Locations on Maui
There has never been a greater time to enjoy the luxury of owning a vacation rental in Maui that would afford year round warmth and fun for you and your love ones while Air B n B pays the mortgage and utilities. The average rental condo pays for itself
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Makena & Wailea Real Estate for Sale
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Makena Condos for Sale
Looking to escape the hustle and bustle but still want to enjoy the fine amenities of Wailea Resort? Owners of Makena condo villas typically enjoy more secluded and slightly quieter surroundings then that of their neighbors. And with fine dining, outdoor activities, and boutique shopping just a short drive away, it is hard to imagine having to leave your tropical oasis very often.
With postcard sceneries, luxurious living spaces, and relaxing recreation, the perfect Hawaii escape is potentially right at your fingertips. As you are browsing through South Maui condo real estate, we encourage you to contact us if you start to feel a little overwhelmed. Choosing the right piece of paradise can be tricky with all the options available, so our Hawaii real estate professionals are here to help guide you through the process and finding the perfect condo for your needs!
UPDATED: January 20, 2020
After the new law on restrictions on vacation rentals, people were surprised by how severe the restrictions are. It also had to do with fines.
Because It is not possible to advertise these properties on a nightly rate; vacation rentals could no longer operate as before. It is possible to sign a 30-day rental agreement legally, which complies with the residential zoning code.
Vacation Rental remains strong
There is a strong market for vacation rentals despite these new regulations. Many families want to rent a month or more and is especially true during the Summer and Winter months. Occupancy rates likely will fall, so these may not be as profitable as before. Many buyers of these properties do want to use it for themselves from time to time, so if the overhead is satisfied, then that usually is a good enough situation.
In some instances, have a negative cash flow may be a benefit tax-wise. Please talk to your tax advisor to see if this could make sense for you. Many times buyers of Hawaii investment real estate are more interested in appreciation over positive cash flow.
Oahu Condos that allow nightly rentals
If you want to have a property where nightly rentals are allowed, consider the following condos in Waikiki:
There are more beyond this list, but these are the most notable condos that can legally be rented nightly. When I doubt look at the zoning. It should say it is Hotel/Resort Zoned.
Other possibilities on Oahu are:
Ocean Villas at Turtle Bay on the North Shore of Oahu
Beachvillas @ Ko Olina on the West side of Oahu in the Ko Olina resort community
There are also properties with existing Vacation permits. Please ask us to help you find one of those.
The neighbor Islands may be a good option to consider. Maui, Kauai, and Big Island also have vacation units and properties. Please contact us to learn more about these options.
UPDATED July 15, 2019
Mayor Caldwell signed into law a bill 89, which will have a broad sweeping effect on the vacation rental industry on Oahu.
Under the new law up to 1700, new short-term vacation units will be allowed on the island. They are a designated number in each major district. The limit is set at no more than 0.5% of the total number of dwelling units in a district.
The number of vacation units per District is as follows:
1. Honolulu (this includes Honolulu, Pearl City, Aiea, and Diamond Head): 907 units
2. Hawaii Kai: 92 units
3. Ko’olau Poko (which includes, Waimanalo, Lanikai, Kailua, and Kaneohe): 183 units.
4. Ko’olau Loa (which includes Kaaawa, Punaluu, Hauula, Laie, and Kahuku): 23 units.
5. North Shore: no more units will be allowed on the North Shore, which includes Waimea, Sunset, Pupukea, Haleiwa, Waialua, and Mokuleia)
6. Central Oahu (which included Mililani, Mililani Mauka, Waipio, Wahiawa): 256 units.
7. Ewa (Which includes Ewa, Kapolei, Ewa Beach): 171 units.
8. Waianae (Which includes Maili, Waianae, Makaha): 67 units.
These 1700 units would be classified as home shares or Bed and Breakfast in owner-occupied homes. A maximum of two rooms will be allowed to be rented under these permits.
The North Shore has a community-drafted sustainability plan that has outlawed the addition of any new short-term rentals. This is why no new units will be allowed there.
The new permits will not begin to be issued until October 2020.
Unpermitted Vacation rentals can face fines
For unpermitted Vacation rentals, the fines will be stiff. There is a $10,000 per day fine that will be levied. Currently, the predominant residential zoning on Oahu allows for a 30-day minimum rental period. If you are renting for shorter than this, you could be subject to a fine.
Vacation Rentals still can be possible:
It is still possible to have a vacation home that you rent out when not here and using Airbnb. Adhering to the zoning laws does allow for owners to rent their homes, but they must comply with the 30-day minimum. The times during the year when this is the easiest to achieve is during the Summer and Winter months. Some families wish to come for the entire Summer and others that want to have an extended stay here during the winter.
