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78-261 Manukai St, 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
$97,911
$8,159/mo · at 84% occupancy & $464/night
$38,794
$3,233/mo after costs & mortgage
Cap rate
13.7%
Cash-on-cash
25.9%
DSCR
2.30
Confidence
Your assumptions
Revenue
$97,911/yr
Market avg: $97,911/yr · 84% occ · $464 ADR
Financing
$29,939/yr
Operating costs
$29,178/yr
How this property compares to similar short-term rentals nearby.
Comparable set · 10 properties
$184–$4,545
Median $4,168
63%–93%
Median 76%
$50.6K–$788.8K
Median $563.4K
183–318
Median 213
This property · $97.9K
Comparable properties (10)
Cash flow potential High · Appreciation potential Medium
242 days available · 196 days booked ·
183 days available · 135 days booked ·
211 days available · 143 days booked ·
207 days available · 161 days booked ·
214 days available · 135 days booked ·
200 days available · 138 days booked ·
226 days available · 185 days booked ·
318 days available · 293 days booked ·
205 days available · 191 days booked ·
218 days available · 148 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
2.30
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 +25.9%, DSCR 2.30, cash flow $38,794/yr
| Price vs asking | Price | Cash-on-cash | DSCR | Band |
|---|---|---|---|---|
| -25% | $375,000 | 39.4% | 3.06 | Positive |
| -22% | $390,000 | 37.4% | 2.94 | Positive |
| -15% | $425,000 | 33.2% | 2.70 | Positive |
| -8% | $460,000 | 29.5% | 2.50 | Positive |
| Asking | $500,000 | 25.9% | 2.30 | Positive |
| +8% | $540,000 | 22.7% | 2.13 | Positive |
| +15% | $575,000 | 20.2% | 2.00 | 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.
$3,233/mo after all expenses
Cash to close
Down payment, closing costs, and furnishing
$145,000
Return on cash:44%
You qualify for STR financing
Your DSCR is 2.3 · 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
45.5%
over 5-yr hold, with tax shield
Equity multiple
3.5×
total proceeds vs. $145,000 invested
Projected value at exit
$638,141
year 5 · 5.0% annual appreciation
Tax shield contribution
+10.3 pts
of IRR comes from year-1 depreciation
| Year | Equity | Appreciation | Cumulative cash flow | Total value |
|---|---|---|---|---|
| Year 1 | $128,809 | $25,000 | $84,489 | $238,298 |
| Year 2 | $132,894 | $51,250 | $124,752 | $308,896 |
| Year 3 | $137,274 | $78,813 | $166,505 | $382,591 |
| Year 4 | $141,970 | $107,753 | $209,771 | $459,495 |
| Year 5 | $147,007 | $138,141 | $254,574 | $539,721 |
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.