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The Coconut Chronicles

The Newsletter

Volume CC XIV, featuring Maui Vacation Rental Properties for Sale: The Coconut Chronicles

Aloha! Welcome to the Fourteenth edition of "The Coconut Chronicles" presented by Billy and Pete Jalbert, Realtors for Jim Sanders Realty in Paia, Maui. For our fourteenth edition we have articles on Kapalua, and buying vacation rental properties. If you have been reading the Coconut Chronicles from the beginning, you probable have noticed that we have covered almost all of the major communities on Maui. Kapalua is the last major community that we will be featuring. We will be making some changes in the format of the Chronicles in the future. If there are any topics you would like to see us cover in our newsletter, please feel free to send us an e-mail. We hope you enjoy the Chronicles and look forward to helping you find a home on Maui.

Billy and Pete’s picks looks at Maui Vacation Rental Properties.

Hands down, we receive the most inquiries on our website from customer's looking for second homes or condos. More often than not, when looking for a second home, people are interested in properties that will allow them to do vacation rentals. This month, we are going to take a look at some of the things that are important to know when looking for a vacation rental property and the ins and outs of vacation rental management. We will also provide some information on some current vacation rental listings.

Cash Flow

This is a question that comes up most often, so let's get it out of the way at the beginning. The Maui Real Estate market has appreciated considerably for the last 4 or 5 years. The rents for vacation rental condos have not appreciated at anything close to a comparable rate. Unless you are putting something in excess of a 50% down payment, it is extremely difficult to be cash flow positive on a vacation rental property. Income from vacation rental is a means of helping to cover some of the expenses of owning a condominium. The same may be said of homes for vacation rentals.

Finding the Right Property


With condos, the first important thing to do is to find a property that allows vacation rentals. There are a number of condos on island that are geared towards owner occupants prohibiting any sort of short term rentals. That being said, not all condos that allow vacation rentals are created equal. What differentiates the vacation rental complexes that garner higher occupancy vs. those with lower occupancy rates are amenities and of course location. Properties that are on premier beaches or across the street from premier beaches tend to be strong draws. Amenities can also be a draw. Tennis facilities, onsite stores and restaurants and central a/c are all draws. Central a/c is something that can be particularly helpful for higher occupancy during the warmer summer months.


Looking for a vacation rental home can be a bit more challenging than finding a vacation rental condo. There are a number of communities in areas that would be desirable for vacation rentals that have specific covenants that prohibit vacation rentals. In those areas where vacation rentals are permitted, it is worth doing some due diligence on the neighborhood. As it stands, there is some discussion of cracking down or prohibiting vacation rentals in private homes. It is important to know if your future neighbors would be amenable to vacation rentals. The best bet is to find a home that is currently being used for vacation rentals. Vacation rental use does not always transfer with the property. Sometimes use permits for vacation rentals are owner specific. This necessitates that the new owner apply for new use permits. While there are challenges to finding a legal vacation rental home, The Maui Real Estate Team are committed to working with buyer's to get their questions answered from the best resources on vacation rentals.

Finding a Vacation Rental Management Company

Vacation rental management companies charge anywhere between 20% and 50% of the gross income one might expect to earn from renting a property. The larger operations tend to take 50% while smaller locally based companies charge the lesser amount. The 50% fees are usually all inclusive whereas that 20% fees are more of an a la carte with additional charges for bookings, cleaning etc. With the larger companies, one can usually expect strong marketing and higher occupancy. They tend to have more established websites and strong affiliations with online travel agencies such as Travelocity and Orbitz. Smaller companies generally have lower occupancy rates. They may not have as strong a marketing presence or a relationship with the online travel agencies. That being said, with them taking a smaller percentage of the rental income, the net proceeds from big and small companies tend to come out fairly even. The one argument I have heard in favor of some smaller companies is worth mentioning. More occupancy down the line can lead to greater wear and tear on a unit. These are hidden costs that may add up down the line. It is important to note that different companies have different policies and sometimes it is hard to make an "apples to apples" comparison of rates.

