Condominiums - Short Term Rentals, Condo-tels
For the second installment in this series, we will explore the possibility of having short term rentals in a condo unit in Maui.
If you want to be able to rent your condo legally for a period less than 6 months, the property must allow for short-term or vacation rentals. Short-term rental properties can be rented out nightly, weekly or monthly. Rental occupants are charged transient taxes of 11.25%.
Units that don't allow short-term rentals tend to have more owner-occupied units and show more pride of ownership. So, if you like getting to know your neighbors, you probably don't want to choose a short term rental condominium. They can be rented out for a minimum of 6 months.
Many short term rental units have on-site staff. Some of these are known as "Condo-tels" and are operated like hotels, complete with receptionists, concierges and room service, When the owners are not using their units, they can leverage the marketing and management done by a property management group to rent and maintain the condo unit as it would any other hotel room. Technically condo-tels are identified by both presence of on-site staff and percentage of owner-occupants. Because of the latter, a complex can be a condo-tel 1 day and not be one the next! Buyers sometimes face challenges with financing on condo-tels, but most reputable Hawaii-based mortgage brokers are skilled at handling these details. Property tax rates on condo-tels are also higher. It is important to remember that there are several condominium complexes that allow short-term rentals but are not classified as condo-tels. It is critical that buyers understand the zoning and condo association regulations and make sure they understand how the condo can be used.