Is Kamuela, Hawaii Good for Airbnb Investment?

To start an Airbnb in Kamuela, Hawaii, begin by researching Hawaii County's strict short-term rental regulations, as Kamuela falls under Hawaii County jurisdiction which requires a Nonconforming Use Certificate (NUC) for properties that operated as vacation rentals before 2018, or you must operate in areas zoned for visitor accommodation. Obtain necessary permits including a General Excise Tax License, Transient Accommodations Tax permit, and potentially a Conditional Permit depending on your property's zoning. Find a suitable property in areas like Waimea or Puako where short-term rentals may be permitted, ensuring it meets Hawaii County's requirements for parking, septic capacity, and neighborhood compatibility. Furnish the property with quality furniture, linens, and amenities that appeal to visitors seeking the upcountry Hawaii experience, including items for cooler weather since Kamuela sits at higher elevation. Create your Airbnb listing with professional photos highlighting the property's proximity to Mauna Kea, Parker Ranch, and local attractions while clearly stating house rules and check-in procedures. Manage the property by establishing relationships with local cleaning services, maintenance providers, and potentially a property management company familiar with Hawaii County regulations, while maintaining compliance with tax obligations including the 4.712% General Excise Tax and varying Transient Accommodations Tax rates, and be prepared for potential regulatory changes as Hawaii County continues to evaluate short-term rental policies.

To identify profitable short-term rental properties in Kamuela, Hawaii, focus on locations within 10-15 minutes of Waimea town center and major attractions like Mauna Kea Beach, while prioritizing properties with ocean or mountain views, multiple bedrooms (3-4 ideal), outdoor spaces, and parking since tourists often rent cars. Analyze pricing by researching comparable Airbnb and VRBO listings in the $200-400 nightly range, accounting for Kamuela's premium positioning as a gateway to luxury resorts and ranch experiences. Study competition density using AirDNA and Mashvisor, targeting areas with under 20% STR saturation while avoiding oversaturated coastal zones. Property features should include modern amenities, reliable internet for remote workers, air conditioning or good ventilation, and proximity to grocery stores since Kamuela has limited dining options. Utilize Hawaii-specific resources like the County of Hawaii planning department for zoning verification, local property management companies like Elite Pacific Properties for market insights, and factor in Hawaii's unique regulations including GET taxes, transient accommodation taxes, and potential future STR restrictions when calculating ROI projections of 8-12% annually.

To obtain an Airbnb/STR permit in Kamuela, Hawaii County, you must apply through the Hawaii County Planning Department by submitting a Conditional Permit application for transient vacation rentals. Required documents include a completed application form, site plan showing the property layout, floor plans, proof of ownership or authorization letter, tax clearance certificate, and neighbor notification affidavits from properties within 300 feet. The application fee is approximately $1,500 plus additional costs for public hearing notices (around $200-400). The process typically takes 6-12 months and includes a mandatory public hearing before the Planning Commission. Specific Kamuela requirements include compliance with North Kohala Community Development Plan guidelines, adherence to agricultural zoning restrictions if applicable, provision of adequate parking (minimum 2 spaces), septic system compliance verification, and demonstration that the use won't negatively impact the rural character of the area. Properties must also meet all building and safety codes, obtain a General Excise Tax license, and comply with transient accommodations tax requirements. The permit, if approved, is valid for a specific time period and requires annual renewals with associated fees of approximately $350-500.

Short-term rentals (STRs) in Kamuela, Hawaii are legal but heavily regulated under Hawaii County's comprehensive STR ordinance that took effect in 2019. The county requires all STR operators to obtain permits and comply with strict regulations including occupancy limits, noise restrictions, parking requirements, and mandatory on-island contact persons available 24/7. Kamuela, located in the South Kohala district, falls under areas where new STR permits are generally prohibited in residential zones, though existing legal operations that obtained permits before recent restrictions may continue operating. The county has implemented a cap on the total number of STR permits and prioritizes applications in resort and commercial zones over residential areas. Recent legal changes include increased enforcement penalties, stricter application processes, and enhanced neighbor notification requirements, with the county actively pursuing unpermitted operations through fines up to $10,000 per day. Property owners must also comply with state tax requirements and transient accommodation taxes, and many homeowners associations in Kamuela's resort communities like Mauna Kea Resort have additional restrictions that may further limit or prohibit STR operations regardless of county permits.

The best areas for Airbnb investment in Kamuela (Waimea), Hawaii include the Waimea town center near Parker Ranch headquarters, which attracts business travelers and tourists interested in paniolo (Hawaiian cowboy) culture and the annual Fourth of July Rodeo events. The Kohala Mountain foothills area offers cooler temperatures and scenic ranch views, appealing to visitors seeking a unique upcountry Hawaiian experience away from beach crowds. Properties near Waimea-Kohala Airport capture business travelers visiting Parker Ranch operations and agricultural ventures, while the area around Hawaii Preparatory Academy attracts visiting families during school events and graduations. The historic Puuopelu district benefits from proximity to cultural sites and the weekly Waimea Farmers Market, drawing agritourism enthusiasts. Areas near Merriman's restaurant and other upscale dining establishments in town center perform well due to culinary tourism, and properties with easy access to both Mauna Kea and Mauna Loa attract stargazers and adventure tourists year-round, particularly during winter months when snow activities are possible on the mountain peaks.

