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75-6040 Ali‘i Dr #401, Kailua-Kona, HI 96740, USA
Covers its debt with margin to spare at the current price.
Investment potential
Your scenario · adjust the levers below or open advanced settings to see how returns change
$65,535
$5,461/mo · at 70% occupancy & $435/night
$10,627
$886/mo after costs & mortgage
Cap rate
8.1%
Cash-on-cash
7.1%
DSCR
1.35
Confidence
Your assumptions
Revenue
$65,535/yr
Market avg: $65,535/yr · 70% occ · $435 ADR
Financing
$29,939/yr
Operating costs
$24,970/yr
How this property compares to similar short-term rentals nearby.
Comparable set · 21 properties
$299–$543
Median $435
47%–86%
Median 70%
$34.3K–$106.3K
Median $62.0K
170–293
Median 254
This property · $65.5K
Comparable properties (21)
Cash flow potential Medium · Appreciation potential Medium
283 days available · 208 days booked ·
267 days available · 187 days booked ·
265 days available · 222 days booked ·
293 days available · 184 days booked ·
203 days available · 140 days booked ·
278 days available · 145 days booked ·
170 days available · 144 days booked ·
234 days available · 195 days booked ·
199 days available · 154 days booked ·
265 days available · 184 days booked ·
241 days available · 162 days booked ·
245 days available · 139 days booked ·
288 days available · 151 days booked ·
289 days available · 133 days booked ·
248 days available · 193 days booked ·
278 days available · 172 days booked ·
257 days available · 152 days booked ·
175 days available · 147 days booked ·
254 days available · 172 days booked ·
187 days available · 117 days booked ·
181 days available · 85 days booked ·
Revenue and occupancy reflect Chalet's modeled estimates from observed booking activity for comparable active listings. Individual results vary with management, seasonality, and pricing.
Who this property is for
The same property is a great buy for one investor and a trap for another. Here's the honest read.
1031 / high-equity buyer
~$123.5K
Year-1 tax shield
Buying with cash or low leverage removes the debt-coverage problem entirely, so the thesis rests on appreciation plus a large first-year write-off. At roughly 25% of purchase price, the shield is substantial enough to carry the deal on its own.
DSCR cash-flow buyer
1.35
DSCR at asking
At asking price the property clears the 1.20 DSCR most lenders require, so it should qualify for DSCR financing and cover its own debt service from day one. This is the buyer this deal is built for.
Price-disciplined buyer
—
Break-even purchase price
Even a deep discount doesn't get this deal to break even within a realistic range, so there's no price anchor to negotiate toward. A price-disciplined buyer should pass unless the revenue assumptions change.
For a buyer who materially participates and qualifies for the STR tax treatment.
$123.5K
Estimated first-year deduction · range $102.5K–$140.8K
Why this matters here
At a marginal bracket, this deduction can be worth $37.9K–$52.1K in estimated federal tax saved.
This only applies if you meet the IRS material-participation tests for short-term rentals and are not using a full-service property manager.
Estimate, subject to CPA review. Cost-segregation percentages shown here are illustrative and depend on an actual study of the property.
Some states do not conform to federal bonus depreciation, so your state may not allow the same first-year treatment shown above.
Chalet can introduce a cost-segregation partner — this is not tax, legal, or financial advice.
How cash-on-cash return moves with purchase price. The marked line is break-even (1.0 DSCR).
At this price: cash-on-cash +7.1%, DSCR 1.35, cash flow $10,627/yr
| Price vs asking | Price | Cash-on-cash | DSCR | Band |
|---|---|---|---|---|
| -25% | $375,000 | 15.4% | 1.81 | Positive |
| -22% | $390,000 | 14.2% | 1.74 | Positive |
| -15% | $425,000 | 11.6% | 1.59 | Positive |
| -8% | $460,000 | 9.3% | 1.47 | Positive |
| Asking | $500,000 | 7.1% | 1.35 | Positive |
| +8% | $540,000 | 5.1% | 1.25 | Positive |
| +15% | $575,000 | 3.6% | 1.18 | Positive |
Break-even price
Out of range
This deal does not reach break-even within ±25% of asking.
