How to Thrive as a Real Estate Investor in Hilo, HI

Aug 15, 2023
Hilo, Hi

Should you Invest in Hilo?

Hilo, located on the Big Island of Hawaii, offers a unique and appealing environment for real estate investment, blending natural beauty, a relaxed lifestyle, and affordability relative to other parts of Hawaii. Known for its lush landscapes, active volcanic scenery, and local charm, Hilo attracts a steady flow of residents, retirees, and eco-tourists. While Hilo doesn’t see the high tourism density of areas like Honolulu or Maui, it offers investors stable, long-term rental demand, a relatively affordable entry point, and properties with significant appreciation potential as the town grows.

Exploring the Distinct Neighborhoods of Hilo’s Real Estate Market

Overall

Median Home Price

$800,000

Projected annual sales

$8,057

-18.42%
from last year

Borrowing coastal

7%

Hilo’s diverse neighborhoods provide options for a range of investment strategies, from family-oriented suburban areas to vibrant downtown spaces popular with eco-conscious tourists. The city features properties that suit both residential and vacation rental markets. Below are some of the most promising neighborhoods in Hilo for real estate investment:
Regional
Downtown Hilo
Kaumana
Waiakea
Pepeekeo
Median Sold Price
$350,000
Price MTM Change
+0.7%
Price YTY Change
+4.0%
Median Sold Price
$420,000
Price MTM Change
+0.6%
Price YTY Change
+3.6%
Median Sold Price
$390,000
Price MTM Change
+0.7%
Price YTY Change
+3.8%
Median Sold Price
$310,000

The California Market Is Volatile But Is Still Attractive

In conclusion, while the California housing market presents challenges, it also offers potential opportunities for investors who approach it with careful consideration and strategic planning. Despite the current hurdles, such as declining sales and limited housing supply, the strong demand and market competition indicate resilience and potential for growth. By staying informed, conducting thorough research, and seeking guidance from professionals, investors can navigate the market dynamics and position themselves for success. With its diverse regions and evolving market conditions, California continues to be an attractive destination for real estate investment. By adapting to the changing landscape and taking a long-term perspective, investors can find promising prospects and contribute to the vibrant housing market in the Golden State.

Forecast and Analysis of Hilo, HI Real Estate Market

Hilo’s real estate market combines affordability with a rising demand for both residential and rental properties. Here’s an in-depth forecast and analysis of the key factors influencing Hilo’s real estate market:

Steady Appreciation and Demand for Affordable Housing

Hilo’s property values are generally lower than other areas in Hawaii, making it an attractive option for first-time buyers, retirees, and investors seeking affordable entry points. Limited development and ongoing demand from both residents and eco-tourists support consistent appreciation. This trend is expected to continue, particularly as affordability remains a challenge on other Hawaiian islands.

Eco-Tourism and Vacation Rental Potential

With its proximity to natural attractions like Volcanoes National Park, waterfalls, and botanical gardens, Hilo is a hub for eco-tourism. This demand supports short-term rental opportunities, although local vacation rental regulations must be carefully navigated. Properties near downtown and tourist attractions can yield strong returns, especially for those targeting eco-conscious travelers.

Economic Stability Supported by Healthcare, Education, and Tourism

Hilo’s economy relies on sectors like healthcare, education, and tourism. The presence of Hilo Medical Center, University of Hawaii at Hilo, and cultural attractions help maintain employment stability and housing demand. While tourism can be cyclical, Hilo’s economic diversity supports steady real estate demand.

Resilience Initiatives and Community Development

Hilo has seen infrastructure improvements in recent years, particularly around flood control and climate resiliency. Projects that enhance flood mitigation and improve public spaces add to the long-term value of nearby properties. Additionally, sustainability initiatives—such as support for renewable energy—are increasing the appeal of properties with eco-friendly features.

