 Today's agent at Keller Williams, and this is The Life of the Land is in its real estate with Think Tech Hawaii. This week, we're going to talk about how COVID has impacted the rental market. And I have an awesome guest. I have Duke Kim Han with Hawaii Pacific Property Management. So Duke, welcome. Thank you. Hi, Kina. Welcome to you. Thank you for having me on. Yes. Thank you so much. So go ahead and tell us a little bit about yourself and your background and what you brought you into property management. So years ago, in the early 2000s, I got my real estate license in Florida. I had a few rentals of my own, and I was doing buy-sell. So I came back home after Katrina hit and got into the real estate market here. But I grew up here. You know, I was born and raised here. And then it didn't take me long to get going on the sale side. And what that did was it gave me the opportunity to start accumulating some rental clients. Before you know it, I had 100 rental clients. And then I started this company called Keller Williams Property Management back in the day. And so after we grew out of that, we started a company called Hawaii Pacific Property Management. But, you know, now today, we're one of the largest companies on the island. But all we do is property management. There's no sales in my agents. We only do PM. With some of the highest rents in the nation, Hawaii is just such an amazing place to do property management. With the real estate prices continuing to rise, having rental property here on the island is a great way to accumulate equity wealth. Yes. Yes. So how has the rental market changed? How is the rental market now? We know COVID has had an impact on our economy. So how is the rental market right now? Well, there's still a lot of rentals out there. But what has changed is the PCS season. So permanent change of station for the military. That is normally April to August for as many years as I've been doing property management. But as soon as COVID hit, the government put a freeze on moving servicemen around. So that freeze just unlocked in late September. So now we're having our PCS season be September and October, which is going to really screw up next year. But for right now, you're looking at a big part of our economy on the rental side. So approximately 15,000 families moved in these four months, in and out. It's huge. We've got five military bases here in Hawaii and we're going through PCS season right now. Yes. So are you seeing a need for more rentals? Because I guess I had a concern as a real estate agent as the loan guidelines changed that last people, our military moving in could qualify for loans. So is that making, do we need more rentals in our market or do we have enough? You hear a lot of TV talk about affordable rentals. Because with the rising cost of real estate, naturally what's going to happen is we raise rents as equity and values go up. So right now the equity is going up and the income is going down. Unfortunately for the income going down, a third of our workforce is out of work. So it's really putting a big upside down twist on the rental market. Because these poor people who are in rentals don't have to get out of a rental, but yet they don't have any income. So it's hard for them to go to another rental when you put on your rental application that you're unemployed. So to answer your question, we need more rentals, right? But the city cannot just build rentals because the land cost is so high right now. So what if I had an investment property and I wanted to run it out? So how would I go about doing that? So we have a little video right now to show you on some of the things that Hawaii Pacific does. And I have probably 80 videos in my library that I send out to my owners. But I send these out to kind of educate people on property management if you're an owner, if you're an agent doing property management. So we have a couple of videos that we're going to play right now during your show. And it'll show you. You can go online and even go on our website and just go to the blog section. We have a whole library of educational videos for you. Hello and welcome to Hawaii Pacific's video blog. My name is Duke and I'm the broker owner. If you're wondering why you watched the last 10 videos of me and I have the same shirt on the same background, it's because we film all of our videos all at the same time. Okay? A lot of my friends joke with me. They're like, hey, you have the same shirt on week after week. Yes. But it's all in the same day. I have a videographer who comes in and we take all our videos at one time. So anyway, let me talk to you about a really, really big issue. If you're an investor and you want to know about property management, what will a unit rent for? Let me tell you how that works. A single family home long term will be the best investment that you can do. I'm not saying that a town home or a condo is a bad investment in the state of Hawaii. It's a great investment. But with the condos in the townhouses, you have HOA fees, maintenance fees, homeowner association fees, and all kinds of other fees that are added into and cut into your profit line. With a single family home, you can look, the Hawaii Board of Realtors has lots of documentation, almost a hundred years now of data that shows what the growth rate or the equity rate would be on a home over the course of 10 or 20 years. So for you military personnel, and you guys buy with a VA loan, it's really, really tough