First step - research short-term rental regulations there. "On Kauai, it's illegal to have new vacation rentals in most communities, and Kollar also wants homeowners to be aware of the consequences." https://www.hawaiinewsnow.com/2018/10/24/kauai-residents-receive-enticing-letters-list-homes-short-term-vacation-rentals…
Kaui is a great market. It's important to become totally familiar with State requirements and also County requirements for STRs. As a starting point 1)make absolutely sure County zoning permits STR's in the area you target - all the Counties are cracking down on illegal STRs - and 2)you MUST have (i.e. required by the State) a local, on-island contact for your guests who can handle whatever comes up.
From an operational perspective you will want to be comfortable you can either assemble a good team for repairs and cleaning or your business model supports hiring a PM company to handle those aspects (tend to charge a lot). If you select a PM, target one whose standard service fits your needs/expectations. If you require anything unique or different than they offer it's unlikely they will meet your expectations on an on-going basis.
Lastly, to u0999's point, be prepared for stress every Spring during the legislative session. Every year (no exaggeration) multiple bills are proposed that would significantly raise regulation of STRs. Some constituencies try to leverage these to effectively end the STR business.
I hope my operational model will allow me to self manage as much as possible in order to avoid high PM costs.
I hope to get some feedback from mainlanders who are doing what I plan on doing with respect to self managing.
I have done research with respect to STR regulations. Kauai regs dictate that any STR home be located in a 'VDA" zone ( vacation destination area).
The county has a list of qualified properties. Most of the VDA properties are located near the shoreline and away from residential areas.
Most municipalities nationwide are starting to draft and implement STR regulations and many are teaming up with host compliance companies such as STRhelper or hostcompliance to help enforce, track, and monitor STR properties.
We used to do what you aspire to do, as mainlanders. The good news is it definitely possible to do, and do well.
Sounds like you've gotten a grip on where to focus, and you'll obviously do your market research to understand pricing, occupancy, etc. After that it's all about assembling your team, just like for your Colorado business (assuming your not doing everything yourself). If you are targeting a condo of course do your homework on the governing documents (covenants, rules, services provided) and financial strength - these can vary widely. Other tips:
- Recognize that getting things done in Hawaii can be a slow business. Unemployment is like 2%, and many folks will service your area only on certain days (they don't want to spend their time driving around the island). Plan your operating model accordingly. Preventive maintenance and figuring out how to attract and retain good people (even as contractors) are very key.
- Do you have good contacts among local service providers? If not, you may want to start with a PM for a year or 2 until you can develop your network.
- We always thought our Hawaii properties needed more cleaning attention than those in other areas. Maybe it's sand, dust and sunscreen. Plan on multiple deep cleans per year to keep up a high quality space.
- Find a good real estate attorney to help you with your rental agreement and also set you up to meet all the state/local mandates.
- Set up to do your own general excise and transient accommodation taxes. It's easy and not worth paying someone to do routinely.
- I'd recommend you plan to be in Kaui every 3-4 months, at least for the first year or so until you get established and know you have the operation down.
All excellent advice from fellow travellers.
Some good pieces have been published over the years by Hawaii TVR owners. These pieces are just the tip of the annual, costly, and time-sucking lobbying iceberg, but they'll give you an idea of work required to maintain control over your Hawaii property. Whether you're from Colorado, or BC, as a TVR owner in Hawaii, you might well feel you're from a foreign land.
These pieces are accessible through google and PressReader searches. They cover a few years but, really, are as accurate today and will be tomorrow as they were at time of publication. As I review the dates of publication, these were just the really bad years, where the number of anti-TVR bills was in the double-digits.
Intelligible review of bills central to our democracy — Honolulu Star-Advertiser; March 1, 2018.
Greater enforcement, coordination needed to halt illegal vacation rentals — Honolulu Star-Advertiser; January 17, 2016.
TAT already applies to TVRs, but state lacks capability to ensure compliance — Honolulu Star-Advertiser; December 13, 2015.
Call Hawaii the extortionate state — The Vancouver Sun; March 2, 2015.
Hawaii wants to leave Canadians in the cold — The Vancouver Sun; April 2, 2012.
Thanks for the info droptop.
I have been scouring the internet to educate myself on the STR regulations and operational challenges for the island of Kauai.
Next step will be to contact a real estate agent.
Daunting to say the least but unfortunately will probably be the new way of doing business in the STR world moving forward.