DSCR Loans in Hawaii

Last updated: May 2026

Hawaii has the lowest effective property tax rates in the nation, but also the highest median home prices and cost of living. For DSCR investors, the real opportunity often lies in short-term vacation rentals, where nightly rates can dramatically outpace long-term lease income and push DSCR ratios well above lender minimums.

Property Taxes in Hawaii

Hawaii's property tax rates are the lowest in the country, though high assessed values still produce meaningful tax bills. Honolulu County averages about 0.28%, Maui County roughly 0.25%, and Hawaii County (Big Island) around 0.30%. Residential investor properties are taxed at higher rates than owner-occupied homes.

Insurance Costs

Typical investment property insurance in Hawaii runs $1,350/yr. Hurricane and volcanic hazard coverage are important considerations. Properties in lava zones on the Big Island face very limited insurer options, and hurricane deductibles can be as high as 2-3% of dwelling value.

Landlord-Tenant Laws

Hawaii is considered less landlord-friendly due to longer eviction timelines and strong tenant protections. Nonpayment evictions require a minimum 5-day notice but typically take 45 to 90 days through the courts. Security deposit limits are set at one month's rent, and landlords must return deposits within 14 days.

Top Investment Markets in Hawaii

DSCR Considerations in Hawaii

High property values mean large loan amounts, so even a strong DSCR ratio involves significant monthly debt service. Lenders experienced with Hawaii often accept documented STR income at a discounted rate for DSCR purposes. Be aware that many counties strictly regulate short-term rentals with permit caps, which directly affects income projections.