Airbnb properties in Kamuela, 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 Hawaii County also imposing an additional 3% transient accommodation tax, bringing the total tax burden to approximately 17.962% of gross rental income. These taxes are collected either directly by Airbnb through their automatic tax collection service for participating jurisdictions or must be collected by hosts from guests and remitted monthly to the Hawaii Department of Taxation using Form TA-2 for TAT and Form G-45 for GET, with payments due by the 20th of the following month. Host registration is required with the state tax department to obtain tax identification numbers, and detailed records of all transactions must be maintained. Exemptions are limited and typically apply only to stays exceeding 180 consecutive days which are considered permanent residency rather than transient accommodations, and certain properties may qualify for reduced rates if they meet specific affordable housing criteria established by Hawaii County, though most short-term rental properties in Kamuela will be subject to the full tax rates.

Starting an Airbnb in Kamuela, Hawaii requires significant upfront investment with property purchase being the largest expense at approximately $850,000 for a median 3-bedroom home suitable for vacation rental. Furnishing costs typically range $25,000-$35,000 to create an attractive, fully-equipped space with quality furniture, appliances, linens, and decor that meets guest expectations. Initial setup expenses including professional photography, listing creation, welcome materials, and basic supplies total around $3,000-$5,000. Hawaii County requires a Conditional Permit for vacation rentals costing $2,500 plus legal fees of approximately $3,000-$5,000, while state and county business licenses add another $500. Insurance specifically for short-term rentals runs $3,000-$4,000 annually, significantly higher than standard homeowner's insurance. Utility setup and deposits for electricity, water, internet, and cable total approximately $1,500, with monthly costs averaging $400-$600. First six months of operating expenses including utilities ($2,400-$3,600), cleaning services ($3,600 assuming $150 per turnover), property management if outsourced (20-30% of revenue, approximately $6,000-$9,000), maintenance reserves ($2,000), and marketing costs ($1,000) total roughly $15,000-$21,000. The complete startup investment ranges from $900,000 to $925,000, making Kamuela one of the more expensive markets for Airbnb investment due to high property values and strict regulatory requirements.

Airbnb properties in Kamuela, Hawaii typically generate strong profitability with average daily rates ranging from $200-400 depending on property type and amenities, resulting in annual gross revenues of $50,000-120,000 for well-managed properties. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($75-150 per turnover), property management (15-25% of revenue), utilities ($200-400 monthly), insurance ($2,000-4,000 annually), and maintenance costs. Net profit margins typically range from 25-45% for successful properties, with luxury homes near Mauna Kea Resort commanding premium rates and achieving higher margins. Success factors include proximity to popular attractions like Mauna Kea Beach, professional photography, responsive guest communication, and maintaining 4.8+ star ratings. Properties with ocean views or unique features like private pools can achieve occupancy rates of 70-85% year-round, while standard homes average 60-75% occupancy. The Big Island's growing tourism market, particularly in the Kohala Coast region where Kamuela is located, has supported consistent demand, though properties must compete with resort accommodations and navigate Hawaii's evolving short-term rental regulations that vary by county zoning.

Airbnb investments in Kamuela, Hawaii typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties in this Big Island location, particularly those near Mauna Kea Beach Resort and Parker Ranch areas, command average daily rates of $200-350 depending on size and amenities, with occupancy rates averaging 65-75% annually. Initial investment costs range from $600,000-1.2 million for suitable vacation rental properties, with investors typically reaching profitability within 18-24 months after accounting for furnishing, marketing, and operational expenses. The luxury vacation rental market in Kamuela benefits from proximity to world-class golf courses, beaches, and the Mauna Kea observatories, driving consistent demand from high-end travelers, though investors should factor in Hawaii's strict short-term rental regulations and potential seasonal fluctuations that can impact returns by 15-20% during slower periods.

STRSearch leads the market in Airbnb investment property analysis nationwide including Kamuela, Hawaii, providing comprehensive market data and profitability projections. Local Kamuela specialists include Big Island Real Estate Group, Kohala Coast Properties, and Hawaii Life Real Estate Brokers who have extensive knowledge of vacation rental regulations and high-performing neighborhoods around Waimea and Mauna Kea Resort areas. Coldwell Banker Island Properties and Compass Real Estate maintain strong presences on the Big Island with agents experienced in short-term rental investments. National services like Awning, Mashvisor, and AirDNA offer market analytics and property identification tools specifically for vacation rental investors targeting the Kamuela market. RedAwning and Vacasa provide both property management and acquisition consulting services for investors seeking turnkey Airbnb operations in the area. Local property management companies such as Elite Pacific Properties and Aloha Condos often assist investors in identifying profitable properties before they hit the general market, while vacation rental specialists like Hawaii Vacation Rental Management Group offer comprehensive investment advisory services including market analysis, property acquisition assistance, and ongoing management for the Kamuela and greater Kohala Coast region.