Airbnb & VRBO Performance in Kapaa Hawaii.

Short-Term Rental Regulations in Kapaa, Hawaii for 2024

Overview of Regulations

In Kapaa, Hawaii, which is part of Kauai County, the regulations for short-term rentals are governed by both county and state laws. Here are the key regulations:

Zoning and Permitted Areas

• Short-term rentals are limited to designated Visitor Destination Areas (VDAs) such as Princeville, Poipu, and the eastern Kapaa coastal tourism corridor.

County Authority

• Kauai County has the authority to regulate, amortize, or phase out transient accommodation uses in residential or agricultural zoned areas under Senate Bill 2919.

Minimum Stay Requirements

• In residentially zoned neighborhoods, the minimum stay for rentals is 6 months. However, this can be enforced differently depending on county-specific regulations.

Licensing and Permits

• Properties must obtain the necessary licenses and permits to operate as short-term rentals. This includes a Transient Vacation Rental (TVR) permit or a non-conforming use certificate (NUCs).

Tax Requirements

• Owners must register with the Hawaii Department of Taxation for a transient accommodations tax (TAT) license and a general excise tax (GET) license. They must also file periodic and annual TAT returns (Forms TA-1 and TA-2).

Insurance and Safety

• Eligible properties must have short-term rental insurance providing at least $1,000,000 in general liability coverage.

Compliance and Enforcement

• Non-compliance with the regulations can result in fines of up to $10,000 per day.

Grandfathering

• Legally operating short-term rentals located outside of the VDAs may be grandfathered in if they obtained non-conforming use permits before the new regulations took effect.

Impact on Housing

• The new regulations aim to address the affordable housing crisis by potentially phasing out short-term rentals in residential areas and converting them into long-term rental housing.

Top Neighborhoods for Airbnb Revenue in Kapaa, Hawaii

Why Kapaa Stands Out

Kapaa, located on the eastern coast of Kauai, is a highly sought-after destination for tourists due to its stunning beaches, hiking trails, and waterfalls, making it an ideal location for Airbnb investments.

Key Neighborhoods and Their Appeal

1. Coconut Coast

• Appeal: This area is centrally located and offers easy access to popular attractions like the Coconut Marketplace, free hula shows, and the Wailua River. Guests can enjoy shopping, dining, and various activities such as kayaking and boat rides.
• Revenue Potential: Properties here benefit from high occupancy rates and premium pricing due to their proximity to key tourist spots.

2. Lae Nani Beach Area

• Appeal: Known for its beautiful beaches and panoramic ocean views, this area is perfect for guests seeking a luxurious beachside experience. Properties often feature large private lanais, beach access, and modern amenities like air conditioning and private pools.
• Revenue Potential: The high demand for beachside properties and the ability to charge premium rates make this area highly profitable for Airbnb hosts.

3. Kauai's 7-Mile Bike Path

• Appeal: This area is popular for its convenient location near shops, restaurants, markets, and galleries. Guests can enjoy walking distance to various amenities and the scenic bike path that connects the north and south shores of Kauai.
• Revenue Potential: The combination of local amenities and scenic activities ensures high occupancy rates and consistent revenue for Airbnb properties.

4. Plantation Hale and Surrounding Areas

• Appeal: These areas offer well-maintained units with amenities like kitchens, wireless internet, and parking. Guests appreciate the historical and plantation-style homes that provide a unique and comfortable stay.
• Revenue Potential: The high average annual revenue per listing and strong occupancy rates in Kapaa make these areas attractive for investors looking to generate significant revenue from short-term rentals.

Key Metrics

• Average Daily Rate (ADR): $406
• Occupancy Rate: 69%
• Monthly Revenue: $65,575
• Property Prices: Average Airbnb property price in Kapaa is around $787,000, indicating a need for careful financial planning to ensure a favorable ROI.

Creating an Inviting Airbnb in Kapaa, Hawaii: Design and Furnishing Tips

Tips for Designing and Furnishing Your Kapaa Airbnb

1. Choose Durable and Low-Maintenance Flooring

Opt for high-end luxury vinyl plank (LVP) flooring, which is budget-friendly, resistant to humidity, and can withstand guest use, including wet towels and other moisture-related issues.

2. Update Kitchen and Bath Areas

Repaint existing kitchen cabinets instead of replacing them, and add floating shelves to create a more open and bright space. Replace tile countertops with quartz, a durable and budget-friendly option that stands up well to guest use.

3. Invest in High-Quality Furniture

Focus on solid wood furniture for pieces that get heavy use, such as coffee and dining tables. Avoid low-quality pieces that may need frequent replacement.

4. Select Practical and Stylish Upholstery

Use performance fabrics, even outdoor-grade fabric, in darker hues to hide dirt and stains. Avoid light upholstery to maintain the cleanliness and appearance of the space.

5. Enhance with Local and Tropical Elements

Incorporate wooden furniture, tropical prints, and ocean-themed decor to reflect Kapaa's unique style and connection to the outdoors.

6. Utilize Outdoor Living Features

Emphasize outdoor living with patio furniture and amenities like BBQ areas, which are highly appreciated by guests in Kapaa.

7. Add Cozy Bedding and Towels

Invest in high-quality bedding and towels. Ensure you have backup sets for each bed to maintain cleanliness and convenience for your cleaning team.

8. Use Washable Rugs

Install washable rugs to simplify cleaning and maintenance, making it easier for your cleaning team to keep the space clean and tidy.

9. Reinforce Furniture for Durability

Reinforce platform beds with bunkie boards to prevent breakage, especially in family-friendly rentals where children may be present.

