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        <title>Oahu MLS Blog</title>
        <link>http://www.oahumls.net/blog/</link>
        <description>Blog about all things related to Hawaii Real Estate and the Hawaii lifestyle</description>
        <item>
            <guid>http://www.oahumls.net/blog/saint-louis-heights-in-honolulu.html</guid>
            <link>http://www.oahumls.net/blog/saint-louis-heights-in-honolulu.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>Saint Louis Heights in Honolulu</title>
            <description> <![CDATA[ 
We recently listed this house for sale on Saint Louis Drive.  Within an hour the phone calls were coming in requesting showings.  That first day I spent nearly six hours at the property!  The phone was ringing all week and we had a stream of buyers checking the house out.





This home is all about island style.  Built in the 1950's, upstairs is a three bedroom one bath living area with a large lanai overlooking Honolulu.  The 7,000+ square foot lot provides enough room for a spacious yard along with the house.





Take a look at this cozy kitchen and the airy feel.  This home is about 600 feet above sea level, providing cool breezes along with the nice views.


Here's the master bedroom.  It has the only air conditioner in the home, which is reserved for only the hottest evenings.





Downstairs there's a separate residence with two bedrooms and one bath.  Convenient for multi-family living.


Total interior size of the home is 1,518 square feet.  We listed for $698,000 and had three offers above asking price by the end of the week.


Are you looking for a home in Saint Louis Heights?  We might have another listing coming up...


Michael Bates (RA)


i Properties Hawaii


1585 Kapiolani Blvd #1533


Honolulu, HI 96814
 ]]> </description>
            <pubDate>Sun, 28 Apr 2013 21:28:39 -0500</pubDate>
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        <item>
            <guid>http://www.oahumls.net/blog/great-pictures-sold-this-kapahulu-home.html</guid>
            <link>http://www.oahumls.net/blog/great-pictures-sold-this-kapahulu-home.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>Great Pictures Sold This Kapahulu Home</title>
            <description> <![CDATA[ 
This article could also be titled "The Importance of Pictures in Selling Your Home".


Professional photographers are artists.  They have such a good eye, along with knowledge about lighting conditions and color that it's just the best way to sell some homes.  I say "some" homes because there are cases where high quality photos don't help - for example a cluttered house won't look that much better with photos of beer bottles on the floor and dirty laundry laying around.














The professional photo has nice color and shows off the landscaping.


The amateurish photo tries to get the "for sale" sign in the picture and has poor lighting.






We sold this house in Kapahulu in February, 2013.  Long story short, another realtor listed the house with poor quality pictures. They got an offer and went into escrow, however there were issues and the deal was cancelled.  The seller decided to list with me and wanted a higher price.  We brought in our favorite professional photographer and not only got the higher price the seller wanted, we also closed the sale.  Whew! 


I won't use the prior realtor's pictures, don't want to start any wars here.  Instead, let's compare the professional photographer's pictures with some of my own, taken sloppily to show what a difference there can be.














The wide angle lens opens up our view of the kitchen.


Poor lighting and failure to arrange the stools at the breakfast bar result in an inferior picture.


















Proper angle and lighting let us see the walls, ceiling and floor in this room.


 Improper use of the flash and unclosed doors make for a sloppy shot.






When it's time to sell your home, it helps to get it as clean and de-cluttered as possible.  Then have a professional photographer take the photos for your listing.  Concerned about the cost?  List with me and I will pay for the photos!  And be wary of realtors who say they have a good camera.  Take a look at some of their past listings and see if their photos are really as good as they should be.


Michael Bates (RA)


i Properties Hawaii


1585 Kapiolani Blvd. #1533


Honolulu, HI 96814
 ]]> </description>
            <pubDate>Mon, 11 Mar 2013 05:31:09 -0500</pubDate>
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            <guid>http://www.oahumls.net/blog/date-laau-the-lease-is-up.html</guid>
            <link>http://www.oahumls.net/blog/date-laau-the-lease-is-up.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>Date-Laau - the Lease is Up!</title>
            <description> <![CDATA[ 



Back in 1958 the Date Laau community was created and the neighborhood eventually became home to hundreds of people. The lease expires today - December 4, 2012.  


The lessor, Iolani Schools, is not offering a fee purchase option.  Owner occupants at Date-Laau will be allowed to continue living there for an undetermined period at market rents.  Other owners who are non-residents (I am one of them) lose their interest in their properties at the end of today.


