Waimea Vacation vs. Long-Term Rentals—What's Better for YOUR Developing Portfolio?
17 October 2019
Hawaiian Dream Properties
With recent changes to the laws for short-term rentals in Waimea and the Big Island, more property owners are considering the properties in their portfolio. How do vacation rentals serve—or don't serve—your long-term financial goals?
Given that it's more challenging to own and operate a short-term rental under the new regulations, what can property owners do? Nobody wants to lose financial momentum toward retirement. Additionally, one of the appeals of a short-term rental is being able to spend time in your slice of paradise whenever you wish.
There are plenty of perks to running short-term rentals—if your property still qualifies. However, let's look at what long-term rentals bring to the table for investors in the face of these changing regulations.
What's the Difference?
There's no real difference in the physical properties between a short-term or a long-term rental. Until the recent changes from Bill 108, you could make any investment property a short-term or long-term rental. The differences lie in how you offer the home to renters.
Vacation rental properties offer short, customizable rental terms for vacation visitors to the Big Island—often a few days to a week or two. Property owners for these kinds of rentals deal with a revolving door of tenants, cleaning, constant repairs, and the hope that your property rents to vacationers most of the year. Income depends on constantly keeping your property occupied with a new batch of vacationers.
It can be a profitable way to build your retirement income—with the added bonus of weekend getaways! However, Bill 108 has made this lifestyle increasingly difficult. If your short-term rental dreams have been dashed by Bill 108, there is always the option to have someone watch over your investment property while you're away. The alternative is a long-term rental.
Long-term, residential rentals aren't designed for a brief visit or honeymoon. These investment properties provide a home for tenants who live in Waimea long-term; whether it's a few months out of the year—or year after year.
Property owners with long-term rentals enjoy steady, consistent income on a monthly basis. You have one tenant for the duration of an annual lease, in most cases. Tenant selection and qualification become easier when you don't need multiple tenants every month to keep your property occupied.
Consider Your Long-Term Financial Growth When Defining a Property
If you're playing the long game with your finances, consider focusing on long-term rental properties. The new regulations with Bill 108 actually provide excellent opportunities for long-term rentals in Waimea.
Long-term rentals aren't subject to the new short-term regulations: The new rules aim to protect residential areas from becoming overrun with vacation rentals. When you have a long-term rental, those rules don't apply to you.
Long-term rental homes are in high demand: It's no secret that living on an island means there's limited space for expansion. Eventually, we run out of room to grow! If you have a long-term rental, there's an excellent chance you won't have to worry about it staying vacant very long.
Long-term rentals provide long-term income: Because yearly housing is scarce on the Big Island, tenants don't want to move; there's nowhere for them to go. Your long-term tenants are likely to renew their lease and stay longer in your property.
Competition is fierce in the long-term rental market, but it's also a more reliable way to build wealth as an investment property owner.
I Have a Short-Term Rental—What Do I Do?
Remember: it's not about the property—it's about how you rent it. If you have a short-term property rental, it's an ideal time to shift it to a long-term rental.
With the help of a property manager, a few changes can make your short-term rental into a long-term rental that is exempt from the new vacation rental regulations. You don't have to change anything you do; whether you live locally or stateside. An expert property manager can handle everything while providing excellent service to your long-term tenants.
Monitoring changes in rental regulations—and making sure your rental properties comply
Monthly rent collection and owner payments
Full-service property management is the best way to make sure your Waimea vacation rentals transform into in-demand, long-term rentals. You'll have peace of mind knowing you don't have to let go of your short-term properties! You also don't need to handle any of the details to shift your properties to long-term rentals.
You might even find that your bottom line improves with a long-term, quality tenant in your property! Reducing tenant turnover is one of the best ways to maximize your investments.
We're Prepared for the Long Haul!
We've been monitoring the Bill 108 situation, so we're prepared to help our property owners convert short-term rentals into long-term properties. If you have a short-term property, let us help!
Hawaiian Dream Properties can help you determine if your short-term property can stay as-is, depending on the property's location and the approved short-term zones. If you need to shift your property to a long-term rental, we understand the process and can handle every last detail. Don't delay your long-term income! Let's chat about your situation and make sure you're on track to build your long-term wealth!