I'll be converting and managing my grandma's house in Palolo Valley (Oahu, HI) into an Airbnb. I believe the location has a lot of potential in that it is close to Waikiki and maybe even more important, in close proximity to University of Hawaii. I say this because in Hawaii you cannot have a Short-term VR without a non-conforming use certificate, which hasn't been issued since the late 80's (bogus politics in part of the big hotel lobbyists). That being said, there is a way around this (sorta)...you can legally run an Airbnb as long as it's 30 days or longer at which point it wouldn't be considered a short-term rental. This would bring me back to why UofH would possibly be of greater importance in that working professionals or professors w/ longer tenures would be more likely to fulfill the 30days as opposed to the 1 weeker tourist from Waikiki. I know..sucks, right? One would think that, but I've been managing AirBnB's in Santa Monica, CA which mind you has the same regulation and it hasn't stopped occupancy from happening! On the contrary, because of the stays being 1 month or even in a very special case 1 year long, the work load is decreased due to far less turn over. In this "long-term" situation it's not uncommon for guests to stay 2-3 months at a time and this is all at a short-term rate (potentially double what you'd get in an annual lease type agreement).
I've tried to evaluate why these units in Santa Monica have been working so well amidst the regulations and I came up with this:
1. SFH w/ backyards.
Families love it and finding one in Santa Monica is increasingly becoming harder to find. As an owner it's also a plus not to have to deal with HOA's or temperamental neighbors.
2. Location.
This is obvious and possibly one of the more important factors. Santa Monica beach/ pier attracts millions of visitors every year, but it's not just a tourist destination. It's a place thriving with fresh up and coming businesses, schools (SMC, UCLA) and hospitals (Ronald Reagan, St Johns, etc). Let's not get it twisted though, the beach is in walking distance so that helps too, ha!
3. Type of demographic due to location
I've had a stage crew company, parents visiting kids going to UCLA, a group of engineers for a tech company, an investor on business who brought his family along. Working professionals and families of business men / women. These are the type of ppl that need a place to stay a month or longer and don't want to cough up more @ a hotel.
Btw, if ever staying a month in Santa Monica always book 31 days as you will get charged what is called a TOT or transient occupancy tax, which is a whopping 14% in SM! Yes, you would literally pay 14% more just for booking 30 days instead of 31. I love how a difference of a day defines a person as a transient. Good stuff.
In the end, I'm all for Airbnb and the VR niche! I've seen massive gains even despite the heavier upfront costs and the increased involvement if self-managing. I would gladly take this on than be confined to a 9-5 (that's just me, of course).
🙏🏽🤙🏽
Laine
