Is Maui, Hawaii Good for Airbnb Investment?

Starting an Airbnb in Maui, Hawaii requires navigating strict local regulations that began with the Maui County Code Chapter 19.65, which severely limits short-term rental permits - as of 2021, Maui County stopped issuing new short-term rental permits in most residential areas, allowing them only in designated resort and hotel districts like Wailea, Kaanapali, and Kapalua Bay. First, research current zoning laws through Maui County's Department of Planning to confirm if your target property is in an approved zone, then apply for a Conditional Permit or Short-Term Rental Home permit (if still available) which costs approximately $5,000-$10,000 and requires neighbor notification, planning commission approval, and can take 6-12 months. Obtain necessary business licenses including a General Excise Tax license from Hawaii Department of Taxation, register for Transient Accommodations Tax (TAT) at 10.25% plus GET at 4.712%, and secure liability insurance of at least $1 million. When selecting property, focus on resort-zoned areas or existing legal short-term rentals, expect to invest $300,000-$2,000,000 depending on location and size, then furnish with tropical, durable furniture budgeting $15,000-$50,000 for a complete setup including appliances, linens, and safety equipment like smoke detectors and fire extinguishers required by law. List on platforms like Airbnb and VRBO with professional photography highlighting ocean views and local attractions, set competitive rates ($150-$800+ per night depending on property type and season), and either self-manage or hire local property management companies like RedAwning or Vacasa who typically charge 20-35% commission but handle cleaning, maintenance, guest communication, and ensure compliance with Maui's strict noise ordinances and occupancy limits.

To identify profitable short-term rental properties in Maui, Hawaii, focus on locations within 1-2 miles of popular beaches like Wailea, Kaanapali, or Napili, or properties with ocean views in areas like Kihei, Lahaina, and Paia, while avoiding heavily restricted zones in residential neighborhoods. Target properties with 2-4 bedrooms, outdoor spaces like lanais or pools, air conditioning, updated kitchens, and parking, as these command premium rates of $200-600+ per night depending on location and amenities. Analyze comparable properties on Airbnb and VRBO within a 1-mile radius to understand seasonal pricing patterns, with peak rates during winter months (December-April) and summer (June-August), aiming for properties that can achieve 70%+ occupancy rates and gross rental yields of 8-12%. Research competition density using AirDNA or Mashvisor to identify undersaturated micro-markets, and monitor local regulations through Maui County's planning department since many areas have strict STR permitting requirements. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Maui realtors, while connecting with property management companies like Elite Pacific Properties or RedAwning to understand operational costs, which typically run 25-35% of gross revenue including cleaning, maintenance, and management fees.

To obtain an Airbnb/STR permit in Maui, Hawaii, you must apply through the Maui County Planning Department's online portal or submit a paper application to their office at 2200 Main Street, Suite 315, Wailuku, HI 96793. Required documents include a completed Short-Term Rental Home (STRH) permit application, property deed or lease agreement, floor plans, site plan, tax map key information, proof of general excise tax license, transient accommodations tax license, written consent from neighbors within 500 feet, parking plan showing two off-street spaces, and a $1,000 non-refundable application fee plus additional fees for inspections and permits totaling approximately $2,500-$3,500. Maui-specific requirements include compliance with the county's cap on STRH permits (limited to existing legal units as of 2021), adherence to zoning restrictions (primarily in apartment and hotel districts), maximum occupancy of two guests per bedroom plus two additional guests, 24/7 local contact person requirement, noise ordinance compliance, and mandatory annual renewal with a $500 fee. The timeline typically ranges from 6-12 months due to the review process, public hearing requirements, and potential appeals, though new applications are currently extremely limited due to the moratorium on new permits in most residential areas implemented after 2021.

Short-term rentals (STRs) on Maui, Hawaii face significant legal restrictions as of 2024, with Maui County implementing some of the strictest regulations in the state following years of community concerns about housing shortages and overtourism. STRs are generally prohibited in residential and agricultural districts, with existing legal operations primarily limited to resort and hotel districts, and only properties that obtained permits before various cutoff dates (ranging from 2012-2019 depending on the specific area) can continue operating legally. The county has been actively phasing out non-conforming STRs, particularly after the devastating Lahaina fires in August 2023, which intensified focus on preserving housing for residents rather than tourists. Maui County requires all legal STRs to have proper permits, pay transient accommodation taxes, and comply with strict operational requirements including noise restrictions, parking requirements, and occupancy limits. Recent legal changes include increased enforcement against illegal operators, higher penalties for violations, and discussions about further reducing the total number of permitted STRs to address the ongoing housing crisis, with some areas like West Maui seeing additional restrictions following the 2023 wildfires that displaced thousands of residents.

The best Airbnb investment areas in Maui include Wailea, which attracts luxury travelers with its high-end resorts, championship golf courses, and pristine beaches, commanding premium nightly rates year-round. Kihei offers excellent value with its consistent sunshine, proximity to Wailea's amenities, and appeal to families and budget-conscious travelers seeking beachfront access. Lahaina provides strong rental potential due to its historic charm, Front Street shopping and dining, and proximity to snorkeling at Black Rock, though investors should verify current rebuilding status post-2023 wildfires. Kaanapali delivers consistent bookings through its resort corridor, championship golf courses, and the famous cliff diving ceremony at Black Rock, attracting both luxury and mid-range travelers. Paia appeals to younger demographics and surfers with its bohemian vibe, proximity to Hookipa Beach's world-class windsurfing, and position as a gateway to the Road to Hana adventure. Makawao offers a unique upcountry experience for travelers seeking cooler temperatures, paniolo (cowboy) culture, and access to Haleakala National Park's sunrise viewing, providing differentiation from typical beach rentals and attracting visitors year-round for the volcano experience.

