Maui is not only one of the most desirable vacation destinations in the world, it is also one of most highly coveted places to invest in vacation rental condos as well. Who doesn’t want to go check on their investment in the place ranked #1 island vacation by many of the top travel magazines, websites, and blogs?
Before purchasing your investment property you’ll first need to know a little about what you need to look for in a vacation rental property. When you do take that plunge and buy your first vacation rental condo or home, you will be faced with a major decision of whether to run the unit yourself using some popular vacation rental websites or hire a Maui property management company. You’ll also need to decide whether you want to do short term rentals or long term rentals.
Many Maui property management companies manage both short and long term rentals. However, there are some that specialize in short term rental. Some Maui condos can be rented daily like a hotel. Lenders often refer to these types of properties as “Condotel”.
These condos are allowed to be rented like a hotel for several reasons:
- The zoning of the condo is in Hotel/Resort zoning.
- The condo is included on the Minatoya list. This is a list that was included in a law passed that states which condos are grandfathered as short term rental condos. Kulakane located in Napili is an example.
- The condominium complex was granted approval through the county based on the request of the majority of condo owners. Make sure to ask for the county approved letter! Pacific Shores in South Kihei is an example.
- An owner applies for a short term rental application and is approved; this is a lengthy process and there are no guaranties you will be given the green light. All short term rentals not legally zoned are nontransferable. There are a few rare exceptions, so you will need to apply once you are the owner. This tends to be the least desirable option.
The best rate you will find for running your vacation rental from a Maui property management company is 20%. You will find rates as high as 43% to 55% for higher end properties and larger known brands like Aston and Outrigger, which are typically located onsite at particular complexes (Maui Banyan in South Maui and Aina Nalu in West Maui). The average Maui property management rate is 35% from companies located offsite.
When choosing a Maui property management company you will have to decide whether you want an offsite management company with the lowest rates or keep things simple and pay more for onsite management. There are a small handful of condominium complexes which require you to use the onsite management, otherwise, you are free to choose anyone.
The selected Maui property management company should have access to the following:
- Cleaning crews (Cleaning fee transferred to guest).
- Handymen and contractors (maintenance fees come out of your pocket).
- Linen service (typically an additional monthly charge).
- Booking agents (included in their management fee).
- Access to data to determine your nightly rate based on the season (November to April is high season and May to October is slower).
- Targeted websites and locations to market your unit. You are usually responsible for fees charged by sites like Airbnb or VRBO. They may also advertise on FlipKey, TripAdvisor, Expedia, and numerous others. Once you’ve been operating for a while you’ll get to know the different sites and their different fees.
The most important thing you can do when choosing a Maui property management company is to interview as many as you can. Be thorough when inquiring what services each provides so you can compare them. You’ll also want to work out how the condo is set up for the guests. Most companies add little touches that can be the deciding factor. Your decision could come down to whether or not snacks are left out for the guests, to how many toilet paper rolls are provided after a cleaning. You never know. Good luck with your search!