Considering a Hawaii Vacation Rental?

First off -- what is your goal? Is it to have a place for your and your family to enjoy off-season and you want to offset as much cost as possible or is it pure investment? That will dictate a lot of the choices.

If you're not going to be there most of the time, you may want to focus on condos. While a lot of people complain about them (and a crappy condo association is a nightmare), knowing that your place is relatively secure and the exterior & grounds properly maintained is a real comfort. Single-family homes that sit empty will get broken into.

Of course, make sure that the condo association rules and bylaws allow short-term rentals -- not all do. Finding condos in the same complex on VRBO or FlipKey is a good clue but don't consider absolute verification. Believe it or not, people WILL put their place out on VRBO hoping to not get caught and try to skate along until they are shut down. Better to be legal from Day One.

Unless its what you want for your family during your time there, very high-end properties are less than optimal for vacation rental. They will get a rate roughly proportional to their purchase price (for example, a million dollar place will probably rent for around twice the nightly rate of a half-million dollar place, or 4x the rate of a $250,000 place), but the possible pool of renters will simply be smaller. Personally, when I'm traveling, I don't spend a lot of time in my room -- so spending $300-500 a night is not something I do. And I'm pretty sure a lot of people feel that way.

Hawaii is seasonal. Don't let anyone tell you otherwise. Certain places are more seasonal than others (for example, we have places we manage on Maui and they generate about 60% of their annual income during the 3 months of January - March). Kona is not THAT seasonal, but it is seasonal. Set your rates to match the seasons. January - March is high, followed by a couple of slower months, June - August is decent but not as high as winter. September sucks -- everywhere in Hawaii, September sucks. Then the late fall leading into the holidays is kind of like spring (not great, not horrible).

A decent pool is pretty much required. You wouldn't think it with the ocean right there, but especially parents with younger kids like the security and safety of a pool at least part of the time. Since most condos don't allow grilling on the lanais, communal grills are nice.

View is almost essential. People want to see the ocean. Being able to hear it is a plus. Even if the ocean view is a little more distant, its better to have a small one than none -- and people will pay more for it. Not like $50 a night more, but $10-20 a night adds up.

Walking distance to anything is a plus. Remember, its not uncommon for people to have been drinking beer much of the day while laying on the beach. Make it easy on them to get dinner, snacks, whatever - and make it easier on everyone else too.

People are neurotic about bathrooms. Either buy a place with great bathrooms or plan to remodel them immediately. We always took pictures of bedrooms and kitchens and living rooms and dining rooms and grounds -- and damn near everyone emailed to ask us to "send pictures of the bathrooms". Nice kitchens, nice bathrooms -- essentials.