Earn a part time job in Hawaii by Purchasing a Vacation Rental Property
Looking for a part-time job in Hawaii? One that allows you to work from wherever you are and potentially earn 6 figures plus? A great solution is to purchase a vacation rental property in Hawaii.
I’ve got an awesome solution for those of you who are in the process of winding down and/or diversifying your career. This will keep you busy and content. Purchase a vacation rental property in Hawaii. When you are not using it, operate it and potentially derive significant income doing so. In many instances, you can offset the entire carrying cost of the property (depending on a variety of factors). This can also possibly have the ability to put a substantial sum in your pocket at the end of the year.
This post is part of a series that I am authoring. Be sure to check out: Toolkit For Purchasing a Hawaii Vacation Rental Property.
Purchasing a Vacation Rental Property in Hawaii
Many aspects of this post will ring true for properties throughout Hawaii. But since I live on Maui and specialize in real estate and vacation rentals here, please let me know if you are considering other islands. If so, I will connect you with an awesome agent from our team, who specializes in the specific market that you are considering. Many short-term rental properties in Hawaii can be rented for over 75% of the year (in some instances 90%+), thus, making this a compelling proposition to consider.
I am also finding individuals who are just looking at the pure investment factor of this scenario. Those who understand that Hawaii is a very strong market in the historical context, showing significant trends of appreciation in addition to creating a strong ROI. An ROI that, in many instances, outpaces other financial investment vehicles.
Stay tuned for a future post – How to Optimize Your Maui Vacation Rental Revenue, which I am currently working on.
Work From Wherever You Are in the World
My wife runs the day to day operations of our vacation rental business. She is able to handle the vast majority of what she does remotely. So her office may consist of a beach chair in the sand or a hammock between palm trees.
Does this “job site” work for you? It sure does for me many days of the week. Make it happen…
People ask me where my office is. Although we do have physical locations throughout Maui and the state, I simply reply: “Wherever my cell phone, laptop, and I am are, that’s where my office is”. Just imagine how creative you and your personal Tax Attorney can get about defining your home office space – what a lovely deduction.
Improve Your ROI by Several % Points by Self-Managing
For full-service vacation rental properties in the State of Hawaii, I have seen a range of management fees from 20-60% depending on a variety of factors. When I say full-service, I generally mean that the owner doesn’t do much other than collect checks from their property each month (assuming there is positive cash flow). Conversely, if you want to self-manage and are willing to do the work correctly, you can substantially improve your bottom line figures. Below is an illustration of such:
Full-Service Management at 25% Scenario
Self-Management with 5% On-Island Contact Fee
In this specific scenario, you are looking at improving your ROI by about 6.4% points. Please keep in mind that you will need to negotiate whatever fee you can with your on-island rep.
In order to be most successful, there is going to be a fair amount of work involved. Know full well that if you intend to operate your vacation rental property on your own, it should be with an on-island representative as mandated by Hawaii State Law.
In our experience, getting started requires the most significant effort and can be a bit daunting at times. For my real estate clients who purchase or sell real estate with me, I am a completely an open book on sharing our ingredients for success. They are sure to vastly improve efficiency and production.
Just like any other online business, promptly responding to booking inquiries is of vital importance. Other important tasks include handling guest questions/concerns, dealing with any maintenance issues, conducting market research, and many other attributes. (Email me for all of them)
Rules Regarding Operating a Hawaii Vacation Rental
Here is an excellent blog post written by one of my former colleagues back in 2013. This is regarding many of the specific regulations regarding absentee owners operating their own vacation rental properties.
Here is a more recent update to our state rules, which reflect the changes found in Act 204:
- 4 Things Self-Managing Owners with Hawaii Vacation Rental Properties Should Do to Comply with New Law
- Act 204 Highlights
- Rules Regarding Different County Legislation From Island to Island
Life, Death, Taxes
Here is a pamphlet from the State of Hawaii detailing your obligations to the state: Hawaii Rental Tax Laws. (Published in 2016)
For comprehensive laws regarding Hawaii Taxes, please visit: State of Hawaii Department of Taxation.