sometimes because you're probably moving to a state that has a lower VA age. But these are all things that I can discuss with you. If it's worth keeping the house or it's time to sell, either way, we're a full-time property manager. For you agents out there, we do not do sales, okay? So for you owners out there, if you have any questions about a future rental property or an investment opportunity, give me a call. That'd be a smart thing to do. I can tell you what it'll rent for and if it'll cover your expenses. Again, all of these things are free. You can just call me and I'd like to have a nice conversation with you. My name is Duke and we'll talk to you soon. Aloha. I'm interesting that, you know, you get all kinds of rentals in the rental market. You get condos, you get condos with parking, condos without parking, townhomes with parking, townhomes without parking, HOA fees are really high in Hawaii. So a lot of times people coming from the mainland, they buy a townhome here and they have a five or $600 maintenance fee. Really tough to make a profit on a rental when you got 600 bucks going to an HOA. You know, although it covers your exterior insurance and some of your ground fees and ground maintenance and things like that, yeah, but still as a homeowner, it's hard to make money when you have a maintenance fee. But to your question, you know, the rental market is really, really busy here. Okay. So that being said, that it is really busy and I may have rentals that I want to list with you. Is it true that tenants don't have to pay rent right now? So when I hear that question, I immediately go to this piece of paper and this is the Office of the Mayor, City and County of Honolulu, emergency order number 2020-26. So this one just came out, but all these supersede the previous order and guidelines that people in the rental market have to adhere to. So the rule of the market is you still have to pay your rent. You still are responsible to pay your rent and you're responsible for the rent that you don't pay. So there are a lot of people that are unemployed, lost their job or maybe got their hours cut and it's hard to make the same rent if you're not making the same amount of money. So what property managers are doing is we require communication. As long as the tenant communicates and says, this is what I'm going through, then I can take that back to the owner and say, hey, Mr. You have a tenant that's been paying rent on time all this time and maybe we need to cut them a little bit of a break. So the break can come in one of maybe three or four different options. Option number one, forgive the rent, say no problem, you don't have to pay rent. So we don't collect that at the end. Option number two, you don't have to pay rent, but we're going to collect it at the end. OK, option number three, we reduce the rent and say, hey, Mr. Tenant, the owner says that during this COVID period, your rent will be this, you know, and then option number four, offer the tenant the option to just move out and release, be released from the lease 100 percent. OK, so yeah. So what are you seeing most of right now? Um, the people that I had that are struggling with the rent are all tourists or airline or hotel related. And so the thing I ask my owners is, how do you want to do with this? And they ask me, is there a chance that this person is going to make money again or have the money to pay back three months of rent? And, you know, my my answer with the owner is the best thing to do strategically for you as an owner is to let the people out of the lease. Just let them go. Say, Mr. Tenant, you have to the end of this month to be released from your lease. If you decide to leave and we'll just hold on your security deposit and whatever happens from that point on, you're not responsible for the next eight months of your lease. You're let out. That's the best option. OK, so I have seen that there is a rent relief program. Can you share more about that? So we offer the opportunity to apply for some of these rent relief programs and they actually come in different forms. Catholic Charities is the strongest. You know, right now between the United Way and Catholic Charities, they are offering, if you qualify, two thousand dollar max all the way till December. So that is standing today. They have the last time I heard that which was a month ago, they had twenty eight million dollars to give away, not to lend to just give away as a grant. So the city, the city has some of the CARES funds that they're holding, that they're lending, they're giving away also as rent grants and rent relief. So if someone wanted to take advantage of that, what would they need to do? They would call or contact the agencies, both of them, a low United Way and Catholic Charities have an online application. So you just fill that out and, you know, a couple, three days later, you'll get a call back from somebody and they'll go over the application, make sure you did everything correct and then you'll be in the system. I believe we've had it two times in our properties, both times it was smooth and within five days we had our check. OK, and they can do that month after month or is it a one month thing or? Till December. Wow. OK. So I do have some information on that and I'm sure I'm sure it does too. If you have questions or if that's something you know someone that needs it or if you need it yourself, please reach out. We'd be happy to share the flyer with you. Um, so what