STR in Hawaii

Honolulu, Hawaii
Short-Term & Vacation Rental Discussions
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STR in Hawaii

Makani Donaldson
Member since 2024 · 13 posts · 6 votes

Aloha everyone, I just started my interest in real estate this past summer and just have been listening to podcasts and what not while I can. I’ve been looking through the forums and haven’t found what I’m looking for. Maybe someone can help!🤙 as we all know buying here in Hawaii is very expensive at least for a property. I’ve been scanning the market and come to understand as my first investment I’ll probably have to find an apartment/condo something like that and I typically hear of STRs typically making more cash flow etc. Ik that here in Hawaii, there’s a few laws on STRs and I’ve been trying to understand but it’s difficult to decipher. My questions are

1. Is Hawaii able to have a profitable STR despite a few of these laws?

2. Is someone able to explain any of these laws so that I might be able to understand?

3. Is STRs the way to go in Hawaii or maybe just traditional LTRs instead? 

Mahalo to any feedback given🤙

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Most Popular Reply

Bryan Vukelich
Real Estate Broker · Kaneohe, HI · Member since 2020 · 193 posts · 163 votes
1y

Aloha @Makani Donaldson and mahalo @Andrew Steffens for the shout out. Makani, please see my answers to your questions below.  If you have any other questions, you are welcome to contact me any time. 

But to be clear, I am serve the O'ahu market but have had clients have me help them look for property on other islands. Also, please note, there are many nuances about the STR market on O'ahu so this is a brief overview. Oftentimes my initial consultation call with a potential client runs 1 hr and that still doesn't give me enough time to cover everything about the STR market on O'ahu.

1.  Yes, I have investors actively buying STRS on O'ahu at this time and they are planning to make money off of these investments.  

2. Unless a property has a non-conforming use permit (NUC), there are only 4 areas on O'ahu that you can legally do STRS. Waikiki area (however there are a couple STR buildings outside Waikiki), Turtle Bay (North Shore), Ko'olina (Westside) and Cottages at Mauna'olu Estates.

For the 30 day rental minimum. For non-STR properties, last year the Honolulu mayor and city council tried to change the 30 day minimum to 90 days. The regulation was ruled illegal and a permanent injunction was issued. However, the injunction only pertains to property owners who were doing 30 day rentals prior to the gov't trying to change the minimum to 90 days. This year, the State Legislature gave all counties the authority to change STR's laws however they see fit. Thus, there is now a possibility that Honolulu County will change the minimum rental period (for non STR properties) to 90 days. So at the moment, if you buy a property now and operate it as a 30 day rental, owners are not having any problems with the gov't. But if they gov't changes to a 90 day minimum, you would have to operate as a 90 day rental or longer.

And talking to local experts, if you want to own a STR on O'ahu, your safest bet is to buy a unit in a Condotel that is located in the "Resort" zone of Waikiki. These buildings are:

Bamboo

Ilikai 

Ka'lahi (Formerly Trump)

Pacific Monarch

Palms At Waikiki 

Regency At Beachwalk 

Ritz

Waikiki Grand

Please note, there are other condotels located outside the Waikiki Resort Area.  

3. I do not know of any of my STR clients who regret buying on O'ahu. They all seem very pleased and some have bought more units on O'ahu and I know others hope to buy more if the opportunity arises. However, I am seeing more interest in MTR's and have a colleague that does well buying condos and renting out to traveling medical workers and foreign exchange students. My company also offers premier vacation rental management services as we recently expanded our services to MTRs because of the apparent need for management services in the sector.

Happy New Year and if you need any assistance acquiring property on O'ahu, contact me at any time - I am here to serve you.  

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    1y
    Quote from @Makani Donaldson:

    From what I understand, different islands or cities have different rules, and they are getting stricter. I started staying on the North Shore of Oahu back in 2005, and it was easy to find a STR. My last visit was in 2021 and owners were limited to one guest per month. In my case, I rented for one week in July and one week in August, so the owner technically shouldn't have any more guests for either of those months. I've also heard of requirements to own for at least one year before you can use the home as a STR.

    Hawaii is a leftist state that doesn't protect private property rights. They are more concerned about protecting the hotels. I believe Hawaii will continue regulating STR and it will be harder to make the numbers work. If you choose to move forward, I recommend having a backup plan in case Hawaii outright bans STR.

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  • Michael BorgerPro Member
    Rehabber · San Diego, CA · Member since 2010 · 500 posts · 208 votes
    1y

    You have to find the areas that are either zoned for Hotel and Resort or have NUCs (non-conforming use) certificates. On Oahu, that will mostly put you in Waikiki. I was on island earlier in the month for an eviction trial and stayed at the Waikiki Banyan for a few nights - that seems to be a popular STR building. For last year's eviction trial (seems to be a recurring theme for me - three years in a row!), I stayed in the Waikiki Sunset which was also fine.