Is this fair?  Well, we all knew when we bought that these were leasehold units.  I guess technically it is fair.  On the other hand, many other properties on Oahu have been converted to fee simple.  All of us (owners/residents) hoped for a fee purchase option or an extension of the lease.


You can see in the picture above that the block has somewhat emptied out.  I would guess that about half of the apartments are now vacant.  Iolani Schools coned off areas on the street for owners/residents to put their bulky items for the trash truck to pickup.


My wife and I lived at the Iolani Banyan for a year and I have fond memories of that time.  The unit I bought was a two bedroom with good interior size and a parking space.  We rented a second space on the street and enjoyed the proximity to the beach, work etc.


We're not sure exactly what Iolani School plans to do with the block of apartment buildings.  It is anticipated that the school campus will expand onto the block over the years.


If you are contemplating buying leasehold, keep in mind that if you don't buy the fee or if the fee is not available, someday you may lose the property!


Aloha, Mike


Michael Bates (RA)


i Properties Hawaii


1585 Ala Moana Blvd. #1533


Honolulu, HI 96814
 ]]> </description>
            <pubDate>Tue, 04 Dec 2012 21:10:29 -0600</pubDate>
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            <guid>http://www.oahumls.net/blog/hawaiis-economy-is-improving-in-2012.html</guid>
            <link>http://www.oahumls.net/blog/hawaiis-economy-is-improving-in-2012.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>Hawaii's Economy is improving in 2012</title>
            <description> <![CDATA[ 
If you live in Hawaii or have visited recently, there should be no doubt that our economy is rebounding.  Tourism during the summer set a new record and it looks like the trend will continue through the end of the year.


Visitor arrivals in September 2012 were 595,000, six percent above the same period last year.  Tourism dollars spent in September reached $1.1 billion, which was 13% higher than a year earlier.


The majority of Hawaii's visitors are from the U.S. west coast.  East coast visitor counts are lower, however those visitors tend to spend more money while vacationing in Hawaii.


Internationally, Japan leads for Hawaii tourism.  Other asian countries along with Latin America and European countries have an increasing presence of visitors.


The Effect on Oahu's Real Estate - Investment Properties


The improving economy means good news to owners of hotel-condos.  Room rates, occupancy and the resulting income for hotel-condo units were down in the dumps for years after the housing bust.  To make things worse, after the bust, banks decided to quit writing loans on hotel-condos and buyers had to pay in cash.  Some banks are just starting to write mortgages on these properties again, however cash is still king when it comes to buying one


Ala Moana Hotel is a great example.  When the hotel was sold off as condo units in 2005 and 2006 they went like hotcakes! After the housing bust many of the units were sold as short sales or foreclosures.  Suddenly in the past few months this is a hot property again, as buyers realized the return on investment is not bad compared to earning practically nothing leaving their money in the bank!


The Ilikai is another property that plunged in value and is now rebounding nicely.  Ilikai units are roomier than the average hotel condo, with 500 square feet interior space and a lanai.  Ocean view units are the most popular, city view units are more affordable.


Aloha Surf Hotel pricing seems to be pretty flat so far this year, that is prices haven't really jumped up (yet).  For buyers lamenting that they missed the bottom, here's an opportunity on a hotel-condo with units that generally have a good return on investment.


The Effect on Oahu's Residential Real Estate


Median single family home prices are up 9% from a year ago at $637,000 and they are not far off from the all time high in 2007 of $643,500.  Does that mean we are nearing the peak and ready for another housing bust?  According to Hawaii economists, the answer is "No".  Our economy is rebounding, employment and job opportunities are increasing and interest rates remain very low (less than 4 percent on a 30-year fixed rate mortgage).


Also consider that home prices on Oahu double about every eleven or twelve years, on average.  Just because we are approaching the old price peak doesn't mean prices will stop there.


Prices change more rapidly in some neighborhoods than others.  The leeward side of the island generally lags when prices rise.  


Makaha Valley Towers still have one bedroom units selling at about $100,000.  Yes, they are fee simple.  Some units have sold in excess of $300,000 when prices topped out years ago.  For those worried about Makaha prices staying "in the dumps", if they come back next year and buy one at a higher price will they feel better about it?  Prices are already rebounding, just not as quickly as Honolulu, Kailua and East Oahu.


Feel free to contact me to buy and sell real estate on Oahu and the neighbor islands.