about, um, what about Bill Seven? And hearing a lot about this thing, Bill Seven, can you can you kind of elaborate on that and? Two years ago, the city and county of Honolulu is actually through Mayor Caldwell offered the developers of the city the opportunity to have all their building costs and fees waived. Now, this is huge because if you're building a, you know, 60 unit home condominium complex and you're going to rent it out, the rental complex, you're looking at a lot of fees. I would say in excess of ten thousand dollars, I would say in excess of twenty thousand dollars. So the city is saying that if you're going to sign up for this bill and make your unit qualified for it, which is to rent it out at 80 percent of the AMI, the average monthly income of the Honolulu play, the income, then we, the city will waive all their fees to you as Mr. Developer. It's amazing. It's a great opportunity. And right now today, I'm in contact with approximately four developers that have anywhere from 12 to 16 buildings that are being built right now. And some of these will come out as early as November of this year and as late as November of next year. But, you know, a couple hundred, maybe even 250 affordable units to rent. Wow. So to qualify for that, is there a minimum number of units that you have to have? You know, most people that are doing this are people that have development backgrounds. They have an architectural or an engineer background or somebody that can draw plans and are very familiar with the city. So they just had a big hearing with the city council because the city council wanted to try and because they heard how many people were building. They wanted to tighten up the restrictions on that. So all the developers got together and approached the city council. And from what I hear, everything was frozen back to two years ago. So they're still on plan. Everybody's pushing forward. And you're going to see some of these buildings come out as early as in two months. Wow. So that'll be great. So let's go back to my investment property. What if I want to do increase the rental value? Is that something that's possible in this market to increase the rental value of my my rental investment? You know, people who ask me that question, I know they're really, really smart. They probably already know the answer, but I have a video for that. How's that? So why don't we cut the video and then we'll talk about some of the best money makers in the rental side. Hello and welcome to H.I. Pacific's blog. We send out a video every week and we put this on our blog section of our website. So today I want to talk to you about if you're an owner and you're looking to update, kind of just spruce up your unit a little bit. What are the best updates or bang for your buck that you can get? This is a common question. The average home in Hawaii, and this is going for town homes, are usually anywhere from 40 to 60 years old. Wow. That's my age. I need an update. So your unit will need an update also. You cannot just take your 60 year old home and put it on the market for rent. It's not going to rent and it's not going to rent for a lot of money. So what are the best bang for the buck maintenance or updates or upgrades you can do for your home? One, flooring. Always put some vinyl product in your house. Tile is a little bit expensive, but that's also an option. If you're just looking to do some upgrades from carpet or the old laminate, put a vinyl product down. It's not expensive and it will have a 25 year shelf life on there. Good, good thing to start with. The next thing I find that most homes do not have air conditioning. How important is this? Super important. People that come from the mainland cannot take our humidity. I tell you that from a firsthand view. I lived in the mainland, then I moved home and I couldn't sleep without air conditioning. It's just the thing in the mainland, most homes have air conditioning. Here in Hawaii, there's about a 50-50 shot that you're going to get a home that has air conditioning. So those are the two things. Change the flooring, got to change the air conditioning, put air conditioning into your homes. The houses without air conditioning, rent lasts in my experience. If you have any questions on that, you want to talk to me direct. You have some other issues that you want to talk through, we can certainly help you. We do some of that work in-house. We have some people who do upgrading and all that kind of stuff. My handymen are very talented in the flooring division. And I have a licensed AC contractor that does AC upgrades. OK, so again, talk to us by calling us at 808-445-9223 or you can email us at www.hrpacificpm.com. We'll see you soon. Thank you. We'll talk to you. Bye. No, but I know you already know this, you know, because I've seen some of your developments and I've seen some of the homes that you put on the market and you have a really good eye for what is current and what people want. So you, you know, you can back me up on this. You know, I have people that have carpet that's 40 years old. They go to me and they say, I rent out my home. What do I need to do? Yes, put down my plank and get rid of the gray. We're kind of overdone in the gray. I'm guilty of it, too. But we're slowly migrating to something besides gray and white. But so anything else besides flooring and, yes, AC is a must. I'm a big wimp. But anything else that can add value to a property if we plan on renting it? You know, I saw