Airbnb properties in Maui, 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 proceeds, and the Maui County Real Property Tax which varies by property classification but can range from $5.05 to $13.90 per $1,000 of assessed value annually for short-term rental properties. The GET and TAT are collected by the Hawaii Department of Taxation, with hosts required to register for tax licenses and file monthly returns by the 20th of the following month, remitting taxes electronically through the state's online system. Maui County also requires short-term rental operators to obtain proper permits and pay applicable real property taxes directly to the county. Tax collection can be handled directly by hosts or through Airbnb's tax collection service in certain jurisdictions, though hosts remain ultimately responsible for compliance. Exemptions are limited and typically apply only to rentals of 180 days or more, owner-occupied bed and breakfasts with specific permits, or properties that qualify under very narrow residential exemptions, with most short-term vacation rentals being subject to all applicable taxes regardless of rental duration or frequency.

Starting an Airbnb in Maui, Hawaii requires significant upfront investment with property purchase being the largest expense at approximately $1,200,000 for a median-priced condo or home suitable for short-term rentals. Furnishing costs typically range from $25,000-$40,000 for a complete setup including furniture, appliances, linens, and décor to create an attractive vacation rental. Initial setup expenses including professional photography, listing creation, and marketing materials cost around $3,000-$5,000. Permits and fees are substantial in Maui, with short-term rental permits costing approximately $5,000-$8,000 plus annual renewal fees of $1,500, along with business license fees of $500-$1,000. Insurance for short-term rentals runs $3,000-$5,000 annually, significantly higher than standard homeowner's insurance. Monthly utilities including electricity, water, internet, and cable average $400-$600 per month, totaling $2,400-$3,600 for six months. First six months operating costs including cleaning services ($150-$200 per turnover), property management (20-30% of revenue if outsourced), maintenance, supplies, and platform fees (3% Airbnb commission) can range from $15,000-$25,000 depending on occupancy rates. The total estimated startup cost ranges from $1,250,000 to $1,285,000, making Maui one of the most expensive markets for Airbnb investment due to high property values and strict regulatory requirements implemented in recent years.

Airbnb properties in Maui, Hawaii demonstrate strong profitability potential with average daily rates ranging from $200-$400 for standard properties and $500-$800 for luxury oceanfront units, generating annual revenues of $75,000-$150,000 for well-positioned properties with 60-70% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including property management fees (15-25%), cleaning costs ($75-$150 per turnover), utilities ($200-$400 monthly), insurance ($3,000-$5,000 annually), and maintenance reserves, resulting in net profit margins of 25-35% for successful operators. Success factors include prime locations within walking distance to beaches like Wailea or Kaanapali, professional photography showcasing ocean views, responsive guest communication, and partnerships with local activity providers, with properties managed by companies like RedAwning and Vacasa consistently outperforming owner-operated units by 15-20% in both occupancy and rates. A case study of a 3-bedroom Kihei condo purchased for $800,000 in 2019 generated $120,000 in gross rental income in 2022 with $45,000 in operating expenses, yielding a 9.4% cash-on-cash return plus property appreciation, though recent regulatory changes in West Maui and increased competition have compressed margins by approximately 10-15% since 2023.

Airbnb investments in Maui, Hawaii typically generate annual ROI of 8-15% with cash-on-cash returns ranging from 12-22% for well-positioned properties near popular beaches like Wailea or Kaanapali. Properties in prime oceanfront or ocean-view locations can achieve gross rental yields of 6-10% annually, with average daily rates between $300-800 depending on property size and amenities. Most investors reach profitability within 18-36 months, factoring in Hawaii's high property acquisition costs averaging $800-1,200 per square foot and occupancy rates of 65-80% year-round due to Maui's consistent tourism demand. Short-term rental properties in resort areas like Lahaina or Kihei typically see faster returns due to premium pricing, while upcountry properties in areas like Makawao may take 3-4 years to reach full profitability but offer more stable long-term appreciation of 4-7% annually.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties across markets including Maui, Hawaii. Local Maui real estate agents who focus on investment properties include Compass Real Estate Maui, Coldwell Banker Island Properties, and Hawaii Life Real Estate Brokers, with agents like those at Maui Dream Properties and Island Sotheby's International Realty having expertise in vacation rental investments. National services that operate in the Maui market include Awning (formerly RedAwning), which provides end-to-end Airbnb investment services, Roofstock, which expanded into short-term rental properties around 2021, and Mashvisor, an analytics platform that helps investors identify profitable Airbnb markets. Local property management companies that also assist with acquisitions include Elite Pacific Properties, Maui Vacation Advisors, and AA Oceanfront Rentals & Sales, while specialized investment consultants like Hawaii Investment Properties and Maui Real Estate Investments focus specifically on helping investors navigate the complex regulations and identify profitable vacation rental opportunities on the island.