Market Wrap-Up in Los Angeles :

  • The Los Angeles housing market has experienced mixed trends, with some regions showing price increases while others have seen decreases.
  • Home sales have declined across most regions, indicating a slowdown in the market.
  • The Central Coast region experienced a decrease in median sold price and sales, while the Central Valley saw a slight increase in prices and a decrease in sales.
  • Far North region witnessed an increase in median sold price, but a decline in sales.
  • The San Francisco Bay Area reported a slight increase in prices and sales.
  • Southern Los Angeles saw a moderate increase in prices but a decline in sales.
  • The California Association of Realtors (C.A.R.) revised its housing market forecast, projecting a decline in home sales and median prices compared to the previous year.
  • Factors contributing to the market conditions include mortgage rates, inventory levels, buyer demand, and economic conditions.
  • The forecast indicates a challenging market environment, but there are positive signs of stability and potential growth in certain areas.
  • It is important for potential investors to carefully analyze market trends, consider regional variations, and seek guidance from real estate professionals before making investment decisions.
Mortgage calculator creative image

Strategies for Navigating Hilo’s Real Estate Market

Hilo's real estate market is competitive and unique, offering both opportunities and challenges for investors. By carefully considering these strategies, investors can make well-informed decisions that maximize returns and minimize risks.

Prioritize Neighborhood Research and Community Appeal

Each Hilo neighborhood has unique characteristics that affect its long-term value and rental appeal. Investors should carefully research neighborhoods to understand the potential for appreciation, rental demand, and community growth. Properties in established neighborhoods with schools, parks, or waterfront views are highly attractive to long-term renters and families.
magnifying glass on a chart and laptop
A man pointing to a graph chart

Consider Long-Term Rentals for Consistent Income

Hilo’s real estate market is well-suited for long-term rentals due to steady demand from local residents and limited competition from new housing developments. Properties in family-oriented neighborhoods, like Waiakea or Kaumana, are particularly appealing to tenants looking for stable housing, which translates to low turnover and reliable income.

Work with Local Real Estate Agents

Local agents familiar with Hilo’s market dynamics can provide valuable insights into neighborhood trends, property values, and potential investment opportunities. An agent with local expertise can also offer guidance on navigating Hilo’s regulatory landscape, ensuring compliance and helping you identify properties with the best long-term potential.
couple talking to a consultant
Woman in front of board of sticky notes planning

Account for Climate-Resilient Features

Given Hilo’s exposure to heavy rains and tropical storms, properties with climate-resilient features are advantageous. Seek homes with storm-resistant windows, elevated construction, and good drainage systems. Climate resilience is increasingly valuable as buyers and renters prioritize properties that can handle Hawaii’s weather patterns.

Prioritize Low-Maintenance or Newly Updated Homes

Due to Hilo’s tropical climate, maintenance costs can add up quickly. Choosing properties that are either newly renovated or require minimal upkeep can reduce unexpected expenses and maximize your investment returns. Look for homes with quality, weather-resistant materials and low-maintenance landscaping.
cashbag next to mini house next to coin bank
Man in suit playing jenga with house on top

Consider the Potential for Agricultural or Eco-Friendly Properties

Hilo’s natural environment and agricultural background make it well-suited for investors interested in eco-friendly or agricultural properties. Properties with enough land for small-scale farming or renewable energy installations, such as solar power, may attract eco-conscious buyers or renters and can be a unique addition to your portfolio.

Monitor Market Trends and Local Developments

Stay updated on Hilo’s market trends, infrastructure developments, and economic conditions. Whether it’s an increase in eco-tourism, new community projects, or shifts in local regulations, understanding these changes allows investors to adapt their strategies and seize opportunities as they arise.
Coins stacking in an upward trend shape next to mini house

Other Investment Opportunities in Hawaii

When it comes to real estate investment opportunities in Hawaii, Hilo is not the only city worth considering. Here are a few reasons why you might want to explore investment in East Honolulu, Honolulu, and Kailua  :

East Honolulu

East Honolulu offers a compelling mix of natural beauty, upscale residential neighborhoods, and a strong community atmosphere, making it a prime target for real estate investors. Known for its picturesque coastlines, scenic hiking trails, and family-friendly neighborhoods, East Honolulu attracts both locals and affluent buyers seeking a peaceful environment within easy reach of the urban conveniences of Honolulu. East Honolulu’s residential offerings, from luxurious single-family homes to charming townhouses, appeal to those looking for long-term appreciation, steady rental income, or both.

