Here is what you need to know about the Big Island Vacation Rental Bill. Vacation rentals have become popular on the Big Island. They are often less expensive than hotels or resorts, and they come fully equipped with everything you need to enjoy your stay. The big websites to book vacation rentals are VRBO.com/Homeaway.com and airbnb.com.
Hawaii Appleseed Center for Law and Economic Justice reports that one out of every twenty-four homes in Hawaii is a vacation rental, a number that has been increasing over the past few years. The report also says the amount of vacation rentals is leading to less affordable housing in Hawaii.
This bill proposed is not taking aim at homes in resort zoned neighborhoods. Instead, it is taking aim at homes in residential or agricultural zoned neighborhoods. Many homeowners in these residential and agricultural neighborhoods either visit the island part time and vacation rental it when they are off island to supplement their income or bought the home as an investment and vacation rental it to cover their costs associated with ownership.
Many local residents take issue with the vast amount of vacation rentals due to the lack of affordable housing. They feel the vacation rentals take even more rentals off the market, which makes it harder for locals to afford to live here. In addition, some of these vacation rentals are not claiming they are vacation rentals and thus are not paying the required taxes associated with renting one’s property. These are some of the reasons the Big Island has proposed restrictions for vacation rentals.
So what exactly will these restrictions be? These restrictions are for vacation rentals outside of resort zoned areas. They will not apply to owner-occupied units that rent out a portion of the property. In approved zones, owners will simply have to register as a vacation rental. In non-approved zones, existing vacation rentals who have been diligently paying their taxes may be grandfathered in by applying for a non-conforming use certificate and for some a special permit from the state. If you have not been paying taxes, you likely will be unable to have a vacation rental in non-approved zones, if this bill should pass.
The bottom line? If you want to short term vacation rental, you should start now, before the bill passes, and pay your GET and transient taxes. This is your best chance at being grandfathered in. Even if this bill doesn’t pass, restrictions on vacation rentals will likely increase in the future, so be sure you are following local laws and paying the required taxes. Always pay attention to the zoning laws and any CC&Rs in your neighborhood to be sure you are complying with any restrictions or requirements.
If you are looking for a property manager to treat your home as their own and to maximize rentals, please reach out to us at Lokahi Properties and see how we can make your investment truly pay off for you.
Many people who have built a significant amount of equity in their primary residences have found the stock market doesn't provide anywhere near the returns they could make when buying investment properties or vacation homes.
Vacation homes are especially popular here in Hawaii. They allow families a great place to visit during the year and produce great income for you the rest of the year while you are not enjoying your home for yourself.
While buying a vacation property is typically the same as buying your primary residence, you might want to consider visiting and spending an extended period of time in the area were you’re looking to purchase so you can get a feel for the local market and also to see what it’s like to live there.
No matter where you choose to purchase a vacation home, some of the best spots are found near water. Here in Kona, there are many great areas with vacation rentals and many opportunities for you to find that perfect rental.
Most vacation homes are purchased with the idea in mind to rent the property while it’s not a use by its owners. This is a great way to afford a vacation home, but be sure to consider who is going to manage the property when you’re not there. If you’re going to employ a management company, you should expect to pay some type of fee for this service, so this needs to be factored into your expenses. Lokahi Properties offers full service management along with partial management options for those who want to maintain some of the management duties, such as bookings, for themselves. We will work with you to create the perfect management solution for your needs.
All in all, a vacation home can be a great getaway for you and your family to enjoy while earning income when you are not there. Be sure to reach out to us at Lokahi Properties for personalized property management services for your vacation home or for help finding your perfect income producing property.