Buying a vacation rental property on Kauai can be a great investment!

How does it work? There is a lot to consider as you decide which property to buy as your vacation rental.  Here is some information that should help you in determining which property will be best for you!

Before we get deep into the details it's important to remember that as a Realtor I help people buy and sell real estate on Kauai. If you are interested in another Hawaiian island I'd be happy to connect you with someone great who can help you there.

When looking at a vacation rental property on Kauai as an investment it's important to think about what people on vacation want.  Here are some of the top request and concerns, these items effect the properties value and what people are willing to pay for it on a nightly rental bases.

    1. Oceanfront (this could be on the bluff for example in Princeville)
    2. Almost oceanfront (could be accross the street or within 3 minutes of walking)
    3. Ocean View
    4. Privacy
    5. Walk-Ability to Restaurants and to the Beach
    6. Number of Bedrooms (more bedrooms = higher nightly rental rate)
    7. Sunset Views
    8. The Condition of the Property

Because of the laws on Kauai, not every property can be used as a vacation rental.  This makes the properties that can be used as a vacation rental more valuable.  Properties that can be used as vacation rentals fall into one of two categories:

    1. They are located in A VDA (Visitor Destination Area) like Princeville and Poipu
    2. . They have a TVR (vacation license). The county of Kauai is not giving out vacation licenses so a property either has one, or it doesn't.

We know investments do change with time (they can worst, stay the same, or get better).  It's important to consider these variables for each property.

Vacation rental properties are more than an single stream income investment.  As with all real estate investments you have both the cash flow and the potential value increase in the physical property.  As you consider a specific property that has been used as a vacation rental in the past, I can provide you with the rental history. This should give you both the amount of income the vacation rental generated, and the amount of expense it incurred (repairs, management, taxes, etc). If the house or condo wasn't used a a vacation rental it will be important to look at what similar properties in similar location and conditions are making.

For the general purposes of this blog here is the general types of owners of vacation rentals on Kauai are making.  This data supplied by one of the great vacation management companies on Kauai.

  • Luxury Beach House: $600,000 a year
  • Nice beach house: $250,000 a year
  • 4-5 Bedroom home on the bluff in Princeville: $200,000 a year
  • 3 Bedroom Oceanfront Condo in Poipu: $110,000 a year
  • 1 bedroom Condo in Poipu with an ocean view: $35,000 a year

Weather your budget and tastes take you to a vacation rental on Hanalei bay, or a condo in Poipu. Owning a vacation rental property on Kauai can be both financially rewarding and a lot of fun!  


If you're interested, or would like more information please don't hesitate to reach out to me!  I'm always happy to help!


Anne Eliason


Posted by Anne Eliason on


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We are interested in more information about rental property in Kauai to purchase in the Poipu area

Posted by Rowdy Daigle on Monday, February 25th, 2019 at 8:55am

Interested in purchasing a vacation rental near Nawiliwili or Princeville with one or two partners. Is this possible?

Posted by Danny Crowl on Sunday, July 28th, 2019 at 5:24pm

Do you still offer advice for people interested in investing in vacation homes? Thanks!

Posted by Susan Stevens on Sunday, October 20th, 2019 at 3:42pm

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