principal and interest at $1,353, property tax at $62, insurance at $88, and HOA fees at $778. That HOA figure is the single largest line item after debt service and deserves scrutiny: at $778/month, it represents 34% of the total monthly outlay. Buyers should request the HOA financials and reserve fund status before closing.

Estimated monthly rent of $2,929 against $2,281 in total payments produces $648 in monthly cash flow. The cap rate sits at 9.4% on a net operating income of $2,063/month — strong by any Hawaii standard. The gross rent multiplier of 7.5 means the property pays for itself in rent roughly every 7.5 years, a ratio that reflects the leasehold discount embedded in the price.

The debt service coverage ratio of 1.5 means the property generates 50% more income than needed to cover the mortgage — a comfortable cushion that gives an STR operator room to absorb vacancy periods without going cash-flow negative. For context, the city-wide average cash-on-cash return is 0.0%, which means the overwhelming majority of Honolulu listings don't cash-flow at all at 20% down. This property's 14.7% return isn't just above average — it's in a different category entirely.

Figures exclude depreciation tax benefits, which vary by individual tax situation.

Annual return outlook

The 5-year total ROI of 23.6% draws from three sources, with cash flow doing the heaviest lifting and appreciation providing a secondary tailwind.

Breaking down the 23.6% five-year total return: cash flow contributes 14.7%, mortgage paydown adds 5.0%, and appreciation accounts for 3.8%. That structure is unusual — most real estate investment theses in Hawaii lean on appreciation as the primary driver. Here, the income component dominates.

The 3.8% annual appreciation estimate carries an important caveat: it's a modeled projection, not a figure derived from recent transaction data. Use it as a directional input, not a guarantee. For a leasehold property with 17 years remaining on the lease, appreciation dynamics also differ from fee-simple assets — as the lease term shortens, the pool of eligible buyers (particularly those financing with conventional mortgages) narrows, which can compress resale values in the later years of the hold.

The mortgage paydown contribution of 5.0% reflects genuine equity accumulation through principal reduction over five years. On a leasehold, that equity is tied to the remaining lease term rather than land ownership, but it's real cash value on a sale or refinance within the lease window.

An investor who holds for five years and exits before the lease term becomes a financing obstacle captures all three return components. The math works — but the exit timing matters more here than on a fee-simple comparable.

How it compares to nearby for-sale listings

Five active 2-bedroom listings in ZIP 96815 provide pricing context, and this property sits at a dramatic discount to every one of them.

This unit's $263,999 asking price translates to roughly $392 per square foot. The five nearby 2-bedroom comparables range from $449,900 to $798,000 — a spread that places this property at less than 60% of the lowest comp's price. At 674 square feet, it's also the smallest unit in the comp set, but even adjusting for size, the price-per-square-foot gap is wide.

The most relevant comp is 2121 Ala Wai Blvd APT 1104 — also a 2-bed/1-bath unit at 653 square feet, listed at $449,900 and just 5 days on market. That property is 8% smaller but priced 70% higher. The delta is almost entirely explained by fee-simple versus leasehold ownership. Buyers comparing these two properties are effectively pricing the value of land ownership at roughly $186,000 for a similarly sized unit on the same boulevard.

The for-sale comp median of $588,000 sits more than twice this property's asking price. That gap is a feature for income investors — the lower basis is precisely what makes the cash-on-cash math work. It's a risk for resale investors, since the leasehold discount means the property won't appreciate in lockstep with fee-simple comps as the lease term shortens.

Rental demand in this zip

No active rental comps were available in ZIP 96815 for 2-bedroom units at the time of this analysis, leaving the $2,929 estimated monthly rent as the primary reference point.

The absence of rental comp data in the 96815 zip at this bedroom count is itself informative — it suggests low inventory of available rentals, which typically supports asking rents rather than undercutting them. That said, the $2,929 monthly rent estimate should be treated as a starting point rather than a confirmed figure until an operator tests the market.

For a legal short-term rental in Waikiki, the relevant comparison isn't the long-term rental market — it's nightly STR rates. A unit averaging $150 to $175 per night at 65% occupancy would generate approximately $2,900 to $3,400 per month, which is consistent with the estimate. STR income is more volatile than long-term leases, and occupancy rates fluctuate with tourism cycles, platform algorithm changes, and seasonal demand.

The $648/month cash flow projection assumes the $2,929 rent figure holds. An investor stress-testing this deal should model a 15% revenue reduction — roughly $2,490/month — which would compress cash flow to around $209/month but keep the property cash-flow positive. The 1.5 DSCR provides meaningful buffer before the deal turns negative.

Rent confidence here is moderate: the STR legal status supports premium pricing, but without active comp data, the $2,929 figure carries more uncertainty than a market with abundant rental comparables.

Who this property suits + risks to weigh

This property fits a cash-flow-oriented investor comfortable with leasehold ownership and short-term rental operations — not a buy-and-hold appreciation play.

Best fit

The investor this deal suits is one who wants immediate income rather than long-term land equity. The 14.7% cash-on-cash return and $648/month positive cash flow are real, and they're available at a $264,000 entry point that's accessible compared to fee-simple Waikiki inventory. An operator with STR experience — or willingness to hire management — can run this as a turnkey vacation rental from day one. The fully furnished condition and existing legal STR status remove two of the highest barriers to entry in this market.

A 1031 exchange buyer rotating out of a depreciated asset might also find the price basis attractive, particularly if they're targeting income yield over appreciation.

Risks to weigh

The leasehold expiration in 2041 is the dominant risk. Seventeen years is enough runway for a disciplined investor to extract strong cash-on-cash returns and exit before the lease term starts discouraging conventional financing. But it requires an intentional exit strategy — this isn't a property to hold indefinitely and pass to heirs. As the 2041 date approaches, the buyer pool shrinks and resale values compress.

The $778/month HOA fee is high relative to the purchase price. Any special assessment or increase in HOA dues would directly reduce cash flow. The parking situation — rented from a neighboring structure rather than deeded — adds a small operational dependency that could affect STR guest experience or become unavailable at lease renewal.

STR income is inherently less predictable than long-term tenancy. A regulatory change tightening Honolulu's STR rules could materially alter the income thesis, though the legal designation provides more protection than an unpermitted unit would.