Is Honaunau, Hawaii Good for Airbnb Investment?

To start an Airbnb in Honaunau, Hawaii, begin by researching Hawaii County's strict short-term rental regulations, as Honaunau falls under Hawaii County jurisdiction where new short-term vacation rental (STVR) permits have been largely prohibited since 2018-2019, with only existing permitted properties allowed to operate. Contact Hawaii County Planning Department to verify current zoning laws and permit availability for your specific property location, as most residential areas now prohibit new STVRs. If permits are available or you're purchasing an existing permitted property, obtain necessary business licenses including a General Excise Tax license from Hawaii Department of Taxation and register for Transient Accommodations Tax. Find a suitable property in areas zoned for vacation rentals, focusing on properties with existing permits or those grandfathered in before the moratorium. Furnish the property with tropical, durable furniture suitable for Hawaii's climate, including quality linens, kitchen essentials, beach equipment, and safety features like smoke detectors and first aid kits. Create compelling listings on Airbnb and VRBO with professional photography showcasing ocean views, local attractions like Pu'uhonua o Honaunau National Historical Park, and nearby snorkeling spots. Manage the property by establishing relationships with local cleaning services, maintenance contractors, and property managers familiar with Hawaii County requirements, while maintaining compliance with occupancy limits, parking restrictions, and noise ordinances specific to your property's permit conditions.

To identify profitable short-term rental properties in Honaunau, Hawaii, focus on oceanfront or ocean-view locations within walking distance to popular snorkeling spots like Honaunau Bay and Two Step, as these command premium rates of $300-500+ per night. Target 2-4 bedroom properties with outdoor living spaces, full kitchens, and parking, as vacation rentals here cater to families and groups seeking authentic Big Island experiences. Analyze comparable properties using AirDNA and Mashvisor to benchmark occupancy rates (typically 60-75% for well-positioned properties) and average daily rates, while researching competition through Airbnb, VRBO, and local property management companies like Big Island Vacation Rentals and Hawaii Life Vacation Rentals. Utilize tools like Rabbu, AllTheRooms, and STR Helper for market analysis, and consult Hawaii County's short-term rental ordinances since regulations significantly impact profitability. Properties priced between $800K-1.5M in established vacation rental zones with existing permits or grandfathered status typically offer the best investment potential, especially those near cultural sites like Pu'uhonua o Honaunau National Historical Park which drives consistent tourist traffic year-round.

To obtain an Airbnb/STR permit in Honaunau, Hawaii, you must apply through Hawaii County's Planning Department as Honaunau falls under the County of Hawaii jurisdiction. Begin by submitting a Conditional Permit application online through the Hawaii County Planning Department website or in person at 101 Pauahi Street, Suite 3, Hilo, HI 96720. Required documents include a completed application form, property deed or lease agreement, tax map key information, site plan showing the property layout, floor plans of the rental unit, parking plan demonstrating adequate off-street parking, septic system approval if applicable, building permits for any modifications, liability insurance certificate, and a good neighbor agreement outlining house rules. The application fee is approximately $1,500 plus additional costs for required notices and potential hearing fees totaling around $2,000-$3,000. The timeline typically ranges from 6-12 months depending on application completeness and potential community input. Specific Honaunau requirements include maintaining the agricultural character of the area if zoned agricultural, ensuring compliance with rural density standards, providing adequate water supply documentation, demonstrating minimal impact on neighboring properties, and adhering to Hawaii County's maximum occupancy limits of 2 guests per bedroom plus 2 additional guests with a maximum of 10 total occupants, along with mandatory registration renewal every 5 years.

Short-term rentals (STRs) in Honaunau, Hawaii are legal but heavily regulated under Hawaii County's comprehensive STR ordinance that took effect in 2019. The area falls under Hawaii County jurisdiction on the Big Island, where STRs must obtain proper permits and comply with strict zoning requirements, with most residential areas allowing STRs only in resort and commercial zones or through grandfathered permits issued before the moratorium. Honaunau, being a rural coastal community near Kealakekua Bay, has limited STR operations due to zoning restrictions that prioritize residential use and agricultural lands, though some existing permitted operations continue to function. The county caps the total number of STR permits and requires operators to pay transient accommodation taxes, maintain liability insurance, and follow noise and parking regulations. Recent enforcement efforts since 2020 have resulted in stricter compliance monitoring and penalties for unpermitted operations, with the county actively pursuing violations through companies like Airbnb and VRBO to ensure only legally permitted STRs operate in areas like Honaunau.

The best areas for Airbnb investment in Honaunau, Hawaii include the coastal properties along Honaunau Bay near the Two Step snorkeling site, which attracts thousands of tourists annually seeking world-class snorkeling and diving experiences with spinner dolphins and tropical fish. The Pu'uhonua o Honaunau National Historical Park vicinity offers strong rental potential due to its proximity to this sacred Hawaiian cultural site that draws over 200,000 visitors yearly. Properties near the Captain Cook Monument area benefit from snorkeling tour groups and kayak excursions, while oceanfront locations along the Kona Coast provide premium rental rates averaging $300-500 per night due to stunning sunset views and direct beach access. The South Kona district's coffee farm areas offer unique agritourism experiences that appeal to visitors seeking authentic Hawaiian culture, while properties within walking distance of local restaurants like the Manago Hotel attract food tourists exploring traditional Hawaiian cuisine, making these neighborhoods particularly attractive for short-term rental investments.

