Maui is globally renowned for a long list of marvelous attributes. World-class white-sand beaches? Check. Extraordinary vistas of outlying islands? Check again. Several of the world’s most stunning golf courses, eclectic, award-winning cuisine, high-end shopping, and exquisite resorts? Definitely. An island that occasionally sees snow on the behemoth that is Haleakala, possesses one of the most enchanting rainforests on the planet, and features Peahi, one of the largest waves to ever be surfed in history, in its backyard? Oh yes. The island of Maui has long had the second-highest rate of tourism in Hawaii for reasons that could go on.
Given its attractiveness from all sides of the coin — for residents, visitors, and investors — it might have popped up as the ideal place to invest in a vacation rental. The reasons for this are just as impressive. Maui sees an average of more than 66,000 visitors per day. Airbnbs and Vrbos are highly attractive to young families, college kids on Spring Break, and multi-generational vacationers who want to relish the island but also have the conveniences of a fully-equipped kitchen and the ease of laundering their clothes.
Real estate is, however, a substantial financial investment, and it’s vital to know precisely what you’re getting into before pulling the proverbial trigger. If you’re playing with the notion of purchasing a Maui vacation rental, read on for West Maui realtor Jeff Onderko’s guide on what you should know before doing so.
Search for condominium complexes or homes that have a strong rental history
Maui is home to hundreds of condominium complexes, villas, and vacation properties, but not all are created equal. Owning a rental property on the isthmus — such as in Wailuku and Kahului — will not have the universal and incredible allure of properties situated on the sun-drenched and resort-filled leeward side of the island, which includes Makena, Wailea, Kihei, Maalaea, Lahaina, Kaanapali, Napili, and Kapalua. These far more coveted vacation destinations also house condominiums that can range wildly in terms of their desirability.
A run-down condominium in North Kihei will be much less attractive to vacationers who want a wonderful experience and immaculate accommodations and will likely choose South Kihei, Wailea, or the West Side, even if it comes at a higher price. An exceptional real estate agent will be able to steer you toward properties that have a strong rental history to ensure your investment is consistently booked and pull you in a return on your investment. You may also want to get to know the island and its different forms of lodging before narrowing down your search and moving forward with putting in a purchase offer.
Not all properties can be legally rented to vacationers
Maui vacation rentals have been under increased scrutiny partly because some homeowners in strictly residential neighborhoods used their homes as vacation rentals. Others rented their residences illegally. Now, properties are divided into three distinct types: Transient Vacation Rentals, Short Term Rental Homes, and Bed & Breakfasts. These require permits, which can be challenging to obtain, partly because it is subjected to the Maui Planning Department’s list of rules, regulations, and requirements. Again, a real estate agent can help you navigate this — and point you directly toward properties that can legitimately be used as rentals.
Secure a property manager and other professionals
Unless you live on the island— and, even then, you may want to streamline your business by enlisting an expert — you will have to hire a property manager to handle the daily demands of rental properties: from vacationers who misplaced their key (or lost the key code) and problems within the rental (you may be surprised by the number of renters who call about tropical insects!) to managing your reservations and ensuring your rental is in pristine shape before the next wave of renters arrives. Similarly, you will also need to have a trusted handyman you can call during emergencies, a team of house cleaners, and, in most cases, a financial expert to assist with your taxes, and a real estate attorney in case of liabilities. A property manager typically charges 30% of commissions, which can add up quickly. In other words, ensure you have woven the cost of experts into your financial strategy before proceeding with your purchase.
Insure against damages
From bachelors celebrating their buddy’s upcoming nuptials to messes inadvertently created by toddlers, your rental property may encounter damage ranging from minor to major. As a renter on sites such as Airbnb, you may have the ability to select some renters over others to safeguard your property, but restrictions surrounding discrimination are constantly evolving. Understanding ahead of time that you will need to be prepared to do a fair amount of upkeep and repairs can help ensure you plan for this in your financial strategy; it will also save you some heartache.
Renters want convenience
Purchasing a vacation rental near the beach should be your top priority to safeguard you against having persistently low occupancy. Maui’s beaches, after all, are the primary reason people visit the island. Further, purchasing a vacation rental that is within walking distance of restaurants, bars, and shops will increase its desirability — particularly for those who eschew renting a car, especially during times when the island sees a dire shortage of rental cars. For a street-legal golf cart experience on Maui (and now Oahu), visit Island EV Rentals for their options of 4 & 6-seat electric-powered golf carts.
Ready to invest in Maui properties?
Intrigued by the idea of purchasing a rental property? Maui is unquestionably one of the top places in the world to invest in one. The key to ensuring your investment will earn a profit is to work with a highly knowledgeable real estate agent who understands the nuances of the vacation rental market and Maui’s tourism trends.
Jeff Onderko is one such realtor. Based on the island’s West Side, which is home to an abundance of rental properties (including Kapalua luxury homes and Lahaina properties), he can guide you toward the most lucrative prospects — all while guaranteeing you a satisfying, relaxing, and terrific experience.