Hawaii investment properties can also benefit from the Airbnb effect.
Updated Feb 15, 2018
Without a doubt Airbnb is a big hit. As they venture into more and more areas around the globe, more news is written about the company. In real estate, it is showing a small but dramatic effect in my opinion. The platform has provided an incredibly easy way for people to manage their property as a Hawaii vacation rental. The short term market rents dramatically can increase an investment’s profitability.
I have clients visiting Hawaii to view properties that book Airbnb units. Other people I know rent properties out on Airbnb. The reports I receive on renting out properties in Hawaii on Airbnb are mostly positive. In general, I think people are excited about the possibilities of this platform for Hawaii investment properties.
In years past sites like VRBO and Homeaway seemed to dominate the space and now Airbnb is clearly taking over.
Hawaii investment properties such as Airbnb vaction rentals. Being aware of the market and local laws
Buying a Hawaii investment property in order to rent it out via Airbnb can bring in a higher return. There are many facets to consider in order to do so responsibly and understanding the associated risks.
1. Zoning in Hawaii.
If you have been around Hawaii for a while, you will become acquainted with how many properties seem to be chopped up and rented out separately. Many have turned a blind eye to this practice over the years because of our unbelievable housing shortage. It also goes back to how much real estate costs. From a homeowner’s stand point, if you can convert part of your home to a rental, it can mean affording a better home in a better location. For a tenant it can mean living in a better neighborhood for less cost. This symbiotic relationship has existed for decades across neighborhoods in Hawaii.
It is important to be aware that this frequently violates the zoning and building codes. Government officials and the neighbors have turned a blind eye to this because of the housing shortage. However, turn those extra units into an Airbnb that violates the zoning laws and if you have neighbors that are unhappy about it, watch out! George Atta, the new Director of the Department of Planning and Permitting has said he will crack down on illegal vacation rentals.
Therefore, make sure your property would not violate zoning laws or the building code. Most residential real estate in Hawaii allows for a 30-day minimum rental. There is nothing wrong with turning that home at Sunset Beach on Oahu’s North Shore into a short term rental on Airbnb, provided it is for 30 day periods.
2. Hawaii Condominiums:
Many condominium projects in Hawaii have instituted a minimum rental period. Some of the ones with the most teeth are the co-ops in Diamond Head. For example, the Diamond Head Apartments says that you can not rent the unit that you just purchased for at least a year after purchasing it. Then afterward there is 6-month minimum rental period.
People have tried to rent their units out quietly anyway and trying to not reveal which unit it actually is in the building. For some this has not worked out so well. Condos such as Kahala Beach Apartments actually has their assistant manager LOOK for illegal rentals online. Other building managers have reported to me that they have owners come to them and complaining that specific units are illegally renting out their units.
It is understandable to have the backlash because many of the owners do not want to feel like they are living in a hotel. As a contrast, there are some Hawaii condominium projects that openly flaunt the rules and because that is the condo’s culture, no one complains.
3. Hawaii State Laws:
There are 2 state laws to be aware of when renting out your Hawaii investment property on the short term. First is that rentals need to have a representative on-island. Either you need to be on island or you need to have someone on island for the tenant to contact in an emergency. Also, for short term rentals, the appropriate Transient Accommodation Tax number has to be shown on the rental ad. This is included on Airbnb. Transient Accommodation Taxes apply to any rental shorter than 6 months. So even if you rent by the month, then this number must be shown.
4. Hawaii Tourism Market:
Once relying on Airbnb income for your unit, owners are a bit at the whim of the tourism sector. This has had some bumps in the road in the past. The most notable one of late is when the Japan earthquake created a tsunami and the nuclear disaster at Fukushima. It was a sudden horrible shock to Japan and overnight, trips to Hawaii were canceled. Waikiki was empty. Economists expected to last for 9 months. We did see a meaningful recovery in about have that time. It is just to be aware that a short term rental can have much more risk that a long term tenant.
With all of these pitfalls, investors can still do well with buying Hawaii investment properties and renting them out on Airbnb. There is a way to do it legally and still do well. It is good to have good representation that can help show you what is or is not legal and the possibilities of earning money with a piece of real estate in Hawaii.
If you have a question about this article, Hawaii investment properties, Airbnb real estate investing, or looking for real estate in Hawaii, please do not hesitate to contact me at 808-394-9779 or use the form below. Mahalo!