Discount needed
—
The gap between asking and the price a cash-flow buyer can underwrite.
If refi to 5.5% in 24 mo
+$4,388/yr
Illustrative cash-flow improvement at asking price if rates fall. Planning figure, not a forecast.
Annual avg $5,461 · peaks at $6,609 in Jan
Annual avg 67% · peaks at 79% in Jan
$886/mo after all expenses
Cash to close
Down payment, closing costs, and furnishing
$145,000
Return on cash:24.6%
You qualify for STR financing
Your DSCR is 1.35 · lenders typically require 1.0+.
Get matched with 2–3 vetted STR lenders, free.
What the deal returns over the hold — including the tax shield, which is the whole point for an appreciation buyer.
Levered IRR
26.3%
over 5-yr hold, with tax shield
Equity multiple
2.5×
total proceeds vs. $145,000 invested
Projected value at exit
$638,141
year 5 · 5.0% annual appreciation
Tax shield contribution
+8.0 pts
of IRR comes from year-1 depreciation
| Year | Equity | Appreciation | Cumulative cash flow | Total value |
|---|---|---|---|---|
| Year 1 | $128,809 | $25,000 | $56,322 | $210,131 |
| Year 2 | $132,894 | $51,250 | $67,932 | $252,076 |
| Year 3 | $137,274 | $78,813 | $80,540 | $296,626 |
| Year 4 | $141,970 | $107,753 | $94,160 | $343,884 |
| Year 5 | $147,007 | $138,141 | $108,809 | $393,956 |
Projection, not a promise.
Assumes 5.0% annual appreciation, 1.5% rent growth (operating costs held flat), and that the property qualifies for short-term-rental tax treatment. The year-1 depreciation shield depends on a real cost-segregation study and your tax situation — consult a CPA.
Appreciation is the dominant driver of this return. When cash flow is negative, the deal depends on the property gaining value — it is not paying for itself from income.
Appreciation, rent growth, and financing rates are editable under Edit financials.
STR deals turn on local rules and demand that a generalist agent misses. Chalet matches you with a vetted Kailua-Kona agent who knows which properties actually cash flow — and which to avoid.
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Real Estate Investment Analysis & Market Insights
Disclaimer
This page and the data presented are for informational purposes only. The information provided should not be construed as financial, legal, or investment advice. Market conditions can change rapidly, and past performance does not guarantee future results. Always consult with qualified professionals before making investment decisions.
75-6008 Alii Dr apt 234, Kailua-Kona, HI 96740, USA
2 bed 1 bath 6 guests
Revenue
$48,407/yr
Daily Rate
$270
Occupancy
0.6%
75-5888 Alii Dr unit a4, Kailua-Kona, HI, USA
1 bed 1 bath 2 guests
Revenue
$46,423/yr
76-6283 Ali‘i Dr apt b302, Kailua-Kona, HI 96740, USA
3 bed 2 bath 8 guests
Revenue
$64,504/yr
Hawaiʻi Belt Road, Kona, HI, USA
3 bed 2 bath 8 guests
Revenue
$61,352/yr
77-6377 Kenika Pl, Kailua-Kona, HI 96740, USA
3 bed 2 bath 8 guests
Revenue
$93,705/yr
77-301 Noelani Way unit 12, Kailua-Kona, HI, USA
2 bed 2 bath 6 guests
Revenue
$55,557/yr
Daily Rate
$295
Occupancy
0.7%
Daily Rate
$467
Occupancy
0.8%
Daily Rate
$408
Occupancy
0.7%
Daily Rate
$384
Occupancy
0.8%
Daily Rate
$318
Occupancy
0.7%