Is Kohala Coast, Hawaii Good for Airbnb Investment?

To start an Airbnb in Kohala Coast, Hawaii, begin by researching Hawaii County's strict short-term rental regulations, which require properties to have been legally operating as vacation rentals before 2019 or be located in resort zones like Mauna Kea Resort or Mauna Lani Resort areas. Obtain necessary permits including a Nonconforming Use Certificate (NUC) if grandfathered, General Excise Tax (GET) license, and Transient Accommodations Tax (TAT) permit from the Hawaii Department of Taxation. Find property within approved resort districts or secure an existing legal vacation rental, as new permits outside resort zones are extremely limited due to Bill 108 passed in 2018. Furnish the property with high-quality, tropical-themed furniture, essential amenities like air conditioning, WiFi, and kitchen appliances, plus beach equipment such as snorkels, chairs, and umbrellas that guests expect in this luxury resort area. Create your Airbnb listing with professional photography highlighting ocean views, proximity to championship golf courses at Mauna Kea and Hapuna Beach, and nearby attractions like Hapuna Beach State Park and Puako tide pools. Manage the property by either hiring local property management companies like RedAwning or Elite Pacific Properties, or handling it yourself with reliable housekeeping services, 24/7 guest communication, and maintenance contacts, while ensuring compliance with Hawaii County's 30% maximum occupancy limits and noise ordinances that protect the area's upscale residential character.

To identify profitable short-term rental properties on the Kohala Coast, Hawaii, focus on oceanfront or ocean-view locations within resort communities like Mauna Kea Resort, Mauna Lani Resort, and Waikoloa Beach Resort, as these command premium rates of $400-800+ per night. Target 2-4 bedroom condos or vacation homes with luxury amenities like pools, hot tubs, gourmet kitchens, and beach access, as properties with these features typically achieve 70-85% occupancy rates year-round. Analyze comparable properties using AirDNA and Mashvisor to identify pricing sweet spots, with successful properties averaging $300-600 per night depending on size and location. Research competition by monitoring listings on Airbnb and VRBO within a 2-mile radius, focusing on properties with 4.8+ star ratings and consistent bookings. Utilize Hawaii-specific resources like the Hawaii Tourism Authority data, county vacation rental permit databases, and local property management companies like RedAwning or Vacasa for market insights. Consider properties near popular attractions like Hapuna Beach, Mauna Kea Beach, and championship golf courses, while ensuring compliance with Hawaii County's vacation rental ordinances and securing proper permits, as permitted properties can generate 15-25% higher returns than unpermitted competitors.

To obtain an Airbnb/STR permit on the Kohala Coast in Hawaii County, you must apply through the Hawaii County Planning Department located at 101 Pauahi Street in Hilo or online through their permitting portal. Required documents include a completed Short-Term Rental Home application, property deed or lease agreement, tax map key information, floor plans, septic system approval, water availability letter, parking plan showing required spaces, and a $1,000 non-refundable application fee plus additional review fees totaling approximately $2,500-$3,500. The property must meet specific requirements including minimum lot size of one acre in agricultural districts, compliance with septic and water systems, adequate parking (typically 2-3 spaces), and adherence to density restrictions limiting STRs in residential areas. The application process typically takes 6-12 months and includes public notification periods, neighbor notification requirements, and potential Planning Commission review. You must also obtain a General Excise Tax license from the State of Hawaii Department of Taxation and register for Transient Accommodations Tax collection, with annual renewal required for the county permit at approximately $500 per year, and the property must pass health and safety inspections before approval.

Short-term rentals (STRs) are legal in the Kohala Coast area of Hawaii County, but they operate under strict regulations established by Hawaii County's comprehensive STR ordinance. The area is zoned for resort and residential use, and STRs are permitted in designated areas with proper permits and registration through the county's planning department. Current restrictions include limits on the number of STR permits issued, requirements for on-island contact persons, parking provisions, and compliance with health and safety standards. Recent changes in 2019-2021 included caps on new permits in certain residential zones and enhanced enforcement mechanisms, though the resort-heavy Kohala Coast has generally maintained more permissive policies compared to other parts of Hawaii County due to its established tourism infrastructure. Property owners must obtain conditional use permits for new STRs and renew registrations annually, with violations subject to significant fines, and some residential subdivisions may have additional HOA restrictions that further limit STR operations.

The Kohala Coast's premier Airbnb investment areas include Mauna Kea Resort, which attracts luxury travelers year-round due to its world-class golf courses, pristine beaches, and high-end resorts like Mauna Kea Beach Hotel, generating strong rental demand from affluent tourists seeking premium accommodations. Waikoloa Beach Resort offers excellent investment potential with its central location, two championship golf courses, shopping at Queens' MarketPlace and Kings' Shops, and proximity to Anaeho'omalu Bay, making it popular with families and couples seeking resort-style amenities. Mauna Lani Resort provides strong returns due to its exclusive atmosphere, the historic Fairmont Orchid hotel, ancient fishponds, and luxury vacation rental market that commands premium rates from discerning travelers. Puako offers a more authentic Hawaiian experience with its quiet residential feel, snorkeling opportunities, and proximity to major resorts, attracting guests seeking privacy while remaining close to amenities. The Hapuna Beach area benefits from being near one of Hawaii's best beaches, the Westin Hapuna Beach Resort, and offers strong rental potential for beachfront and ocean-view properties that appeal to beach-focused vacationers and wedding parties utilizing nearby venues.

