CATHERINE M. MATTHEWS (R), GRI
Broker-In Charge, Callahan Realty, Ltd.
Past President, Oahu Chapter
National Association of Residential Property Managers
Q. I just purchased a small older house as an investment. I am going to be fixing it up and renting it out. I have a good lease from my rental property back in Colorado and am going to start advertising for a tenant once repairs are underway. Do you have any advice to get me started on the right track?
A. First, congratulations on purchasing investment property in Hawaii! Real estate can be a very satisfying and rewarding way to invest your money. It can also create problems when not handled properly. To begin, when arranging for the repairs be certain to use licensed and insured contractors for plumbing or electrical work, as this is the law. If you are doing minor repairs and using a handyman, check references if you choose an unlicensed person. I do not recommend this, but I know many people do it to save money. If you use an unlicensed handyman, be aware that you cannot pay more than $1,000 for materials, labor, and taxes combined. Also, you cannot use a handyman if a permit is required.
When advertising, describe the property only and not the type of tenant you may prefer. Be aware of all discrimination laws, both State and Federal. You may prohibit smoking or pets, but you may not request no children or a single mature adult only.
I strongly suggest that you use the lease and addenda created by the Hawaii Association of Realtors (HAR) which may be purchased for use by non-Realtors. They have been reviewed by the HAR legal council to be sure they comply with all applicable laws. Hawaii and Colorado have many differing laws with regard to Landlord-Tenant relationships.
The timing of your purchase is actually great. NARPM (National Association of Property Managers) is about to hold its Annual Property Management Seminar to help people manage their own properties with greater confidence and knowledge. Our subject matter is more in depth this year and appeals to professional managers also. We have a great lineup of speakers covering varying topics, such as insurance for both owners and renters, laws that have changed with regard to emotional support comfort animals, the new HAR lease and addenda, fair housing laws, new trends and energy saving initiatives, financing investment properties, 1031 tax deferred exchanges, common complaints against landlords to the Regulated Industries & Complaints Office, and more. There will be plenty of time to ask questions, either in a group setting or to a NARPM member individually. A comprehensive binder will be provided with the HAR rental agreement, pet addendum, move-in and vacating instructions, and insurance information. Vendors who can help with maintenance and remodeling will also be on hand.