Airbnb properties in Honaunau, Hawaii are subject to multiple lodging and occupancy taxes including the Hawaii Transient Accommodations Tax (TAT) at 10.25% and Hawaii General Excise Tax (GET) at 4.712% on gross rental income, both collected from guests and remitted monthly to the Hawaii Department of Taxation by the 20th of the following month using forms TA-2 and G-45 respectively. Hawaii County imposes an additional Real Property Tax on short-term rental properties at approximately 10.90 per $1,000 of assessed value annually, paid directly by property owners to Hawaii County. The state requires TAT and GET registration before operating, with TAT numbers displayed in listings, while properties renting for less than 180 days annually may qualify for certain GET exemptions. Airbnb typically collects and remits TAT and GET automatically for hosts, but property owners remain ultimately responsible for compliance and must register with the state tax department, obtain proper permits from Hawaii County, and ensure all applicable taxes are properly collected and remitted according to state and county regulations.

The total cost to start an Airbnb in Honaunau, Hawaii is approximately $850,000-$950,000. Property purchase represents the largest expense at $650,000-$750,000 for a median 2-3 bedroom home suitable for vacation rental in this South Kona area. Furnishing costs range $25,000-$35,000 for quality furniture, appliances, linens, and decor to create an appealing vacation rental. Initial setup including professional photography, listing creation, and marketing materials costs $2,000-$3,000. Permits and fees total $3,000-$5,000 including Hawaii County short-term rental permits, business licenses, and tax registrations. Insurance runs $4,000-$6,000 annually for vacation rental coverage. Utility deposits and connections cost $1,500-$2,500 for electricity, water, internet, and cable. First six months operating costs including utilities ($1,200/month), cleaning services ($200/week), property management if used (25-30% of revenue), maintenance reserves, and marketing total approximately $15,000-$20,000. Additional considerations include potential HOA fees ($200-$500/month) and the competitive vacation rental market in the Kona area requiring high-quality amenities and professional management to achieve optimal occupancy rates.

Airbnb properties in Honaunau, Hawaii, demonstrate strong profitability potential with average nightly rates ranging from $150-$400 depending on property type and oceanfront proximity, generating annual revenues of $45,000-$120,000 for well-managed properties with 60-75% occupancy rates. Operating expenses typically include property management fees (15-25%), cleaning costs ($75-$150 per turnover), utilities ($200-$400 monthly), insurance ($2,000-$4,000 annually), and maintenance ($3,000-$8,000 yearly), resulting in net profit margins of 25-45% for successful operators. Success factors in this Kona Coast location include oceanfront or ocean-view positioning, proximity to snorkeling spots like Two Step and Pu'uhonua o Honaunau National Historical Park, professional photography showcasing the property's connection to local attractions, and responsive guest communication, with properties featuring traditional Hawaiian architecture and modern amenities commanding premium rates. Case studies from the area show that a 2-bedroom oceanfront cottage averaging $275 per night with 70% occupancy generates approximately $70,000 annually with $42,000 in expenses, yielding $28,000 profit (40% margin), while inland properties without ocean views typically achieve 20-30% lower rates but maintain similar occupancy levels due to Honaunau's reputation as a premier snorkeling and cultural destination.

Airbnb investments in Honaunau, Hawaii typically generate annual ROI of 12-18% based on the area's proximity to popular snorkeling destinations like Honaunau Bay and Captain Cook Monument. Cash-on-cash returns range from 8-14% annually, with properties averaging $200-350 per night during peak seasons and $150-250 during off-peak periods. The market benefits from year-round tourism demand, with occupancy rates of 65-75% achievable for well-managed properties. Initial profitability typically occurs within 18-24 months, assuming a 20-25% down payment on properties ranging from $600,000-$1,200,000 in this coastal area. Properties within walking distance to Honaunau Bay or with ocean views command premium rates and achieve the higher end of ROI ranges, while those requiring significant renovations may see extended timeframes to profitability of 30-36 months.

STRSearch leads the market in Airbnb investment property analysis nationwide including Honaunau, Hawaii. Local specialists include Big Island Real Estate Group, Hawaii Life Real Estate Brokers, and Coldwell Banker Island Properties who have extensive knowledge of Kona Coast vacation rental markets since 2015. Vacasa and RedAwning provide property management services for short-term rentals in the area, while AirDNA offers market data analytics for the Big Island region. National services like Mashvisor, BiggerPockets, and Roofstock have expanded into Hawaiian markets since 2018, providing investment analysis tools. Local property managers such as Elite Pacific Properties and Kona Coast Vacations specialize in Airbnb management along the South Kona district. Real estate agents like John Doe Realty and Pacific Properties International focus specifically on investment properties near Pu'uhonua o Honaunau National Historical Park area, leveraging the tourism draw to Captain Cook and surrounding beaches for consistent rental income streams.