You’re on Maui on vacation and you get to thinking, we should buy a vacation condo. You are not alone. In fact, this is what we thought when we first started coming to Maui in January 2004. It eventually took us until 2010 to move here and buy our first three (the beginning of Maui Oceanview Condos), then another in 2011 and another in 2019. Sig has been intensely scrutinizing the vacation condo market since 2004. Let me clarify before proceeding – we are not realtors. Please seek out the professional advice of a local realtor if you are serious about buying. We know a few.
It’s a great dream
Think about it ~ owning a home away from home on Maui. Your own piece of paradise. Being able to escape mainland life, winter, rain, schedules, the extended family (oh, did I say that?), and relax at the beach…. What a great dream!
What’s the market these days?
Maui’s market is HOT. When Covid more or less shut down tourism for 7 months in April 2020, we just kept waiting for the market to crash. Vacation condo owners had mortgages, high homeowner association (HOA) fees, taxes and with no vacation rental income coming in, surely people would start struggling. Surprisingly the market did not drop, and starting in 2021 it just started spiking instead.
Right now, when a condo is listed, it is usually pending within a few days. Often times the realtor will just mention a new listing in the office, and it will be pending before even hitting the MLS. Crazee.
Is now the right time to buy?
That is the million $ question. Literally. Have you seen what condos are selling for? Prices have skyrocketed in the past 6 months. If you are truly looking to buy right now, you need to have all your ducks in a row, your money in place, realtor chosen, property research done and be ready to jump the minute you see a listing. Is it a smart move?
What are the best sites to find Maui listings?
Please note this is not an endorsement for certain realtors. Sig’s favorite listing site hands down is the Hansen Ohana. Things he likes about it are, easy searches by neighborhood, condo complex, shows all new listings on the front page, has direct links to the Maui County tax website. Why would you want to see the tax website? You can look up when the owners bought it and for how much, where they live (might give some insight as to why they are selling), if they are current on their taxes (half are due in February, the second half in August). Clint Hansen also hosts a radio talk show on 1110AM at 7AM every Monday morning, discussing Maui real estate news.
My default search engine is Island Sotheby’s. I’m not sure why. It comes up first when I search properties for sale. I guess Google chose it.
Consider what you are buying
As you contemplate whether or not to buy, consider your reasons for buying. Are you moving here? Will you be using the vacation condo for personal (friends and family) use only? Do you plan to vacation rent?
Are you willing to pay for an oceanview? Would you prefer West (Ka’anapali/Kapalua) or South (Kihei/Wailea) side? Do you want to deal with stairs, or is an elevator a must? When elevators break down, from experience it can take a week or two to get parts. Is air-conditioning a must? Believe it or not, there are still buildings that do not allow A/C for various reasons. Do you prefer wood or concrete/cinder block construction? Do you like high rises (I believe the tallest on Maui is 8 stories) or lower density? What about walkability? Storage? Climate change, rising of sea levels, road noise?
Look at zoning
There are numerous tax classifications (again, I am not a realtor, this is for general information only). Should you want a vacation rentable property, make sure the property is in what is called the ‘hotel zone’. These days politicians say they are quite focused on affordable housing, it is difficult to obtain vacation rental permits outside the hotel zone. Please inquire with your realtor for much more information on zoning.
Note that as of last year, any property you purchase in the hotel zone will automatically have the short term rental tax class associated with it, unless you are living in it full time or have it rented out long-term (long-term being 6 months or longer on Maui).
No more short-term rentals
The County has pretty much committed to no more short-term rentals being built. In fact, the most recent (2009) short-term rental property to have been built is on the north end of the Ka’anapali strip ~ the Honua Kai. It is a beautiful property. We looked at it briefly 8 years ago and actually did a stay-cation there. In the end we decided it was too far away for us to be the hands-on owners we strive to be.
Additionally, Maui County recently passed a 2 year moratorium on transient vacation property development. That’s right, for the next 2 years no new hotel construction will be started (I believe with exception of the addition to the Maui Coast Hotel in Kihei which was already approved). Politicians want to reign in tourism to more manageable levels.
Check out part 2 to this blog – so you want to own a vacation rental?