edcli

I know this is a long shot, but ppl on FT seem to have broad knowledge and background -- so here goes. Also I figure maybe get a more honest opinion here than from a rental agency and/or realtor. So here goes...

Anyone here have experience with vacation home ownership experience on Kauai? I love Kauai and thinking of a 2nd home on the island, but would have to rent out b/c I would not be able to spend much time there until I retire (long way off).

It seems there is legislation that make vacation rental home ownership not attractive. [Please forgive me for inaccuracies... I'm learning here.]
(1) There are only 3 zones approved for rental (unless home grandfathered in). So one cannot just buy a home in an inexpensive area and rent it out. You can have regular LT rents, just not short term. => so what you buy will be very inflated.
(2) From what I gather rental agencies take up to 50% of rental income. To make matters worse, you cannot simply VRBO your home unless you live on island. https://community.homeaway.com/message/28398. If you can VRBO your home and have someone on-island that would seem to be the way to go. But I think this option is not valid anymore.

Has anyone here make something like this work? Experiences and opinions would be greatly appreciated. TIA!

cblaisd

Hawai`i law also requires that you have an on-island property manager if you are not a resident on-island.

Having owned and rented out a home while residing off-island I would say that I would rather have 20 root canals without anesthesia than ever go through that again.

edcli

haha... I guess I'll just wait to when my work schedule is more flexible.

mstraveler

Mr.mstraveler and I have been through that calculation a LOT for the mainland and Hawaii, i.e. the value of actually owning a second home vs renting other people's. And we always decide that the headaches involved in buying completely override any convenience of it.

There are so many rentals on Hawaii - and nice ones - that it seems much more practical and relaxing to pay a nightly fee to walk in and walk out and have someone else worry about changing the sheets (never mind buying them, keeping them clean, finding someone to come in and change them etc.), pay the property taxes, do repairs and maintenance etc. etc.

There is romance involved in owning a second home. And to be fair, if you spend a lot of time there, more than romance. But for most of us who are not going to go someplace every weekend, it just does not pencil out.

JVPonKauai

Hi,

I have owned and rented for over 15 years on Kauai. I'd probably do it again, but the recession of 2008 was a bummer.

You do it so that you can have a place that is uniquely yours and the rental income takes the edge off the expense.

If you do it as an investment, you will be very frustrated!

If you do it to save money over a two week annual rental you will be very frustrated.

You need to have the financial resource to pay at least 50% or more down, maybe all cash. Otherwise the market ups and downs will really frustrate you.

All the legal stuff is nothing to worry about there are people here who will help you as much or as little as you want.

If you want to be actively involved in the business of renting, then VRBO is for you. If you want to be hands off, then one of the commissioned rental agencies is for you. Obviously you can "make" more money in VRBO, but you have to work at it.

I could go on, but that's my short answer.

philemer

There seems to be a lot of abuse of this 'law'. When looking at HI rentals online many of them only have a contact phone # & email for the owner on the mainland. Is this 'law' really enforced?

cblaisd

Is there some reason that you put "law" in scare-quotes, as if you don't believe that it's true?

HRS §521-43, (f)

http://hawaii.gov/dcca/ocp/hrs/lt_code/part4.html

edcli

I agreed at least 50% down to make it work for rental purposes. I thought that as well.

Thanks everybody for your input -- very helpful.

philemer

No, not sure why I put the ' ' around the word. I'll be more conscious of my ' ' use in the future.

Has anyone ever been prosecuted for not having a local manager, that you are aware of? Since many of the online ads say contact the owner, with a mainland phone #, I'm guessing that this law is disregarded a lot. Just a guess, however.

onthego15

Mainland phone number may just be someone's cell phone number, which they kept when they moved/bought property on Hawaii.

slippahs

Prosecuted, no, since it isn't a criminal act. But been entangled in a civil action, yes.

ILuvParis

Anyone who has thought that through would know that's not possible. I doubt the law is disregarded at all. That's probably because the law doesn't require a local "manager." It requires an "agent." We have a vacation rental home on Kauai. The unit is "managed" from the mainland and the telephone contact number is on the mainland. However, we have an on-island agent who handles housekeeping, maintenance and any other issues that come up. The name and telephone number of that person are provided to the renter and they are instructed to contact that person with any issues.

There are just too many things that can and do happen for an owner not to have an on-island agent - the ceiling fan in the bedroom doesn't work, there are no dishtowels in the kitchen, where are the beach towels, the carpet is wet, the washing machine won't start, the toilet is plugged, the dryer won't stop when I open the door, I lost the key to the unit, there is a leak in the ceiling and on and on and on.

Even if everything was perfect at all times, the owner would need a housekeeper. If a question ever was raised, no doubt the owner would give the authorities the name and number of the housekeeper as the agent. I would love to meet the owner who rents a home from the mainland and does not have an on-island agent.

philemer

Mahalo for the explanation. Makes sense.

MonicaL

Interesting conversation. Sounds like a royal pain to own property where you don't live.

johnsonisabella

According to my opinion always take help from agencies if you want to purchase or lease some property because an individual doesn't know all the rules, regulations, and contracts so it is important to take assistance from professional and experienced agencies or dealers that can do entire written paperwork.