Aloha, Mike


Michael Bates (RA)


i Properties Hawaii


1585 Ala Moana Blvd #1533


Honolulu, HI 96814


(808) 548-1220
 ]]> </description>
            <pubDate>Wed, 31 Oct 2012 14:19:45 -0500</pubDate>
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            <guid>http://www.oahumls.net/blog/hawaii-encroachments-and-encroachment-agreements.html</guid>
            <link>http://www.oahumls.net/blog/hawaii-encroachments-and-encroachment-agreements.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>Hawaii Encroachments and Encroachment Agreements</title>
            <description> <![CDATA[ 
In real estate terms, encroachments are intrusions onto a property.  Older neighborhoods in Hawaii often have encroachments because the methods of measuring for land surveys decades ago were not as accurate as current methods are. 


Encroachments commonly involve walls.  For example, a homeowner constructs a wall along the perimeter of his property, believing that the wall is inside the property lines.  Later, a survey is performed and it is found that the wall crosses the boundary and encroaches into the neighbor's property.


For residential properties in Hawaii, an encroachment of six inches or less is considered "de minimis".  For purposes of buying and selling real estate in Hawaii, de minimis encroachments do not require encroachment agreements by statute.


The de minimis law was enacted by Hawaii's legislature in 1997.  Prior to that, any measured encroachment would require an encroachment agreement to protect the owners of encroaching properties along with the the title companies. 


 While the de minimis law reduces the number of encroachment agreements filed, note that a neighbor still has the right to tear down an encroachment going onto his property if an encroachment agreement is not in place.  So if a wall encroaches onto a neighbor's property by one inch and there is no encroachment agreement, the neighbor can remove that one inch of wall.


How Encroachment Agreements Work


An encroachment agreement is a document that describes the encroachment and names the two parties.  The party of the first part is the property owner with the encroachment.  The party of the second part is the encroached neighbor.  The agreement states that the neighbor allows the encroachment until the first party removes it (by demolishing a wall, for example) or until the encroachment is otherwise destroyed.  If the first party decides to tear down the wall and rebuild it, the new wall should not encroach.  If a wall falls apart by age, earthquake or other means, then again the first party is not allowed to encroach if and when he builds a new wall. 


Encroachment agreements must be signed by both parties and notarized, then recorded at the bureau of conveyances to take effect.  The agreements will show up on title reports so buyers will have notice when purchasing properties subject to encroachment agreements.


The encroachment agreement document provides for termination of the agreement.  Since the agreement is recorded with the bureau of conveyances, termination will also involve creating a document, having both parties sign and sending it to the bureau.  The cost of preparing the termination paperwork will be paid for by the first party if the encroachment is removed by the first party or destroyed (not by the second party).  If the second party removes the encroachment, then the first party does not have to pay for preparing the termination agreement.


Does My Property Need an Encroachment Agreement?


Encroachments are rarely an issue while you're living in the same house with the same neighbors for many years.  If your house or a neighbor's is sold, a survey is usually performed and then encroachment agreements may be important.


Usually, friendly neighbors sign encroachment agreements without any compensation.  If you're planning to sell your house and the land hasn't been surveyed in many years, it would be a good idea to have a survey done in the early stages of the home selling process.  This will provide time to determine if there are encroachments and whether there's a need for an encroachment agreement.


If your property has an encroachment and your neighbor refuses to sign an encroachment agreement, the buyer can: 1) cancel the purchase or; 2) sign an indemnity agreement with the title company, basically acknowledging the encroachment and agreeing not to hold the title company at fault.


The cost of a survey averages less than $1,000 on average for Oahu homes.  It's worthwhile to get it done sooner to avoid delays later on, when your house is in contract.


Do All Properties Require a Survey?


No.  Condo and townhome purchases do not require surveys because the buyer is purchasing a part of a building and a share of the land.  


And newer subdivisions, such as Ewa by Gentry and Ocean Pointe usually have fences that were erected by the developers.  Homeowners receive plot plans, which are basically surveys done by the developers.  If the original walls are still in place and the plot plan is available, a survey can often be omitted, unless required by the buyer's mortgage company.


What If a There's an Agreement for a De Minimis Encroachment?


If you are the benefiting (encroaching) party, it is to your benefit to keep the encroachment agreement alive.  Remember, even if your encroachment is de minimis, your neighbor has the right to remove the encroachment UNLESS you have an encroachment agreement.


If you are the encroached party, you may want the encroachment agreement removed to "clean up" your title report. However, an akamai neighbor probably won't agree to it.  Why risk having their encroachment removed if, later on the two neighbors have an argument?