Honolulu

Honolulu offers a unique combination of natural beauty, vibrant culture, and economic opportunity, making it an attractive destination for real estate investors. With a growing tourism sector, strong military presence, and a steady influx of new residents, the demand for housing remains high. Honolulu's blend of luxury properties, vacation rentals, and residential homes ensures diverse opportunities for investors seeking rental income, long-term appreciation, or both.

Kailua

Kailua, located on Oahu’s stunning windward side, combines natural beauty with a laid-back, family-friendly atmosphere that’s increasingly appealing to both residents and investors. Known for its lush landscapes, pristine beaches, and charming small-town feel, Kailua has grown in popularity, becoming one of Oahu’s most desirable areas. Although real estate in Kailua can be costly, its highly sought-after neighborhoods offer stable appreciation, a high quality of life, and a robust rental market.

Rentastic Verdict

Hilo, Hawaii, presents a unique real estate market where affordability, local charm, and eco-tourism converge, creating diverse investment opportunities. Unlike more commercialized areas, Hilo retains its scenic beauty and authentic character, attracting residents, retirees, and visitors who appreciate a nature-oriented lifestyle. With property values typically lower than on neighboring islands, Hilo offers a more accessible entry point for investors, making it an appealing choice for those seeking to build a portfolio in Hawaii without the high costs of places like Honolulu or Maui. The town’s year-round eco-tourism and growing population foster steady demand for housing, particularly in family-friendly neighborhoods such as Waiakea and Kaumana, which translates into reliable rental income potential for long-term rental properties.
As Hilo continues to benefit from infrastructure upgrades, community projects, and eco-conscious developments, its appeal as an investment destination is set to grow. Investors who align with local trends—prioritizing sustainable features, climate resilience, and scenic outdoor spaces—are likely to enjoy both short-term returns and long-term appreciation, especially as environmental considerations become increasingly important to renters and buyers alike. Hilo’s combination of affordability, vibrant culture, and natural attractions makes it a valuable addition to any investor’s portfolio. By strategically focusing on the unique character of its neighborhoods, adapting to regulatory changes, and optimizing properties for long-term value, investors can maximize their potential in this resilient and community-focused market. Whether aiming for rental income, future resale, or a personal retreat, Hilo offers a rare blend of affordability and natural beauty that stands out among Hawaii’s real estate opportunities.4o

Empowering Investors in the Hawaii Real Estate Market

Rentastic provides a comprehensive suite of tools designed to empower investors in navigating the dynamic Hawaii real estate market. These tools offer unique functionalities that cater to the specific needs of investors, enabling them to make informed decisions and maximize their investment potential.

Rent Estimator

The Rent Estimator tool equips investors with valuable insights into the rental market. By analyzing market data and property-specific factors, it accurately estimates the potential rental income of a property. This tool enables investors to set competitive rental rates, project cash flows, and evaluate the profitability of their investments.
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Deal Analyzer

With the Deal Analyzer tool, investors can perform comprehensive financial analyses of potential real estate deals in Hawaii. By inputting essential financial information such as purchase price, rental income, expenses, and financing details, investors gain a deeper understanding of the investment's profitability. This tool assists in identifying lucrative opportunities and mitigating risks by providing reliable calculations and insights.
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Mortgage Calculator

Rentastic’s Mortgage Calculator offers investors the ability to estimate monthly mortgage payments based on loan parameters, interest rates, and loan terms. This tool helps investors evaluate different financing options, determine affordability, and understand the impact of financing on their investment’s cash flow. By making informed decisions about mortgage options, investors can optimize their financial strategies.
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Expense Tracking

Successful real estate investing requires efficient expense management, and Rentastic’s Expense Tracking tool simplifies this process. It allows investors to track and monitor property-related expenses, such as maintenance, repairs, insurance, and property management fees. By maintaining accurate records and gaining visibility into their expenses, investors can effectively budget, analyze profitability, and make informed financial decisions.
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Rentastic's suite of tools combines data-driven insights and user-friendly interfaces to empower investors in the Hawaii real estate market. These tools provide a competitive edge by enabling investors to accurately estimate rental income, analyze deal profitability, evaluate financing options, and manage expenses. By leveraging Rentastic's tools, investors can confidently navigate the Hawaii market, identify lucrative investment opportunities, and optimize their returns.
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