Due to the popularity of Hawaii for vacationers seeking a tropical paradise, the need for quality vacation rental properties continues to grow. If you wish to add real estate to your investment portfolio, buying a property to use for short-term rentals can be a good starting point. Before purchasing a property, it’s important to understand more about the process of renting homes to short-term guests and to know what to expect.
Buying a vacation rental
When buying a property to use as a short-term rental, location is important. You can easily renovate and make upgrades to the interior and exterior of the home, but the location cannot be changed. Look for properties that are close to local attractions but in areas where a visitor would still experience some of the natural beauty of the islands. A good location means the property will likely continue to appreciate over time.
Some investors also use their rental property as a vacation home for themselves and their family. If you wish to do this, find a balance between what your family would enjoy and what would make for a good rental. Research other rental homes in the area in which you wish to buy to see what amenities they offer. Be sure to factor in the costs to add amenities and upgrade the property when you’re deciding how much you want to spend on the property.
Important considerations
Be aware of the rental regulations in the neighborhoods you consider. Some may have strict rules that will prevent you from using the home as a short-term rental. Consider the proximity of the neighbors and the parking situation when purchasing a rental home. Gated communities may offer more security to potential vacationers, but these communities may have rules about parking, noise, and other guidelines that would make that area not friendly to short-term stays.
Some property owners prefer to be more hands-on with their rental properties while others prefer to use a property management company to deal with the day-to-day business. You’ll need to factor in the costs of using a property management company as well as the expenses to keep the property clean and maintained. Be sure to consider all expenses, not just the costs of the property, when deciding to purchase an investment property.
Legal advice
Buying real estate in Hawaii for short-term rental is a big step. It’s important that you understand the laws surrounding such a purchase so you’re aware of your rights and responsibilities as a property owner. Working with a professional who knows the state’s laws can help you make the right purchase based on your needs.