    You just have to run your numbers like any other deal. Be conservative because demand can go up or down at any time as can the laws -- a good general rule of thumb for STR is to make sure it still makes sense as an LTR. I had a STR in another market get shut down by zoning, so I put construction workers in there on a 30+day stay over the summer and now have a MTR tenant to keep the lights on through May after which I'll sell since I have no guarantee on having another 30+day contract next summer.

    0Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    1y

    @Bryan Vukelich can maybe help you!

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  • Bryan Vukelich
    Real Estate Broker · Kaneohe, HI · Member since 2020 · 193 posts · 163 votes
    1y

    Aloha @Makani Donaldson and mahalo @Andrew Steffens for the shout out. Makani, please see my answers to your questions below.  If you have any other questions, you are welcome to contact me any time. 

    But to be clear, I am serve the O'ahu market but have had clients have me help them look for property on other islands. Also, please note, there are many nuances about the STR market on O'ahu so this is a brief overview. Oftentimes my initial consultation call with a potential client runs 1 hr and that still doesn't give me enough time to cover everything about the STR market on O'ahu.

    1.  Yes, I have investors actively buying STRS on O'ahu at this time and they are planning to make money off of these investments.  

    2. Unless a property has a non-conforming use permit (NUC), there are only 4 areas on O'ahu that you can legally do STRS. Waikiki area (however there are a couple STR buildings outside Waikiki), Turtle Bay (North Shore), Ko'olina (Westside) and Cottages at Mauna'olu Estates.

    For the 30 day rental minimum. For non-STR properties, last year the Honolulu mayor and city council tried to change the 30 day minimum to 90 days. The regulation was ruled illegal and a permanent injunction was issued. However, the injunction only pertains to property owners who were doing 30 day rentals prior to the gov't trying to change the minimum to 90 days. This year, the State Legislature gave all counties the authority to change STR's laws however they see fit. Thus, there is now a possibility that Honolulu County will change the minimum rental period (for non STR properties) to 90 days. So at the moment, if you buy a property now and operate it as a 30 day rental, owners are not having any problems with the gov't. But if they gov't changes to a 90 day minimum, you would have to operate as a 90 day rental or longer.

    And talking to local experts, if you want to own a STR on O'ahu, your safest bet is to buy a unit in a Condotel that is located in the "Resort" zone of Waikiki. These buildings are:

    Bamboo

    Ilikai 

    Ka'lahi (Formerly Trump)

    Pacific Monarch

    Palms At Waikiki 

    Regency At Beachwalk 

    Ritz

    Waikiki Grand

    Please note, there are other condotels located outside the Waikiki Resort Area.  

    3. I do not know of any of my STR clients who regret buying on O'ahu. They all seem very pleased and some have bought more units on O'ahu and I know others hope to buy more if the opportunity arises. However, I am seeing more interest in MTR's and have a colleague that does well buying condos and renting out to traveling medical workers and foreign exchange students. My company also offers premier vacation rental management services as we recently expanded our services to MTRs because of the apparent need for management services in the sector.

    Happy New Year and if you need any assistance acquiring property on O'ahu, contact me at any time - I am here to serve you.  

    3Reply
  • Joseph LambertBusiness Member
    Realtor · Waikoloa, HI · Member since 2023 · 21 posts · 14 votes
    1y

    Aloha Makani!

    The previous reply about the Islands being different is accurate, as each County does have different rules.  Do you want to buy on Oahu, or any Island?  Over here on Big Island where I am, it is different than Oahu.  Over here, as long as the condo is in the Vacation Zone, and then also the Condo Association allows STVR, then you can have an STVR.  https://www.planning.hawaiicounty.gov/resources/short-term-v... has the details.

    So with that said, I have had several clients purchase STVRs and have great success.  But that also depends on your down payment- putting only around 20-25% down is hard to have a profitable STVR.

    Ultimately with STR v LTR, I'd be mainly curious about your intended use of the property. Do you want to occupy it a couple weeks a year? Or is it purely an investment? If it is purely and investment, then a LTR is a very viable option, as there is good demand for LTR. Your PM fees for LTR will be more in the 10-12% range, while for STR it is more in the 25-30% range (and don't forget about GET/TAT). But if you want to use it, then an STR may be your preference- but to be profitable, you would need to have a large down payment.

    Aloha for now!

    -Joe

    [email protected]808-782-4386
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    0Reply
  • Loren Clive
    Residential Real Estate Broker · Paia, HI · Member since 2016 · 479 posts · 311 votes
    1y

    Which island are you buying on? I can help you on Maui. 

    your realtor should be able to answer all of these questions

    0Reply
  • Mark Waite
    Real Estate Broker · Wailea, HI · Member since 2016 · 134 posts · 77 votes
    1y
    Makani, there has been some good info shared by other Hawaii realtors. If you cull anything from the feedback, it is that each county (there are four in Hawaii) regulate STRs differently.