With the relatively high overhead associated with property management, some people consider doing vacation rentals by themselves. This can be a viable option if you make sure all your bases are covered. Here are few things to consider. You will need to hire a cleaning crew to make sure the rooms are cleaned for guests. You will also need someone on island who will manage any maintenance issues that might come up on the property. Of course, you also need to make sure your property gets good exposure. VRBO is the best Internet portal for attracting visitors. To maximize exposure, it is advisable to use multiple vacation rental portals. When doing your own vacation rentals, it is pretty common to start slow and see success build as you get a base of repeat customers. The best way to get repeat customers is to make sure you have unit that stands out. Nice new furnishings can go a long way towards differentiating you from other condos in the complex that do vacation rentals.

Some properties have their own vacation rental management companies / front desks that handle reservations etc. This is also an attractive option. In addition there are some vacation rental management programs like Resortquest at Kaanapali Shores where rental proceeds are averaged out among all participants in the program. Like units share revenues with like units (e.g. 2 bedroom ocean views share with 2 bedroom ocean views etc.). A majority of the units that are doing vacation rentals in Kaanapali Shores with under the Resortquest program. The common feedback we here from both owners and guests is that they enjoy the consistency and predictability.

Popular Condo Complexes for Vacation Rentals

Kamaole Sands

Kamaole Sands is the largest and most popular vacation condo complex for vacation rentals in South Maui. Kamaole Sands features studio, 1, 2 and 3 bedroom suites. Its beautiful grounds, nice condos, amenities and location across from the Kamaole Beach Parks have made this complex incredibly popular for second home owners and vacation renters. That being said, there are a few things to keep in mind regarding the complex. There are some buildings that are a bigger draw than others. "The Inner Circle" consists of buildings 1, 2, 3, 5, 6, 7 and 10. These 7 buildings face into a central garden area that is both visually appealing and more tranquil. Buildings 4, 8, 9 and 10 are generally lower priced and have less demand for vacation rentals because of road noise / location. As a result, it is harder to find companies that will do vacation rental management in those buildings in the complex. Castle Resorts is the major player when it comes to vacation rentals in Kamaole Sands. Recent sales in the complex have ranged between the mid to high $300,000s for outer circle one bedroom/ two bath condos to the mid to high $600,000s for 2 bedrooms. As it stands, the current list price for one bedrooms are in the mid $400,000s. Click for current Kamaole Sands Listings

Maui Kamaole

Maui Kamaole is in the same general vicinity as Kamaole Sands. It is a little bit more upscale end Kamaole Sands and there are no "bad condos" in the complex. The complex has amenities such as 2 pools, tennis courts and beautiful grounds. There are a total of 316 condos in 13 buildings with a variety of one and two bedroom floor plans. This complex is popular with vacation renters and vacation rental management companies. Recent sales have ranged from the $500,000s for one bedrooms all the way up to the high $900,000s for front row, ocean view 2 bedroom condos.
Click here for current listings at Maui Kamaole I

Click here for listings at Maui Kamaole II
Click here for listings at Maui Kamaole III

Sugar Beach

Sugar Beach is the most popular vacation rental condo in the North Kihei Area. Its popularity stems from its amenities which include, pool, Jacuzzi, tennis, putting green, restaurant and convenience store. It also helps that it is steps from the longest and best walking beach on the island. This complex is popular with both vacation renters and management companies. Recent sales have started in the $500,000s.
Click here for listings at Sugar Beach Condominiums

The Whaler

Ka'anapali Beach is one of the most popular if not the most popular beach on Maui. With clear waters, a broad sandy beach and a great walkway for taking a stroll, the reasons for its popularity are readily apparent. The flagship condo complex of the Ka'anapali Beach area is the Whaler. Great views, nice amenities, beautiful grounds and the Shops at Whalers Village make this a popular location for vacation rentals. Condos at the Whaler sell for a premium. Studios are generally starting in the $700,000 range with one and two bedroom models going for prices that range from the $800,000 range all the way to over $3,000,000 for penthouse premium
Click here for listings at Whaler I
Click here for current listings at Whaler II