 


Aloha, Mike


Michael Bates (RA)


I Properties Hawaii


(808) 548-1220
 ]]> </description>
            <pubDate>Fri, 01 Jun 2012 08:39:09 -0500</pubDate>
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            <guid>http://www.oahumls.net/blog/oahu-real-property-tax-due-dates.html</guid>
            <link>http://www.oahumls.net/blog/oahu-real-property-tax-due-dates.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>Oahu Real Property Tax Due Dates</title>
            <description> <![CDATA[ 
Paying your real property taxes on time


A customer called me recently about a property tax bill they received from the City and County of Honolulu.  This couple had bought their house in Kahala in December, 2011.  In April, 2012 they received a delinquentcy notice with penalties and interest for their February property tax bill.  They wanted to know why they never received a tax bill in January or February?


I called the Property Tax office to inquire.  Here's their response:




Oahu real estate sales are recorded by the State of Hawaii.


Property taxes are assessed and collected by the City and County of Honolulu.


It can take 2-3 months from the time the sale records to the time the sale records to the time the City and County of Honolulu is notified of the transfer in ownership.


The owner is responsible for paying real property taxes on time, whether or not a bill is received.




The property tax office sends its February installment tax bills in mid-January.  The time from the recording of the sale to the tax billing was about a month and the City might not have been notified of the change in ownership.  There's a possibility the prior owners received the tax bill and ignored it.


Paying property taxes with your mortgage payment


Many owners automatically pay their real property taxes as an inclusion with their mortgage payment.  Mortgage companies can setup an "impound account" and collect property taxes each month, then remit them to the City and County.  Not all mortgage companies do this though, take a look at your mortgage statement to be sure.


Late Payment


Getting back to this couple with the delinquent tax bill, the bottom line is that they had to pay the penalties and interest with their taxes.  At least the City and County has their tax billing information and they should receive all their future tax bills on time.


An owner can elect to pay the entire year's tax bill at one time and then have a year to wait until the next bill.  The City and County of Honolulu's fiscal year begins on July 1st and ends on June 30th.  The first tax bill (of the fiscal year) is due on July 20th.  When you receive that bill, pay the whole thing off if you choose.


If you decide to sell your home, the escrow company will prorate your real property taxes and return the amount you (the owner) prepaid.  You won't lose out on any money by prepaying your property taxes, except the opportunity cost of using it for six months.  With today's interest rates, what's the difference?  Might as well pay the entire bill in July if you have the extra cash.


Michael Bates (RA)


i Properties Hawaii


1585 Kapiolani Blvd #1533


Honolulu, HI 96814
 ]]> </description>
            <pubDate>Sun, 22 Apr 2012 14:55:01 -0500</pubDate>
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            <guid>http://www.oahumls.net/blog/makaha-condos-get-em-while-theyre-hot.html</guid>
            <link>http://www.oahumls.net/blog/makaha-condos-get-em-while-theyre-hot.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>Makaha Condos - Get  'em while they're hot!</title>
            <description> <![CDATA[ 
Makaha Condos are Moving


2011 was a busy year - it was my busiest year ever!  A good reason for it was the sale on properties in Makaha. Condos, townhomes and even single family homes were half price compared to the peak years of 2005-2006.


People want to buy low and sell high for good reason.  The only problem is, when prices are low, people get worried that prices will go lower and then they don't pull the trigger.  I believe the bottom has already passed.  Prices are higher now than they were several months ago and I think they will continue climbing.


Looking at past trends, Hawaii's real estate cycles run about 8-12 years.  We maybe just one year into a new cycle.  Therefore, if you missed the bottom don't despair.  There maybe a lot more upside to come.


What's Selling?


Makaha Valley Towers





Most of my business in Makaha during 2011 was at the Makaha Valley Towers.  This building is popular because it's clean, well maintained, secure and most of the units have an ocean view.  Studios are popular because they have large lanais.  One bedroom units are popular because, well they have a bedroom.  A downside with the one bedrooms is that their lanais are smaller than those of the studios.  A one bedroom lanai is about two feet deep and runs the width of the condo.  Just enough room to step outside, not enough room for a table and chairs.


I represented several buyers on studios and one bedrooms at the Towers in 2011.  They paid between $80,000 - $100,000.  The buyer who paid $100,000 got an elegantly remodeled one bedroom foreclosure - even though he paid the most, I think he got the best deal.


At this point prices are getting closer to $100,000 and up at Makaha Valley Towers.


