I have several long term rentals and several vacation rental on Oahu for many years which all are do good but now my wife wants to move to a less crowd island with in a couple of years. I would like to hear from owner of rental properties or real estate/ property managers on Kauai and Maui about the rental markets. I know the vacation rentals will need to be permitted or in zoned areas. I also know that vacation rentals are a lot more work and cost more to buy. I will be doing 1031 exchanges which I have already done a dozen of in the past.
Happy Thanksgiving Tommy,
I'm over on Maui and can share a bit on the market here. Vacation rental condos are driven by what the association documents permit along with the zoning use of the property. Residential properties require any new owner to go through the permit application process for a TVR (transient vacation rental) permit. TVR permits are further limited by caps set by the county for the maximum number of TVR permits they will issue and further more by areas (for example, Maui Meadows is allowed five and is capped out). Also, TVR permits are not transferrable so, as a new owner, you would have to go through the application process.
On the south side (Kihei/Wailea) where I live, the rental market is strong, especially if you search in south Kihei and Wailea. You can get higher occupancy rates and nightly rates. There are some good options on the west side as well but a lot more to choose from if you are a visitor.
Happy to chat more off-line if you want.
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Tommy, the vacation rental occupancy rates on Maui mirror hotel occupancy rates 70-80%. Basically the county zones certain complexes for vacation rental, no permit needed, or you can try to get a permit from the County to vacation rent elsewhere which takes six months and several thousand dollars. Not worth the hassle in my opinion. I'm a broker and real estate investor who owns one vacation rental in Kihei and a bunch of long-term rentals all over on Maui.
For the vacation rental, I self-manage via AirBnb and employ an excellent housekeeper who keeps my rental in top shape, no complaints. Yes, the vacation rental is more work in terms of housekeeping and frivolous complaints, but you make like double the rent so it's worth it. The long-term rentals do very well too, and to be honest I prefer them.
Anyhow happy to share more info privately.
As @Mark Waite mentioned above, South Maui is a great area for vacation rentals. We own two VRs in the South Maui area and have had great success and are in the process of adding more. Most of your condo complexes here are zoned to allow short term rentals so there are many options to choose from.
As @Loren Clive mentioned, the permit process for a non-zoned property is a pain in the ***. We've looked at a few houses w/ ohanas and could get the numbers to work, but the permit process really makes it difficult and adds a lot more risk to your investment. So for at least the fist 6 months you can not rent your property short term nor can you even market your property during that time. There are legal ways to go through the process if the property is already permitted and possibly market and rent your property from day one, but again, this is just too much risk for our taste which is why we've continued to look at condos that are already zoned to allow STRs.
Please feel free to message me if you have any questions as I'll be happy to help out and share our experiences with you.
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