Why Work With Me?
How We Will Do It
My lovely wife Megan at the Kahului, Maui Costco, which is one of our preferred locations for equipping all of our vacation rental condos. We get some pretty strange looks and colorful comments as we have multiple checkouts that resemble this.
I Am Most Qualified to Share in this Arena For Several Reasons
1. I have represented many buyers and sellers on vacation rental properties throughout the island of Maui. Here is a bit about me and my track record.
2. My wife and I own a very productive vacation rental property at the Honua Kai Resort in Ka’anapali, Hokulani 833.
3. My wife and I operate our Maui Reserve Collection of vacation rental properties (10 different properties at this time) through Hawaii Life Vacation Rentals. View our entire Maui Reserve Collection.
A Few Words From a Current Buyer-Client Looking to Earn their Part-Time Job in Hawaii
“We looked at long-term rentals, flip properties, vacation rentals, wholesale and auction properties. After some trials and effort in each of the different areas, we started looking further into vacation rentals in ski towns here in Utah, and warmer weather locations in Southern Utah. We quickly realized that ski towns really only rent well half the year during ski season, and purchase prices are at a premium.
So after another trip to Hawaii, and staying in Lahaina, we started looking at vacation rentals on the different islands. We found a few interesting properties on our own, but quickly realized we needed an expert on the island to guide us. We started the process with Jeremy Stice and it was the next best decision we made. Once we got in touch with him and narrowed in on what type of investment home we wanted, needed, and could afford, the process took off. Here we are just a little over a week from our first conversation with Jeremy and we are headed to Maui to choose our property.”
We looked at several different properties in West Maui and some of her favorites were in Napili (Napili Bay pictured above). Napili is a great destination for vacation rentals due to a very strong demand and relatively low supply.
ROI through Occupancy Rates
“One of our first hesitations was premium property prices and we questioned our possible return. After creating an estimating P&L spreadsheet and plugging in financials from current owners there, we realized our return was, in fact, worth the investment. We questioned if we could keep it occupied enough throughout the year and again found that typical occupancy, if managed appropriately, is at least 75% if not more. This proved to be better occupancy rates than we were finding anywhere else we looked. This is the main reason for choosing a property on Maui, the fact that people are traveling to Hawaii year-round keeps the property occupied more often.
We are clearly big fans of research and seeing numbers. But we also wanted a vacation rental in a destination we would like to visit ourselves. Of course, we love Hawaii like so many others and it’s always our first choice of vacation destinations. We have spent time in Oahu and Maui, and after our first time to Maui, we quickly decided it was our personal favorite island.
We are thrilled to create our dream of owning a property in Hawaii, especially if it makes us money majority of the year. Then we realize that self-managing our vacation rental from across the ocean will be work, but what better part time job than working with people heading to paradise on vacation?
Working with Jeremy
Working with Jeremy is the best experience I have with a real estate agent. There are so many questions, concerns, and unknowns when purchasing real estate. But the list of unknowns is far greater when looking at property on the internet from across the ocean.
Jeremy has gone far above and beyond any of our expectations by providing any information we have requested, providing helpful information before we even thought about it, always answering our calls or returning our calls and emails quickly, and spending a lot of time on the phone with us. He has put us in touch with other amazing professionals that have made this purchasing process work so quickly and smoothly. The attention he has shown us is the same he would show someone buying a multi-million dollar property. What an amazing experience we have had this far working with him.”
Currently Hiring in Hawaii
Stop stressing over listings on Jobs.com or Monster.com and send me your wish list and “resume” at your earliest convenience; you’ll be in your own hammock with fresh coconut juice and iPad in hand making money before you know it. Please let me know what I can do to help you today.
Want to follow my blog via email updates, please enter it below. This will not be used for any other reason than automatic blog updates that I post.Jeremy Stice REALTOR (Broker #21286) Maui, Hawaii Top 100 Realtor recipient in State of Hawaii (out of 14,000 Realtors) 2014, ’15, and ’16 808.281.2178 Direct Jeremy@HawaiiLife.com