10. Maintain a Clean and Fresh Appearance

Treat indoor upholstery and rugs with a liquid repellent to protect against spills and stains, ensuring the space remains clean and inviting for guests.

Discovering Kapaa, Hawaii: Local Attractions and Insider Tips

Local Attractions

Beaches and Outdoor Activities

• Kapa'a Beach and Waipouli Beach: Golden sand beaches just a block from the town center, perfect for relaxation and water activities.
• Ke Ala Hele Makalae (Kauai Coast Path): An 8-mile coastal bike path ideal for cycling, jogging, or a leisurely walk along the coast.
• Sleeping Giant Trailhead: A iconic hike offering panoramic views of Kapa'a, Waipouli, Kalepa Ridge, and Wailua Bay. Expect around 2 hours of hiking.
• Opaekaa Falls and Wailua Falls: Accessible waterfalls with scenic views, picnic areas, and historical significance.

Cultural and Historical Sites

• Kamokila Hawaiian Village: A historical village near Opaekaa Falls, offering insights into traditional Hawaiian life.
• Poliahu Heiau and Lookout: A sacred site with historical importance, located near Opaekaa Falls.
• Holoholoku Heiau: A treasured spot where only Alii (chiefs) were born, located off Kuamoo Road.

Dining and Shopping

• Pono Market: A deli-style eatery serving traditional Hawaiian dishes like poke, kim chee, and laulau. A local favorite for breakfast and lunch.
• Sam’s Ocean View: A restaurant with a scenic view, offering a happy-hour menu and dinner with Spanish, Italian, and Indian influences.
• Kiko: A boutique featuring upcycled goods, locally made products, and artwork from Hawaii-based artisans.

Events and Entertainment

• Kapaa Art Walk (First Saturday): A monthly event featuring live entertainment, food, and local artisans. Held from 5pm-9pm on the first Saturday of each month.
• Smith Family Garden Luau: A traditional Hawaiian luau with a tram tour, Imu ceremony, gourmet buffet, and the Rhythm of Aloha Show.

Insider Tips

Getting Around

• Walkability: The town center is extremely walkable, with shops, restaurants, and beaches within easy reach.
• Rent a Car: Recommended to explore other parts of the island, such as Waimea Canyon, Poipu, and the north shore.

Local Recommendations

• Listen to Locals: Engage with residents for insider tips on the best places to eat, shop, and explore.
• Early Visits to Pono Market: Arrive early to avoid missing out on popular items like homemade laulau.

Scenic Spots

• Nounou Mountain (Sleeping Giant): Enjoy the views and the legend behind this iconic landmark.
• Wailua River Activities: Take a Fern Grotto tour or kayak/SUP on the state’s only navigable river for a unique experience.

By sharing these attractions and tips, your guests will be well-equipped to enjoy the full charm and beauty of Kapaa, Hawaii.

Practical Tips to Run a Successful Short-Term Rental Business in Kapaa, Hawaii

To ensure the success and smooth operation of a short-term rental business in Kapaa, Hawaii, several practical tips can be implemented:

Noise Regulations and Quiet Hours

Inform your guests about the local noise regulations and quiet hours to maintain a respectful environment for both the guests and the neighbors. Include this information in your digital and physical house manual to avoid any misunderstandings.

Digital and Physical House Manual

Create a comprehensive house manual that includes essential instructions, Wi-Fi passwords, and other important details about the property. This manual should be easily accessible both digitally and in a physical form within the rental property.

Simplified Check-in Process

Utilize smart locks to streamline the check-in process, eliminating the need for physical key exchanges. Provide clear instructions on how to use the smart locks and ensure that guests receive all necessary access codes in advance.

Parking Instructions with Photos

Include detailed parking instructions in your house manual, accompanied by photos to help guests navigate any specific parking rules or restrictions. This will reduce the likelihood of parking issues and enhance the overall guest experience.

By implementing these strategies, you can enhance guest satisfaction, reduce potential issues, and maintain a positive reputation for your short-term rental property in Kapaa, Hawaii.

Here is a brief list of house cleaning providers in Kapaa, Hawaii:

House Cleaning Services in Kapaa, HI

ECO Kauai Services

• Offers deep and general cleaning services for residential and commercial properties.
• Specializes in thorough deep cleaning, including often-neglected areas and high-touch surfaces.
• Uses environmentally responsible cleaning products and practices.

Eleg Maid Service

• Provides professional and eco-friendly cleaning services.
• Delivers thorough cleaning to elevate home cleanliness.

Care.com Listings

• Features multiple house cleaning services and cleaning ladies in Kapaa, HI.
• Options start at $29.25/hr, with an average experience of 5 years among the listed services.

HomeAdvisor Listings

• Includes top-rated cleaning services experts in Kapaa, HI.
• Allows users to read real reviews and see ratings to pick the right professional cleaner.

Short-Term Rental Management Fees in Kapaa, Hawaii: A Guide to Costs and Services

In Kapaa, Hawaii, short-term rental management fees can vary significantly, typically ranging from 10% to 30% of the rental revenue, depending on the level of service provided. Full-service management companies, such as RE/MAX Kauai and Kauai Exclusive, offer comprehensive services including guest communication, aggressive marketing, and maintenance, which usually come with higher fees, often around 25% of the rental income before taxes.

On the other hand, basic services that include only essential management tasks like rent collection and tenant screening might be available at lower rates, such as the 10% commission charged by Kauai Dreams Realty. Additional fees may apply for services like cleaning, repairs, or design and renovation oversight, which can add to the overall cost of managing a short-term rental property in Kapaa. Understanding these fee structures is crucial for property owners to manage their expenses and optimize their rental income.