Vacation Rentals in Maui

If you are considering investing in property on Maui for the purpose of setting up a short term vacation rental, there are a handful of pros and cons to the idea that you need to be made aware of.

Ashley Halligan has compiled a list of four Risks and four Rewards one can expect from owning a vacation rental, with Hidden Costs, Competition, Restrictions, and Community Risks as being the Risks of the venture, while Income, Preservation, Tax Breaks, and Community Rewards are some of the Rewards of owning short term vacation property. (A short-term rental is a specially permitted home or condominium with no more than six rooms and located in districts that are not assigned by the county for hotels or resorts.)

Hidden costs, like maintenance and utilities, of owning a short term vacation rental property can add up, and those costs can go even higher if you supply such amenities as housecleaning and toiletries. Add on taxes, insurance and other standard fees, and without proper planning, you could be looking at a financial drain. However, short term vacation rentals can also bring in a lot of money in a very short period, sometimes up to 25% of the mortgage cost in a single night’s rental. While this is probably not the norm, it is certainly a possibility and could easily offset hidden costs and times when rentals are not as frequent.

Knowing the competition and the limits the community will allow with respects to the number of short term vacation units allowed in a particular area will save a lot of hassle and problems down the road. Some communities are in the process of passing regulations to limit, or simply stop, further short term rentals. Be certain to look into the rules on the table for the community you’re thinking of buying into before you do so and find yourself stuck with a business plan that you cannot get licensed. While some communities do not want more rentals units available, other communities welcome them with open arms, as they know such units promote local tourism, and tourist dollars are always a welcome income.

Be diligent in your research and you will find a short term vacation rental business venture on Maui to be both worthwhile and rewarding.