Mahalo, Well that is all good advice. I will take all that into consideration. Does anyone have experience vacation renting their property and if so did they make enough to justify the rental as a rental. It seems after I build and I won't be able to move for a few more years I can rent the home and at least cover most if not all the mortgage. thoughts? Brett
Depending on your location and your pricing along with having a good management company it may be financially feasible for you. It is VERY expensive to rent out vacation rentals out here. For vacation rentals, not including your regular cost of wear and tear on your place, you will be paying a management company up to 50% to take care of the place and manage it for you. Then there is the 4% GET tax (Hawaii) and then there is the 9.25% TAT tax you will pay for the privilege of doing business in Hawaii. If you can gross $100k a year I would do it. But again, vacation rentals are a crap shoot in my opinion.
I rent my home in Ocean View on a permanent basis. I prefer to have a steady stream of lower income amount that is taxed lower than to risk getting larger sums here and there and having to pay an exorbitant amount of taxes. I pay my manager 10% a month and the GET Tax of 4% (Hawaii). The difference in taxes and fees is due to vacation rental compared to full time rental. Also, the renters I have in there take better care of the place since that is where they are living compared to vacation renters who really don't give a shit about your place.
What you might want to do is check out VRBO.com (Vacation Rentals By Owner) and see what a comparable place is renting for. But also check out how many places are competing against you as well. There might be a lot or there could be a few. The larger the place and the higher the price the less often it will be rented out and just sitting there. The hard part is trying to figure out if your house will be rented out 10%, 20%, 30% or 75% of the time.
The choice is yours as to what you want to do. I don't like to leave my house vacant for any long period of time. So long term renters is preferable to me. But vacation rentals can make you a lot of money. You have to weigh your choices. Let me know what you decide to do.