    I'm on Maui where if you are looking at STRs, you're going to be looking at condos. You cannot even apply for an STR permit on a single family home until after you've owned it for five years (and there is no guarantee you will get the permit). The good thing about condos is that no permits are required; you only need to ensure that county zoning and HOA allow for it. BTW, you can do an LTR on any property - house or condo - without applying for a permit.

    In the right location, you should expect to see at least a 2x return on an STR as opposed to an LTR. Again, depends upon location.
    0Reply
  • Caroline Neubauer
    Realtor · Maui, HI · Member since 2020 · 11 posts · 5 votes
    1y

    Aloha Makani, 

    There is some great feedback on here. Are you on O'ahu and trying to invest in your "backyard?" What is your motivation for an STR and the Hawai'i market? Are you looking at self managing or putting into a management company? Are you looking to finance and how much are you wanting to put down (upwards of 30%)? Those are some factors that will determine your returns. Congratulations on looking to invest and putting capital to work! :) Aloha, Caroline

    0Reply
  • Daniel Kam
    Member since 2025 · 1 post · 0 votes
    1y
    Quote from @Bryan Vukelich:

    Aloha @Makani Donaldson and mahalo @Andrew Steffens for the shout out. Makani, please see my answers to your questions below.  If you have any other questions, you are welcome to contact me any time. 

    But to be clear, I am serve the O'ahu market but have had clients have me help them look for property on other islands. Also, please note, there are many nuances about the STR market on O'ahu so this is a brief overview. Oftentimes my initial consultation call with a potential client runs 1 hr and that still doesn't give me enough time to cover everything about the STR market on O'ahu.

    1.  Yes, I have investors actively buying STRS on O'ahu at this time and they are planning to make money off of these investments.  

    2. Unless a property has a non-conforming use permit (NUC), there are only 4 areas on O'ahu that you can legally do STRS. Waikiki area (however there are a couple STR buildings outside Waikiki), Turtle Bay (North Shore), Ko'olina (Westside) and Cottages at Mauna'olu Estates.

    For the 30 day rental minimum. For non-STR properties, last year the Honolulu mayor and city council tried to change the 30 day minimum to 90 days. The regulation was ruled illegal and a permanent injunction was issued. However, the injunction only pertains to property owners who were doing 30 day rentals prior to the gov't trying to change the minimum to 90 days. This year, the State Legislature gave all counties the authority to change STR's laws however they see fit. Thus, there is now a possibility that Honolulu County will change the minimum rental period (for non STR properties) to 90 days. So at the moment, if you buy a property now and operate it as a 30 day rental, owners are not having any problems with the gov't. But if they gov't changes to a 90 day minimum, you would have to operate as a 90 day rental or longer.

    And talking to local experts, if you want to own a STR on O'ahu, your safest bet is to buy a unit in a Condotel that is located in the "Resort" zone of Waikiki. These buildings are:

    Bamboo

    Ilikai 

    Ka'lahi (Formerly Trump)

    Pacific Monarch

    Palms At Waikiki 

    Regency At Beachwalk 

    Ritz

    Waikiki Grand

    Please note, there are other condotels located outside the Waikiki Resort Area.  

    3. I do not know of any of my STR clients who regret buying on O'ahu. They all seem very pleased and some have bought more units on O'ahu and I know others hope to buy more if the opportunity arises. However, I am seeing more interest in MTR's and have a colleague that does well buying condos and renting out to traveling medical workers and foreign exchange students. My company also offers premier vacation rental management services as we recently expanded our services to MTRs because of the apparent need for management services in the sector.

    Happy New Year and if you need any assistance acquiring property on O'ahu, contact me at any time - I am here to serve you.  

    Thanks for your insight! I recently purchased a condo in kakaako, but i need to leave back to the mainland and want to rent out long term, over 30-90 days, not STR. But i still want to list on platforms like VRBO/ABNB. They require a TAT license, but the govt seems to only deal with STRs…can you advise how to get a TAT license for me to list as a long term rental? Thank you!
    0Reply
  • Bryan Vukelich
    Real Estate Broker · Kaneohe, HI · Member since 2020 · 193 posts · 163 votes
    1y

    Aloha @Daniel Kam - most of Kakaako has a 180 day rental minimum, so if you haven't checked with your building association, I recommend you verify what the minimum rental period is for your building.

    If you are allowed to rent for less than 180 days, you will then need to apply for a GET license, and well as TAT/OTAT and pay the appropriate taxes on a regular basis.  You will first need to apply for the GET license, and then you can apply for TAT/OTAT.  

    To apply for GET, you will need to fill out Form BB-1.  You can easily find this online but I will message you directly with some additional info. 

    And if you are need of MTR management services, my company, Island Stays Hawaii, provides premier STR and MTR management services.

    If you have any other questions, contact me at any time. 

    Aloha 

    1Reply
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