Makaha Beach Cabanas





You want affordable sandy beachfront?  This is the best deal on the island.  Makaha Beach Cabanas are situated on a lovely beach.  The Cabanas are right next to another building, the Hawaiian Princess.  The Hawaiian Princess is leasehold (not fee simple like the Cabanas) so you might want to pass on that one.


In 2011, I represented two buyers and two sellers for a total of four transactions at the Cabanas.  Prices ranged from $155,000 - $165,000 on these sales.  Three of the units were in "so-so" condition and one was in above average condition.  Buyers at the Cabanas are generally fixing these units up and using them as second homes or as long term rentals.


Makaha Valley Plantation





Makaha Valley Plantation townhomes are popular because they generally have two bedrooms, two baths, 815 square feet of interior space and a lanai.  They are also pet friendly.


I did not close any sales at the Plantation in 2011.  I did have several buyers, some of them canceled on short sales and two currently have offers on short sale listings.


Other Condos


A nice building in Maili (between Makaha and Kapolei) is Maili Cove.  It's on a sandy beach.


For the lowest prices on Makaha Beachfront, take a look at the Makaha Surfside.


Makaha Shores is located right at the famous Makaha Surfing beach.  These units tend to be a little smaller and pricey, however if you want to surf in the morning you can carry your board right outside when the waves are up and catch some barrels!


Aloha, Mike Bates


Michael Bates (RA)


i Properties Hawaii


(808) 548-1220
 ]]> </description>
            <pubDate>Mon, 09 Jan 2012 20:42:25 -0600</pubDate>
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            <guid>http://www.oahumls.net/blog/ala-wai-golf-course-the-worlds-busiest.html</guid>
            <link>http://www.oahumls.net/blog/ala-wai-golf-course-the-worlds-busiest.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>Ala Wai Golf Course - The World's Busiest!</title>
            <description> <![CDATA[ 



Did you know that this public golf course on the outskirts of Waikiki is the busiest in the world?  And being a municipal course the green fees are pretty reasonable.


Walking the course and playing 18 holes cost just $49.  If you apply for and obtain a golf card, the fee for 18 holes is $22 on weekends and holidays, $18 on weekdays.  


How does one get a golf card?  Well first you must be a Hawaii resident with evidence to prove it.  More info can be found here.


History of the Ala Wai Golf Course


This land area was a territorial fair grounds in the early 1900's.  In 1923, it started off as a single hole.  A year later, three more holes were built for a total of four and it was named Territorial Fairgrounds Golf Course.  At that point the Ala Wai Canal was still being dredged.


By 1931 five more holes were designed and it became a nine hole course.  It was renamed the Ala Wai Golf Course.


Nine more holes opened in 1937 and the Ala Wai became an 18 hole course.  In 1948 a clubhouse was built.


The State of Hawaii owns the Ala Wai Golf Course land and it's operated by the City and County of Honolulu.


Let's Golf at the Ala Wai


The Ala Wai Golf Course's address is 404 Kapahulu Avenue, Honolulu HI.  Phone: (808) 733-7387.


Hours of operation are 5:30 a.m. to 5:30 p.m. daily.  Ala Wai has a driving range too, open from 7 a.m. to midnight daily.


Aloha, Mike Bates


Michael Bates (RA)


i Properties Hawaii


1585 Ala Moana Blvd. #1533


Honolulu, HI 96814
 ]]> </description>
            <pubDate>Sat, 15 Oct 2011 17:27:45 -0500</pubDate>
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            <guid>http://www.oahumls.net/blog/castle-hills-home-for-sale.html</guid>
            <link>http://www.oahumls.net/blog/castle-hills-home-for-sale.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>Castle Hills home for sale</title>
            <description> <![CDATA[ 
We recently listed this immaculate home in Castle Hills, a Kaneohe neighborhood.  Built in 1988, it's been well maintained.  The current owner has taken great care in upgrading the home for this sale.


Features of the home:




Three bedrooms, three baths.


1,556 square feet interior on a 6,625 square foot parcel.


New paint inside and out.


New carpet.


Two car garage plus outside parking for up to three additional vehicles.


Fujitsu split air conditioning system.


Double pane windows in the master bedroom and bathroom.


Zoysia Z-3 grass, slow growing and drought resistant.


New refrigerator and dishwasher.  Stove is a few years old, looks new.


Master bathroom newly tiled.




This home just shows so nicely.  Take a look!





Want to see more?  The virtual tour is here.


Note - this house sold in March, 2012.


