Is Big Island, Hawaii Good for Airbnb Investment?

To start an Airbnb on Big Island, Hawaii, begin by researching Hawaii County's strict short-term rental regulations, which require properties to be in Resort, Hotel, or Commercial zoning districts or have existing nonconforming use certificates, as most residential areas prohibit vacation rentals. Obtain a Nonconforming Use Certificate (NUC) if your property qualifies, or a Conditional Permit for new operations, which costs approximately $5,000-$15,000 and takes 6-12 months to process through Hawaii County Planning Department. Secure a General Excise Tax (GET) license from Hawaii Department of Taxation and a Transient Accommodations Tax (TAT) registration, paying 4.712% GET and 10.25% TAT on gross rental income. Find properties in permitted areas like Kona, Kohala Coast resort zones, or Puna district with existing permits, expecting to pay $400,000-$2,000,000 depending on location and size. Furnish with tropical, durable furniture suitable for Hawaii's humid climate, including quality linens, kitchen essentials, beach equipment, and outdoor furniture, budgeting $15,000-$40,000 for a complete setup. List on Airbnb, VRBO, and local platforms like Hawaii Life Vacations, highlighting unique Big Island features like proximity to Volcanoes National Park, black sand beaches, or Mauna Kea stargazing. Manage bookings through property management companies like RedAwning or Elite Pacific Properties (charging 20-35% commission) or self-manage with regular cleaning services ($100-$200 per turnover), maintenance contractors familiar with volcanic ash and salt air challenges, and 24/7 guest communication systems while maintaining compliance with noise ordinances and occupancy limits typically set at 2 guests per bedroom plus 2 additional guests maximum.

To identify profitable short-term rental properties on Big Island, Hawaii, focus on locations within 10-15 minutes of popular attractions like Hawaii Volcanoes National Park, Mauna Kea observatories, or pristine beaches such as Hapuna Beach and Punalu'u Black Sand Beach, while prioritizing areas with reliable internet and cell service since remote locations can limit bookings. Target properties with 2-4 bedrooms, ocean or mountain views, outdoor spaces like lanais or pools, and unique Hawaiian architectural features, ensuring they're zoned for vacation rentals under Hawaii County's regulations. Conduct pricing analysis using AirDNA and Mashvisor to benchmark nightly rates ($150-400+ depending on location and amenities), occupancy rates (typically 60-75% for well-positioned properties), and seasonal demand patterns that peak during winter months and summer vacation periods. Research competition by analyzing similar properties within a 5-mile radius on Airbnb and VRBO, identifying gaps in amenities or services you could offer, and studying successful listings' photography, descriptions, and guest reviews. Utilize Big Island-specific resources including the Hawaii County Planning Department for zoning verification, local property management companies like Big Island Vacation Rentals for market insights, Hawaii Tourism Authority data for visitor statistics, and connect with local real estate agents specializing in investment properties who understand the unique challenges of Big Island's diverse microclimates and infrastructure limitations.

To obtain an Airbnb/STR permit on the Big Island of Hawaii, you must apply through Hawaii County's Planning Department by submitting a Conditional Permit application, which requires a completed application form, site plan showing the property layout, floor plans of the dwelling, proof of ownership or authorization from owner, tax clearance certificate, and a $1,000 non-refundable application fee plus additional fees for public notices and hearings that can total $2,000-3,000. The process typically takes 6-12 months and includes a public hearing where neighbors can provide input, and you must demonstrate compliance with zoning requirements, parking standards (minimum 1 space per unit), septic and water capacity, and fire safety codes. Big Island specific requirements include restrictions in certain residential zones, a cap on the total number of permits issued county-wide, mandatory liability insurance, annual renewal with $500 fee, guest registration requirements, and compliance with GET tax collection - additionally, properties in lava zones may face additional scrutiny and some areas like certain subdivisions in Puna have specific prohibitions against short-term rentals that must be verified before applying.

Short-term rentals (STRs) are legal on the Big Island of Hawaii but operate under strict regulations implemented by Hawaii County. As of 2019-2020, the county established a cap system limiting the total number of STR permits, with different allowances for various districts - approximately 1,600 permits were initially allowed island-wide. STRs are prohibited in residential zones and agricultural districts, but are permitted in resort zones and some mixed-use areas, with specific concentrations allowed in areas like Kona, Kohala Coast, and parts of Puna. All operators must obtain a Non-Conforming Use Certificate (NUC) or Conditional Use Permit, register with the county, pay transient accommodation taxes, and comply with safety requirements including smoke detectors and emergency contact information. Recent changes include stricter enforcement mechanisms, increased penalties for illegal operations, and enhanced monitoring systems, with the county actively pursuing violations and imposing fines up to $10,000 per day for unpermitted rentals. The regulations also require hosted rentals (where owners live on-site) to meet different criteria than unhosted properties, and certain areas near schools, parks, and residential neighborhoods have additional restrictions or complete prohibitions on STR operations.

The best Airbnb investment areas on Hawaii's Big Island include Kailua-Kona on the west coast, which attracts tourists year-round with its beaches, snorkeling at Kealakekua Bay, and proximity to coffee farms, generating strong rental demand from leisure travelers. Waikoloa and Mauna Lani areas offer luxury vacation rental opportunities near world-class resorts and golf courses, appealing to high-end tourists willing to pay premium rates. Hilo on the east side provides more affordable investment options while serving visitors to Hawaii Volcanoes National Park, Rainbow Falls, and those attending University of Hawaii at Hilo events. The Volcano area near Hawaii Volcanoes National Park commands high nightly rates due to limited accommodation options and consistent tourist traffic to see active lava flows and volcanic attractions. Pahoa and the Puna district offer budget-friendly investment properties that attract adventure travelers and those seeking authentic Hawaiian experiences, though volcanic activity risks should be considered. Captain Cook and the South Kona coast provide excellent returns due to proximity to snorkeling spots, coffee plantations, and the historic Pu'uhonua o Honaunau National Historical Park, while Waimea appeals to visitors exploring the island's ranching culture and accessing Mauna Kea observatories.

