So You Want to Become a Maui Vacation Rental Owner, Now What? (Part 1)

January 2, 2018
Vacation Rental Owners

No Ka ‘Oi is an expression that locals use meaning “Maui is the best”.

We fully agree that Maui is like nowhere on earth. It is a special place that people fall in love and return for vacations year over year. 

From the white sand beaches in Wailea to surfing big waves along the north shore, or the horse speckled hills and lushness as you drive upcountry towards Haleakala crater, Maui is a top vacation travel destination. 

Maui has a balance of natural beauty and yet is full of activities including surfing, hiking, fishing, whale watching, shopping, and great dining. 

If you’ve visited Maui and thought “I should buy a vacation home here”, you’re definitely not alone. With over 8 million visitors each year in the Hawaiian Islands, there are plenty of tourists looking for accommodation all year long making it a desirable spot to own a vacation rental business.

Many people’s dream of owning and enjoying a Maui vacation home can be achieved by offering their home as a vacation rental. But, before you purchase a home and jump into the Maui vacation rental business, be sure you know all the facts and steps that you will need to take to turn your dream into a reality. 

Maui has a relatively strict permit process and it is required that you permit your home to be a legal vacation rental business. We have seen many new homeowners who were unfamiliar with the process back out of their vacation rental plans because of the costs and lengthy process.

To help you avoid the pitfalls of the permitting process, we interviewed permitting expert Tom Croly, who owns Dreams Come True on Maui Bed and Breakfast

He also acts as a consultant to those looking to achieve the same dream as he did with a permitted, legal vacation rental. Tom bought his Bed and Breakfast 12 years ago. Back then, if neighbors weren’t complaining, then it was fine to operate a vacation rental. 

After the arrival of a new mayor in 2006, there was a crackdown on illegal rentals. Tom saw a gap understanding regarding the process and viewed this as an opportunity to help others to legally permit their vacation rental. Tom advises owners to not be put off by the process and instead helps them to follow the correct steps so they can achieve their dream to own a Maui vacation home.

Follow along with this four-part series to learn what it takes to successfully become a Maui vacation rental owner. We’ll take you through step by step to ensure you have all the information you need to make a smart investment. 

To start, we asked Tom some general questions about starting the vacation rental buying process on Maui to see if there’s an easy way out in all of this.

Hawaii Chee: What is the easiest way to buy a permitted and legal vacation rental in Maui?

Tom: The absolute easiest route to take that ensures you’ll have a permitted vacation rental is buying a unit in a condo complex that is already designated as a vacation rental. In this scenario, you don’t even need to get a permit!

Hawaii Chee: What if my dream place isn’t in a complex that’s already designated as a vacation rental?

You’ll need to get a permit for your home to designate it as a legal vacation rental. What most people don’t know is that there are actually two types of vacation rental permits: A bed and breakfast permit and a short term rental home (STRH) permit.

Hawaii Chee: What’s the difference between a short term rental home permit and a bed and breakfast permit?

Tom: A bed and breakfast permit requires that the owner live full-time on the property where they may be permitted to rent up to six bedrooms either in the house where they live or in another dwelling on the same property. 

Since you can’t live in two places at once, you can only have one bed and breakfast permit. On the other hand, short term rental home (STRH) permits allow an individual to own a second home on Maui and rent it out when they are not using it. 

This type of permit requires that the owner employ a licensed real estate agent on Maui to manage the rental. 

The permit has to be in the name of a real person (not a corporation) and an individual can only have one STRH permit.

Hawaii Chee: What are some factors to consider when starting the vacation rental permitting process?

Tom: Your property must have been built with all proper building and zoning permit approvals before you can even apply for a permit. 

The permitting process will take anywhere from four to six months to complete, and during that time you are not allowed to rent your home out at all. 

If you are taking care of your application on your own, you should expect to spent between $2000-$3000. That cost will likely double if you have a consultant like Tom assist you in this process. It costs $650 for the application alone, $375 for a home inspection, and additional payment for postage to notify neighbors of your application. 

After you’ve submitted your application, other factors can influence whether you are able to receive a permit or not including your neighbors, land zoning laws, and home safety inspections. 

In the next post, we will dive into some of the most important factors to consider when buying your Maui vacation rental.

Pris Lee

Aloha! I'm Pris and I am the head of marketing at Hawaii Chee. I'm quite partial to a good cup of coffee, hiking and horse back riding along the beach. And chocolate. Always chocolate...

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