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78-261 Manukai St, Kailua-Kona, HI 96740, USA
Airbnb investment analysis
2 beds·2 baths·6 guests
Local Kailua Kona STR agent
This deal is cash-flow negative
A local agent can surface better STR-friendly properties nearby — or validate this one with on-the-ground data.
Connect with Kailua Kona STR RealtorInvestment potential
Your scenario · adjust the levers below or open advanced settings to see how returns change
$65,021
$5,418/mo
Projected gross rental income at your assumed occupancy rate and nightly rate. Net of cleaning fees.
−$58,900
−$4,908/mo
After operating costs and mortgage.
Cap rate
1.3%
Cash-on-cash
-4.7%
NOI
$15,815
Revenue
$65,021/yr
Market avg: $65,021/yr · 75% occ · $415 ADR
Financing
$74,715/yr
Operating costs
$49,206/yr
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
~$308.2K
Year-1 tax shield
Buying with cash or low leverage neutralizes the debt-coverage problem, so the thesis rests on appreciation plus a large first-year depreciation write-off. For a 1031 or high-equity buyer, the tax shield and long-term upside outweigh thin cash flow.
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 here. A price-disciplined buyer should pass unless the revenue assumptions change.
DSCR cash-flow buyer
0.21
DSCR at asking
At asking price the property doesn't qualify for DSCR financing or pay for itself. If you need cash flow from day one, look at a mid-term-rental fallback or a different Kailua-Kona submarket.
For a buyer who materially participates and qualifies for the STR tax treatment.
$308.2K
Estimated first-year deduction · range $255.8K–$351.4K
Why this matters here
At a marginal bracket, this deduction can be worth $94.7K–$130.0K 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 -3.7%, DSCR 0.21, cash flow -$58,900/yr
| Price vs asking | Price | Cash-on-cash | DSCR | Band |
|---|---|---|---|---|
| -25% | $935,850 | -3.4% | 0.28 | Below break-even |
| -22% | $973,284 | -3.4% | 0.27 | Below break-even |
| -15% | $1,060,630 | -3.5% | 0.25 | Below break-even |
| -8% | $1,147,976 | -3.6% | 0.23 | Below break-even |
| Asking | $1,247,800 | -3.7% | 0.21 | Below break-even |
| +8% | $1,347,624 | -3.8% | 0.20 | Below break-even |
| +15% | $1,434,970 | -3.9% | 0.18 | Below break-even |
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
+$10,951/yr
Illustrative cash-flow improvement at asking price if rates fall. Planning figure, not a forecast.
Before mortgage · 24% margin
Cash to close
$361,862
Down payment, closing costs, and furnishing
DSCR below 1.0 — but you can still qualify
STR-friendly lenders often use gross revenue to qualify — even below 1.0 DSCR. Get matched with 2–3 vetted lenders, free.
DSCR ratio
0.21
How this property compares to similar short-term rentals nearby.
Comparable set
· 10 properties$198–$493
59%–100%
$46,394–$93,319
183–321
Comparable properties (10)
What the deal returns over the hold — including the tax shield, which is the whole point for an appreciation buyer.
Levered IRR
4.0%
over 5-yr hold, with tax shield
Equity multiple
1.2×
total proceeds vs. $361,862 invested
Projected value at exit
$1,592,544
year 5 · 5.0% annual appreciation
Tax shield contribution
+5.3 pts
of IRR comes from year-1 depreciation
| Year | Equity | Appreciation | Cumulative cash flow | Total value |
|---|---|---|---|---|
| Year 1 | $321,456 | $62,390 | $55,136 | $438,983 |
| Year 2 | $331,650 | $127,900 | -$2,788 | $456,761 |
| Year 3 | $342,581 | $196,684 | -$59,723 | $479,542 |
| Year 4 | $354,301 | $268,909 | -$115,653 | $507,557 |
| Year 5 | $366,870 | $344,744 | -$170,563 | $541,051 |
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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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.