Airbnb properties on the Big Island of Hawaii are subject to multiple lodging taxes including the Hawaii Transient Accommodations Tax (TAT) of 10.25% and Hawaii General Excise Tax (GET) of 4.712% on gross rental income, with some counties adding their own hotel/resort taxes ranging from 0.5% to 3%. The TAT applies to stays under 180 consecutive days and is collected from guests, while GET is applied to the host's gross receipts including cleaning fees and other charges. Hosts must register with the Hawaii Department of Taxation to obtain TAT and GET licenses, collect taxes from guests at booking or check-in, and remit payments monthly or quarterly depending on volume through the state's online filing system. Properties rented for 180+ consecutive days to the same guest, certain long-term residential rentals, and accommodations provided to employees are generally exempt from TAT, though GET typically still applies. Hawaii County may impose additional transient accommodation taxes that vary by district, and all taxes must be separately stated on guest invoices with proper documentation maintained for audit purposes.

Starting an Airbnb on the Big Island of Hawaii requires significant upfront investment, with property purchase being the largest expense at approximately $650,000 for a median-priced home suitable for short-term rental. Furnishing costs typically range from $15,000-25,000 to create an attractive, fully-equipped vacation rental including furniture, appliances, linens, and décor. Initial setup expenses of $3,000-5,000 cover professional photography, listing creation, welcome materials, and basic supplies. Permits and fees total approximately $2,500-4,000, including Hawaii County short-term rental permits, GET tax registration, and business licenses. Insurance costs around $3,000-4,500 annually for short-term rental coverage, while utility deposits and connections average $1,500. First six months of operating costs including utilities ($900/month), cleaning services ($150 per turnover), property management fees if applicable (25-30% of revenue), maintenance reserves, and marketing expenses typically total $8,000-12,000. The complete startup investment ranges from approximately $683,000 to $701,000, making Big Island Airbnb ventures capital-intensive but potentially lucrative given the island's strong tourism demand and limited short-term rental inventory due to recent regulatory restrictions.

Airbnb properties on Hawaii's Big Island demonstrate strong profitability potential with average daily rates ranging from $150-400 depending on location and amenities, generating annual revenues of $40,000-120,000 for well-positioned properties. Ocean-view condos in Kona and Waikoloa typically achieve 65-75% occupancy rates with gross profit margins of 35-45% after accounting for expenses including property management fees (20-30%), cleaning costs ($75-150 per turnover), utilities ($200-400 monthly), insurance ($2,000-4,000 annually), and maintenance reserves. Properties near popular attractions like Volcanoes National Park or premium beach locations in Mauna Kea Resort area command premium rates and maintain higher occupancy, with some luxury villas generating over $200,000 annually. Success factors include professional photography, responsive guest communication, local property management partnerships, and strategic pricing during peak seasons (December-April, July-August). Case studies from 2022-2023 show that investors purchasing $600,000-800,000 properties in desirable locations achieved 8-12% annual returns, while those focusing on unique features like lava views, private pools, or eco-friendly amenities outperformed standard rentals by 15-25%. However, properties in remote areas or those lacking ocean access typically struggle with sub-50% occupancy rates and reduced profitability due to Hawaii's competitive vacation rental market and increasing regulatory restrictions in certain districts.

Airbnb investments on the Big Island of Hawaii typically generate annual ROI of 8-15% with cash-on-cash returns ranging from 12-22%, depending on property location and management efficiency. Properties in popular areas like Kona, Hilo, and near Volcanoes National Park command premium nightly rates of $150-400, with occupancy rates averaging 65-75% annually. Initial investment recovery and profitability generally occur within 3-5 years, factoring in Hawaii's high property acquisition costs of $600,000-1.2 million for suitable vacation rental properties. The Big Island's tourism market, driven by approximately 1.7 million annual visitors as of 2023, supports strong rental demand, though investors should account for Hawaii's 4.712% general excise tax, transient accommodation taxes of 10.25%, and potential regulatory changes affecting short-term rentals that could impact long-term returns.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties across markets including Big Island, Hawaii. Local real estate agents like Carrie Nicholson with Hawaii Life Real Estate Brokers and Tim Stice with Coldwell Banker Island Properties have extensive experience helping investors acquire vacation rental properties on the Big Island. Island Sotheby's International Realty and Compass Hawaii also maintain teams focused on investment properties in the Kona and Hilo markets. National services include Awning, which provides Airbnb investment analysis and property management, and Mashvisor, offering rental property analytics for Hawaiian markets. Local property management companies like RedAwning and Elite Pacific Properties assist investors with both acquisition guidance and ongoing Airbnb operations. AirDNA provides market data and revenue projections specifically for Big Island short-term rentals, while Roofstock and Arrived Homes have expanded their platforms to include Hawaiian vacation rental investments. Big Island-based investment groups like Hawaii Investment Properties and Kona Coast Realty specialize in connecting mainland investors with profitable vacation rental opportunities, particularly in areas like Waikoloa, Kailua-Kona, and the Puna district where short-term rental regulations remain investor-friendly.