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Do You Own A Vacation Rental? You May Want To Read This
Posted by Ali'i Beach Rentals | Friday, August 2, 2019

We wanted to let you know about an important law that recently passed (Bill 89) which as of Aug. 1st, 2019 prohibits short term rentals (less than 30 days) in properties that are not in resort zoning or do not have what’s called a Nonconforming Use Certificate (NUC). Nonconforming Use Certificates run with a condo and allow a particular unit to be rented less than 30 days even though the building isn’t in resort zoning. The last NUC was issued in 1989 and no new NUCs are being Issued. It is very important to us that we follow this new law because the fines for breaking the law can be up to $10,000/night for violations and the owner is the one cited, not the property manager. 

That being said, we think this poses a unique opportunity. We can’t know for sure at this point, but we believe that the buildings that are predominantly short term rentals will begin to have a mass sell-off when owners begin to realize that they will no longer be able to do short term rentals in those buildings after Aug. 1st. It stands to reason that if the real estate market is flooded with sales in a particular building then property values will go down in that building. This Bill 89 is very new and we have not seen the effects in the market yet, so time is of the essence.

On the converse side, we think that property values in resort zoning or units with a NUC will appreciate in value because they will be the only properties left on the island that someone can do short term rentals in. Also, when the 10,000-20,000 illegal vacation rentals get shut down on the island because of Bill 89 we speculate that the nightly rate we can change for short terms rentals (less than 30 days) will increase significantly. Possibly even up to 50% by next year. Again we don’t know all this will happen for certain, but at this point, it seems likely. Again, Bill 89 is very new and we have not seen the effects in the rental market yet, so time is of the essence.

What does this mean for you? We are suggesting you reposition your investment in a property that we can do short terms rentals in. By doing so you might be avoiding decreasing property value for the property you currently own, purchase a property that is more likely to appreciate in value, and take advantage of the higher nightly rents associated with the legal nightly rentals that are left when the 10,000-20,000 illegal nightly rentals are shut down.

Don’t take our word for it! Please discuss this issue with your trusted Real Estate agent granted they are experienced with Vacation Rental Real Estate in Waikiki. If you don’t have an agent that meets these qualifications please let me know and I will refer you to one. We work with a few of the best Real Estate Agents on the island that specializes in this particular type of short term rental investment. We’ll work with whatever agent you choose and help to relocate your investment to a more profitable one. Nobody knows estimated rents better than us because we have multiple properties throughout Waikiki in all the buildings that are doing well.

If you or your agent would like to have a phone conversation about the implications of these changes please call our office at (808) 769-6800 ext. 4 and schedule an appointment to speak with a vacation rental expert, or you can fill out our contact form here. Mahalo!!


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