Michael Bates (RA)


i Properties Hawaii


1585 Kapiolani Blvd #1533


Honolulu, HI 96814
 ]]> </description>
            <pubDate>Tue, 20 Sep 2011 21:34:30 -0500</pubDate>
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            <guid>http://www.oahumls.net/blog/city-and-county-of-honolulu-pursues-illegal-vacation-rentals.html</guid>
            <link>http://www.oahumls.net/blog/city-and-county-of-honolulu-pursues-illegal-vacation-rentals.html</link>
            <author>mike@oahumls.net (Mike Bates)</author>
            <title>City and County of Honolulu pursues illegal vacation rentals</title>
            <description> <![CDATA[ 
It's a common misconception that it's okay to to buy a home or condo on Oahu and then rent it out short term.  In most cases, such rentals are illegal.  The thing is, the City and County of Honolulu has not been doing much to pursue and punish the offenders.


The City is proposing an ordinance to require owners of vacation rentals to post their permit numbers with all advertisements or face penalties of up to $1,000.  Continued advertisement after being warned may result in penalties of up to $2,000 per day. 


Residents of some communities have strongly opposed vacation rentals for years, arguing that the businesses increase noise and congestion in residential neighborhoods.


In 1989, the City put a moratorium on new vacation rental permits and grandfathered those who were in operation prior to October 22, 1986.  At that time there were more than 2,000 permitted vacation rentals.  In 2011, the number has dwindled to 875, of which about 200 are outside of Waikiki.


Definition of Transient Accommodations per the State of Hawaii Revised Statutes:



§18-237D-1-07 “Transient accommodations”, defined. (a) In general. “Transient accommodations”
means the furnishing of a room, apartment, suite, or the like which is customarily occupied for less than
one-hundred-eighty consecutive days for each letting by a hotel, apartment hotel, motel, condominium property
regime or apartment as defined in chapter 514A, HRS, cooperative apartments, or rooming house that provides
living quarters, sleeping, or housekeeping accommodations, or other place in which lodgings are regularly furnished
to transients for a consideration.
(b) Applicable presumptions. If the room, apartment, or the like is customarily occupied by transients
and the hotel or condominium regularly furnishes such accommodations to transients, the following apply:





It shall be presumed that accommodations are transient accommodations if the accommodations
are let for a period of less than one-hundred-eighty consecutive days; and 


No presumption applies if the accommodations are let for a period of one-hundred-eighty
consecutive days or longer. 


See section 18-237D-15-01 for further discussion of the one hundred-eighty day presumption set
forth in section 237D-15(b), HRS.
(c) “Customarily”, defined. “Customarily” means:
(1) By virtue of common usage, the hotel room, apartment, suite, and the like is occupied for less than
one-hundred-eighty consecutive days, such as the following:
(A) Hotel rooms which are customarily rented to guests who stay for short periods of time, such
as periods of consecutive days and nights which are generally less than a week; or(B) Condominium apartments which are customarily rented to guests who occupy theapartments for longer periods, such as thirty consecutive days or more.(C) There may be situations where a hotel room or a condominium apartment is customarily rented to transients, but also is periodically rented for more than one-hundred-eighty consecutive days. For example, a hotel room or condominium which is customarily rented totourists for periods averaging thirty days, but at times is rented to a construction company for temporary housing of its employees. This temporary housing may last for one year or more whenever the companies have jobs in the Neighbor Islands and housing is required to be provided. Whether the hotel, condominium, or apartment operator periodically rents the room, apartment, or suite for one-hundred-eighty consecutive days or more shall not change an accommodation from a transient to a non-transient accommodation. For the period in which the hotel or condominium is rented for one-hundred-eighty consecutive days or longer, however, the revenue from the rental is not subject to the transient accommodations tax.




Conclusion


Without the proper permit, a residence should be rented for no less than 30 days at a time to comply with the law.


If a dwelling is rented for less than 180 days, it may be considered a transient accomodation.  For that reason, it is advisable for owners to lease their properties out for at least 180 days (six months) at a time.


All rentals are subject to General Excise Tax (GET) at 4.5% of rent collected on Oahu.  If a rental is deemed a transient accomodation, a tax of 9.25% of rent collected also applies.  That's a total of 13.75% of rent collected owing to the State for transient rentals.  Net income is subject to Hawaii State and U.S. Federal taxes.


Owners blissfully unaware of the consequences of operating short term rentals stand to lose a lot.  Don't be one of them!


Michael Bates (RA)


iProperties Hawaii


(808) 548-1220
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