Ka'anapali Shores

Ka'anapali Shores is a good alternative to the Whaler at a lower price. It boasts comparable amenities with a pool, sauna, tennis, gift shop, convenience store and restaurant. Prices range from the high $300,000s and $400,000s for studios to the $500,000s for one bedrooms and the $700,000s for two bedrooms. It features the Resortquest rental program mentioned above. Click here for Current Listings at Ka’anapali Shores

This article was published in January of 2006. If you are interested in any of these properties or you would like to discuss vacation rental condos in greater detail or you would like a current market update on Maui Vacation Rental Condos for Sale, contact us today.

Maui Moments: Teaching someone to surf for the first time.

Billy and I were fortunate to have our sister and her family pay us a visit for two weeks over the holidays. Our oldest niece Molly is an avowed water rat and let it be known to her mother and to us that she desperately wanted us to teach her to surf. It was an opportunity both Billy and I relished. Massive winter waves crashed on the North Shore for most of the duration of her visit, so we headed over to the more placid waves near Lahaina.

Billy and I warmed up on our stand up paddle boards for a few waves while Molly played with the rest of the kids in the sand. I looked on shore after a couple of rides and could tell Molly was chomping at the bit to get out on the water so I paddled into shore. My stand up paddle board is ten feet long and over four inches thick. This makes it a good vehicle for tandem surfing. I laid my niece on the front of the board while I lay on the back and did the paddling. The waves were no more than one to maybe two feet at their largest so they were ideal for learning to surf. There was no clear channel so we plowed directly through the small whitewater. Molly didn't flinch at all and instead started to laugh. I reached the point where the waves were breaking and we waited for a wave to come to us. It did not take long. I struggled to pivot the two of us on the board so that we were facing the beach, but I managed to get us around in time. I took a few strong paddles as I felt the tail of the board rise with the wave. Another strong paddle and I could feel that we were starting to glide with the wave. We both lay prone on our bellies enjoying the gentle ride from the ocean's energy. The wave started to dissipate and Molly turned around to look at me with a big smile on her face. The smile was all that we needed to see for me to turn around and start paddling quickly back towards the lineup.

We started to make progress with our rides. We went from both being prone, to Molly lying prone and me standing, to me lying prone and Molly standing and finally to the point where we were both standing on the boards. Each wave brought a big smile on Molly's face. After about 45 minutes, we made our way to the beach. Molly was beaming as she and I left the water. Her questions about "reading" and riding waves over the next few days were a pretty clear indicator that she was just as hooked on surfing as her uncles!

The next few days we spent time playing at beaches that were not as surf friendly. Molly was anxious to get back to the water and her Mom was eager to give surfing a try herself. The next opportunity came on Christmas day when we decided to forego the traditional Christmas dinner with all of the trimmings for a more Hawaiian Style picnic on the beach. We could not have had a more beautiful day. Molly was eager to get back on the board. This time, Billy had the privilege of taking out Molly on the nose of his board. I followed on my paddle board coaching Molly's mom as she made her first excursion out on the board. Molly picked up right where we left off quickly popping up and getting into a surfer stance with an ear to ear grin. Her mom struggled a bit more as she learned the challenges of the sport. With a little bit of laughter and encouragement, Michele started catching rides herself. It was great watching Molly and Billy spin lap after lap on the small wave getting lots of fun rides. It was pretty special for us to have the chance to share our own love of the ocean with our family members. It was all smiles on the beach as we watched a beautiful sunset, enjoyed a nice meal with family and friends and Molly reveled in the memories of her first wave riding experiences.

Volume 14 » continued in Coconut Community Spotlight: Kapalua...