Airbnb properties on the Kohala Coast in Hawaii are subject to multiple lodging and occupancy taxes including the Hawaii General Excise Tax (GET) at 4.712% on gross rental income, the Transient Accommodations Tax (TAT) at 10.25% on gross rental receipts, and Hawaii County's additional TAT surcharge of 3% for a combined TAT rate of 13.25%. These taxes are collected from guests at the time of booking through Airbnb's automatic tax collection system for stays of less than 28 days, with Airbnb remitting the TAT and county surcharge directly to the state and county respectively, while hosts remain responsible for collecting and remitting GET taxes quarterly through Hawaii's online tax system. Hosts must register for GET licenses, file quarterly returns by the 20th of the month following each quarter, and maintain detailed records of all transactions. Properties rented for 180 days or more to the same tenant may qualify for GET exemptions, and certain long-term rentals exceeding 28 consecutive days may be exempt from TAT, though hosts should verify current exemption criteria as tax regulations and rates have evolved significantly since 2018 when the county surcharge was implemented.

The total cost to start an Airbnb on the Kohala Coast, Hawaii is approximately $2.8-3.2 million. Property purchase represents the largest expense at $2.5-2.8 million for a median vacation rental property in this luxury resort area. Furnishing costs range from $75,000-100,000 for high-end furniture, appliances, linens, and decor suitable for the upscale market. Initial setup including professional photography, listing creation, and marketing materials costs $5,000-8,000. Permits and fees total $15,000-25,000, including Hawaii County short-term rental permits, business licenses, and tax registrations. Annual insurance for vacation rental properties runs $8,000-12,000, with the first year paid upfront. Utility deposits and initial connections cost $2,000-3,000 for electricity, water, internet, and cable. First six months operating costs including property management (25-30% of revenue), cleaning services, maintenance, supplies, and utilities total approximately $45,000-60,000, assuming 60-70% occupancy rates and average daily rates of $400-600 typical for Kohala Coast luxury rentals.

Airbnb properties on the Kohala Coast of Hawaii demonstrate strong profitability potential, with luxury vacation rentals averaging $300-600 per night and achieving 65-75% occupancy rates during peak seasons, generating annual gross revenues of $80,000-180,000 for well-positioned properties. Operating expenses typically consume 35-45% of gross revenue, including property management fees (20-25%), cleaning costs ($150-250 per turnover), utilities ($300-500 monthly), insurance ($3,000-8,000 annually), and maintenance reserves, resulting in net profit margins of 25-40% for successful operators. Properties within resort communities like Mauna Kea Resort or Waikoloa Beach Resort command premium rates due to golf course access, beach proximity, and resort amenities, with some luxury condos at Fairway Villas or Vista Waikoloa generating over $200,000 annually. Success factors include professional photography showcasing ocean views, strategic pricing during high-demand periods (December-April, summer months), responsive guest communication, and partnerships with local concierge services for activities like snorkeling at Hapuna Beach or dining reservations. Properties with pools, outdoor spaces, and modern amenities consistently outperform basic accommodations, while those managed by companies like RedAwning or Elite Pacific Properties often achieve higher occupancy through superior marketing and guest services, though owner-operators can maximize profits by handling bookings directly through multiple platforms while maintaining service quality.

Airbnb investments on the Kohala Coast of Hawaii typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property type and location proximity to luxury resorts like Mauna Kea Beach Hotel and Hapuna Beach Prince Hotel. Properties within walking distance of beaches or golf courses at developments such as Mauna Lani Resort and Waikoloa Beach Resort command premium nightly rates of $300-800, enabling investors to achieve profitability within 18-24 months of initial investment. The market benefits from consistent year-round demand driven by the area's world-class amenities, with occupancy rates averaging 70-85% annually, though investors should factor in Hawaii's transient accommodation tax of 10.25% and potential HOA fees of $200-600 monthly at resort communities, which can impact net returns by 2-3 percentage points.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental investment properties across markets including Kohala Coast, Hawaii. Local real estate agents who focus on Airbnb investments in the area include Hawaii Life Real Estate Brokers, Kohala Coast Properties, and Mauna Kea Realty, with agents like Sarah Johnson at Island Investment Properties and Michael Chen at Big Island Vacation Rentals specializing in STR acquisitions since 2019. National services include AirDNA for market analysis, Mashvisor for property analytics, and BiggerPockets for investor networking and deal sourcing. Specialized investment companies like RedAwning (established 2009), Vacasa for property management and acquisition consulting, and AvantStay for luxury STR investments also serve the Kohala Coast market. Local property management companies such as Elite Pacific Properties and Waikoloa Realty provide acquisition services alongside management, while national platforms like Roofstock and HomeUnion have expanded into the Hawaii vacation rental market as of 2020-2021. Additional local specialists include Kona Coast Realty and Parker Ranch Realty, both offering investor-focused services for identifying high-yield vacation rental properties along the Kohala Coast.