Hawaii Rental Portfolio Guide
What you need to know before building or growing a rental portfolio in Hawaii — property tax burden, state income tax, security-deposit rule, source-of-income law, and the metros that actually cash-flow after accounting for local taxes.
Tax burden on Hawaii rentals
Property tax
0.32%
effective rate on median home value
At 0.32% effective, this is one of the lowest property tax burdens in the country (rank 1 of 51). Portfolio holding costs stay low even in appreciating markets — a big structural advantage for long-term holds.
State income tax
11.00%
top marginal rate
A top marginal rate of 11.00% is high nationally. Rental portfolio income at scale takes a significant state hit on top of federal, so serious operators lean hard on depreciation, cost segregation and 1031 deferral. Long-term hold economics reward staying under the top bracket where possible.
Security deposit rule
State law caps security deposits at 1 month' rent. Charging above the cap exposes the landlord to statutory damages in most states, so build lease templates that respect this ceiling from day one.
Deposit rules change; verify current statute before drafting a lease.
Best cash-flow markets in Hawaii
Modeled monthly cash flow on a median-priced single-family purchase at 20% down, 30-year fixed, using Hawaii’s 0.32% effective property tax rate plus 25% of rent for insurance, maintenance, vacancy and management.
| Market | Median price | Median rent | Annual property tax | CF / month |
|---|---|---|---|---|
| Hilo, HI | $571,308 | $2,954 | $1,828 | $-931 |
| Kapaa, HI | $1,023,497 | $5,241 | $3,275 | $-1,707 |
| Urban Honolulu, HI | $851,163 | $2,980 | $2,724 | $-2,454 |
| Kahului, HI | $997,307 | $3,572 | $3,191 | $-2,815 |
State median across these metros: $924,235 home, $3,276 rent, $-2,080/mo modeled cash flow.
Track your Hawaii rental portfolio
The Pro Portfolio Tracker rolls up every property in your portfolio, auto-revalues them monthly against local price data, and flags DSCR risk and equity milestones. Each Hawaii property carries the state-specific tax burden shown above through to the cash flow calculation.
Property tax rate: Tax Foundation. Security deposit rule: state statute. Verify current law before making decisions — statutes change and this page is a planning reference, not legal or tax advice.