Short-Term Rentals and Bill 108—What Kona Property Owners Need to Know!

Short-Term Rentals and Bill 108—What Kona Property Owners Need to Know!
Have you heard about Bill 108? Are you panicking because you don't know how it affects your short-term rental business? While the bill does enforce new regulations for vacation rentals on the Big Island, it's not the death of your rental property business. Rental property regulations change frequently! They're designed to protect landlords and tenants—even though keeping up with changes in the laws and adjusting how you manage your properties can feel like a burden sometimes.  With Bill 108, our local government is protecting the ability of all Hawaiians to enjoy our beautiful island. Our gorgeous landscape and beaches are why many people come to Kona to vacation—and to retire! Let's look at the bill to learn how it affects you and your short-term rentals. Please note: While this article is intended to give you an overview of the changes that will affect short-term vacation rentals in Hawaii County, it is not intended as a substitute for legal counsel. Compliance & Regulations

What Is Bill 108?

The Hawaii County Council adopted Bill 108 in November of 2018. The bill is now active, which means it's time to pay attention and make sure your short-term rentals comply. Question Mark Chalk Board In general, the bill primarily affects property owners who don't live in the property as a primary residence. Instead, these property owners use their Kona property for short-term vacation rentals. The main points of the bill include:
  1. Definitions of the areas where short-term vacation rental use is allowed.
  2. Established provisions and standards to regulate short-term rentals in these allowed areas.
  3. A way for existing short-term rentals to apply for a Nonconforming Use Certificate. This would "grandfather" in a short-term rental to continue operating outside of a permitted zoning district. 
If you're worried about the first two issues above, the third item provides a way for you to keep offering your property as a vacation rental to island visitors. However, you'll need to follow the mandated process to stay in business and comply with the new regulations.

What to Do with Your Current Vacation Rental

Don't panic! We work with many property owners who don't live in their rentals—or on the Big Island at all. Monitoring changes in regulations is what we do as expert property managers! Blog pic PalmTrees If you have a short-term rental property:
  • Download the Hawaii County packet of information to determine if your short-term rental is in an approved zone.
  • If your property isn't in an approved zone, all is not yet lost! Parcels of land developed prior to June 4, 1976 in compliance with all applicable government laws, ordinances, and regulations before April 1, 2019, can still qualify as a short-term rental.
  • Apply for a Nonconforming Use Certificate (NCU). The permit expires every year. Each application for renewal comes with an annual fee of $250.
If your property meets the requirements, be sure you follow the application process and keep up with your annual renewal to legally operate your short-term rentals. However, if you find that your vacation rental property can't qualify for continued use as a short-term rental, don't give up! You have options. 

What If Your Short-Term Rental Doesn't Qualify?

Your investment property helps generate long-term income to fund your retirement lifestyle! If you've planned to grow your portfolio with short-term investment properties, the new requirements of Bill 108 can threaten your plans. We have good news! You don't have to give up your rental property if it doesn't qualify as a legal vacation rental under the new regulations. Consider changing your short-term rental into a long-term rental property. There are plenty of advantages when offering your property to long-term Kona residents!
  • Fewer tenants are coming and going: Signing a 12-month lease means you trust your property to one screened and qualified tenant for the duration of their stay! You reduce the opportunity for a vacationer to cause damage during a whirlwind stay in your home.
  • Guaranteed income: How do twelve months of steady rental income sound? Vacation rentals are at the mercy of visitors to book your property. You lose money during the weeks (or months) your rental sits empty. 
  • Your property isn't affected by Bill 108: The new regulations help protect non-resort areas from an increasing number of unregulated vacation rentals. If your investment property is in the zones that no longer allow vacation rentals, you can keep operating by switching your property to a long-term rental.
The best part? You don't need to change what you do to keep operating! Short-Term Vacation Rental

Let a Property Manager Help You Meet Bill 108 Head On!

When you work with a Kona property manager, we can help you navigate the changes that come with Bill 108 and any other property management laws. Shifting your short-term rental to a long-term rental is something we can handle for you. We can also help you get the permits you need to continue operating your short-term rental—if it qualifies under the new regulations. Are you considering buying a new short-term rental? Let us help you find one in the allowed zones that complies with the new bill. Hawaiian Dream Properties is your expert property management team on the Big Island! Let us know how we can keep you in business and grow your investment property portfolio! {{cta('e04eb077-e6e5-46e2-9d68-98dbe419e1d4','justifycenter')}}
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