5 Hawaii cities ranked by estimated cap rate. The average cap rate across Hawaii markets is 3.1%, with median home prices averaging $849K and rents averaging $3,038/mo. Hilo leads with a 4.0% cap rate at a $560K median price. Hawaii's low average property tax rate of 0.28% gives investors a significant cash flow advantage.
Hawaii offers 5 investable rental markets tracked by CapRateCity. The state average cap rate of 3.1% is near the 3.81% national average. No cities pass the 1% rule at median prices, so value-add strategies are essential.
Prices and rents: Hawaii home prices average $849K, which is 155% above the national average of $333K. Rents average $3,038/mo.
Taxes and costs: Property taxes average 0.28% across Hawaii, below the 1.08% national average — a meaningful cash flow advantage that adds roughly $6,792 per year to NOI on an average-priced property. Hilo has the lowest rate at 0.28%.Vacancy averages 4.2%, tighter than the national average — favorable for landlords.
Growth outlook: Population growth across Hawaii averages 0.20% per year, led by Hilo at 0.2%. Home values are appreciating at 2.0% annually on average. Moderate growth provides a stable demand foundation.
Bottom line: Hawaii is primarily an appreciation market. Cash flow investing requires below-median purchases or value-add strategies. Consider whether the growth and appreciation potential justifies tighter margins.