Four Things You Should Know Before Buying a Vacation Rental on MauiApril 15, 2016, 9:52 AM HST · Updated May 2, 8:16 AM 1 Comment
According to a National Association of Realtors survey, an estimated 1.13 million vacation homes were sold in the US in the last year.
If you’re considering ownership of a Maui vacation home that will also serve as an investment property, there are four things you should know before buying.
1. If you’re buying a Maui vacation home and plan to rent it out when you’re not on Maui, make sure you have the financial backing to care for the property without the income from the rental.
The good news is that buying any kind of property on Maui is a great investment—just make sure you have all your financial ducks in a row.
2. You also want to choose a property in a community that can be permitted as a vacation rental. In Maui County, vacation rentals fall into three categories: Permitted Bed & Breakfast Homes, Permitted Transient Vacation Rentals and Permitted Short Term Rental Homes. Not all homes on Maui can be used as legal vacation rentals, and Maui’s Short-Term Rental Home (STRH) permits can be tricky to acquire.
An approved Maui vacation rental permit is based on a community plan by region (pursuant to subsection 19.65.030.R Maui County Code), Maui County Code Zoning and abiding by Maui Planning Department restrictions, standards, sign requirements, boundaries and inspections—to name a few. For more information about applications, go online.
3. Buy a home that can be rented frequently to cover expenses. On Maui, visitors want convenience, beautiful year-round weather and a property that isn’t too far away from beach life.
Think about choosing a property that’s not too far from restaurants, grocery stores, banks, gas stations and other vacation conveniences.
For example, if you buy a vacation rental in Kā‘anapali, you will surely rent it more frequently than a vacation property in Huelo. You will still get renters at a Huelo vacation home, but not as often, because the typical visitor wants to stay near activities and popular things to do in Maui. Pending property location, you may not always be able to get the top rental dollar that you’re looking for.
4. Assess all costs of owning a Maui vacation rental beforehand. Be realistic about the possible rental income profits after calculating costs. Purchase price is one thing, but then there are many more costs to consider: permit fees, condo or HOA fees; resort rental program fees; utilities; maintenance costs; security; property taxes; insurance; professional photography; advertising (something like VRBO); property management fees; furnishing the home (also consider adding activity items like ocean sports equipment); and professional cleaning services between renters.
Mahalo for reading Maui Now’s “Four Things to Know Before Buying a Vacation Rental on Maui.” What additional tips do you have about owning a vacation rental in Maui? Please let us know your thoughts in the comment section below…