Oahu Hawaii STR Investment

[Tinwin Wang]

Hi - I'm located in the bay area and am interested in purchasing an investment property in Hawaii (Primarily interested in Kailua or Kahala on Oahu, though am also interested in other areas or opportunities in Hawaii) and am interested in understanding the various STR rules and regulations there. As I understand, there are very few STR licenses that are granted and regulations were recently tightened. Does anyone have experience investing in purchasing property in Oahu and running it as an Airbnb and are able to share their thoughts on the process? Thanks in advance!

[David Rucker]

@Tinwin Wang

On Oahu, there are licenses (called NUCs or non-conforming use certificates) for legal rentals outside the resort zones in Waikiki, Turtle Bay and Ko Olina. These allow for rentals of less than 30 days.    You can look at the link below but as I recall there are only about 900-1000 or so of these, and maybe only 15%(?) or so outside of Waikiki.  So very limited numbers.   There will supposedly be new B&B licenses given out this year from October.    These will be restricted to owners living in the dwelling and renting out space, as well as restrictions on where the property is located.

The county has a list of all the NUCs here   http://www.honolulu.gov/dppstr/approved-strs.html

I am a realtor, and also own a legal STR. For a client looking for an investment property, I would have a discussion about what they want from the property and then help them evaluate their options based on their budget. For example, if they want a place they would frequently use, with resort amenities nearby but with rental income secondary, they might look at the resort area of Ko Olina (7- or 30-day rentals depending on the property). If they just want cash flow, then they might be better off to buy a true STR in a resort area of Waikiki. Both of these options would assume Hawaii tourism recovers in a reasonable amount of time so that the visitors return.

Message me if you would like to chat about those or the general market.