something the other day that I hadn't seen in a long time. I went into this house and it had four Micah countertops and it looked good. And so, you know, the lady was so conscious, she was so worried about it. She's like, are these countertops going to be okay? I said, these countertops are great. You don't have to spend any money there. But, you know, this 30 year old carpet that you have down that you rented for 15 tenants now probably got to change the carpet. But yeah, it's always the flooring. And then, you know, you walk into these houses that have single wall. It's really, really hot because the heat just comes right to the wall. So, you know, you can do kitchen updates. You can do bathroom updates. You really want to have parking in today's rental market as much as possible. We as a company don't even take properties that don't have parking. That's how difficult it is. So, yeah, you know, parking was, there was just an article in the paper that said that an average parking spot here in Hawaii in a single family home can range from 40 to 80 grand in value. And you can pay up to $40,000 today for an extra space in the condominium. Oh, yes. That's in our market. Yeah, I've seen them for sale downtown for $70,000. So, so let's talk more about your company. So what makes your company different than any other property management company? Okay. Oh, it's an easy question. For us, when I started this company, I had property that I wanted to have managed and I couldn't find anybody to one answer the phone, property managers. So that's one thing I do to guarantee their work. We at Hawaii Pacific property management guarantee our work. We have three guarantees. One is a communication guarantee that will call you back or answer our phones. Two, we have an eviction guarantee that states that if we put a tenant in your unit and we have to evict them, that I Hawaii Pacific will pay the legal costs. Nobody does that. Three, I give you a rent guarantee where I tell you up front what your house will rent for on the low side. What's the lowest amount of rent you'll get for this house. So how's that? Yeah, I can vouch you are who I always send out to my clients. So let's also you and I really value giving back to the community. It's one of the things I really value and I know you do too. So what do you do as a company to give back to the community? So two things personally, I give to Habitat for Humanity. Right. And sometimes we have an opportunity on the board of directors for the realtors to go and help build a house or clean a community. But that's my personal one. Another personal one that's dear to my heart that my company gives to is the Humane Society. You know, I have a dog, I know a lot of friends that have rescue dogs, I've actually, you know, worked at the Humane Society, volunteering and such an underappreciated entity of our community. They work so hard, those people. They're on they're on fundraising watch 24 seven. You know, if I had I had a job where I had to ask people for money every single day in order to stay alive. It's so much pressure with COVID going on now. They've had to shut down some of their services. But people still keep bringing cats and dogs and they keep picking them up on the side of the road every day in our community. My God, help the Humane Society folks. I can't tell you that enough. I'm right there with you. So is there anything else you'd like to share that you think our viewers might be interested in? You know, the board of directors at the board of realtors has really done a good job communicating with the realtor family that we have out there because the rules and the laws keep changing. And some of the hardest things to do is to when the when the law changes is to think on your feet and say, you know, hey, seven thousand realtors, this is what we recommend that you do and don't do. And this is what the law says you can't do and you should do. So, you know, we've we've really had a really difficult time with the law changing on a dime. First thing is you'll hear, oh, the mayor or the governor is about to change the COVID rule, you know, or order twenty six or twenty three. And then you have Suzanne Young and Trisha Nicola. Get on there, you get on their horse and just try to figure out how this delves into essential workers like real estate and all the other people in our offices. How does the board of realtors give support to the realtor family out there and how does the realtors stay safe and keep them away from getting sick with COVID right now? So there's there's just so much going on. There's so much communication going on. And I got to say that, you know, Trisha and Suzanne have just done an incredible job with trying to press down all that information along with our attorney, you know, and just get everything right. So that's why I I feel really happy to be a realtor in today's market. Yeah, they they really have. They take care of our owner occupants or tenants and they take care of us. All right. Well, thank you so much. This has been great information. I hope our viewers have enjoyed it and think you think tech Hawaii. I will be back in two weeks and we have some great upcoming shows on where's the commercial market and we're going to take a look at the luxury market and the impact COVID has had on the luxury market here in Hawaii. So thank you all for joining us. And I will thank you so much, Duke. It has been awesome and I will see you all in a couple of weeks. Thank you. Bye.