Considering a vacation-rental condo in Wailea? The upside can be compelling, but the details matter more here than almost anywhere else in Hawaii. Rules live at the state, county, and association levels, and your revenue depends on both market demand and clean operations. In this guide, you will learn how to confirm permitting and taxes, verify income, assess risks, and negotiate with confidence in Wailea and the broader Wailea-Makena area.
Let’s dive in.
Why Wailea attracts STR buyers
Wailea is a planned resort community in South Maui known for beaches, golf, luxury resorts, and condo developments with on-site amenities. Visitor demand is strong and seasonal, which supports vacation-rental performance when the property is legally eligible and well managed. To benchmark occupancy and average daily rate, use the Hawaii Tourism Authority’s visitor research for Maui and resort-area trends. You can start with the HTA’s comprehensive data sets in its research library.
Know the rules before you write an offer
Short-term rentals require three layers of green lights. You need proper state tax registration, Maui County compliance, and condo association approval. If any layer is missing, you risk fines, forced shutdowns, or revenue loss.
State tax registration
Hawaii imposes Transient Accommodations Tax and General Excise Tax on vacation-rental income. Verify that the current owner registered and posted a TAT number wherever the unit was advertised, and that returns were filed and paid. Review state requirements on the Hawaii Department of Taxation pages for Transient Accommodations Tax and General Excise Tax.
Maui County regulation
Maui County manages land use, zoning, and short-term rental enforcement. Rules have evolved in recent years, including local registration and project-level limits in some areas. Confirm current policy and any active moratoria with the Maui County Planning Department. Ask your escrow officer to check for any open county violations tied to the unit.
Association rules
Condo CC&Rs, bylaws, and house rules can allow, limit, or prohibit short-term rentals even if county rules permit them. Read the documents and recent meeting minutes for minimum stay requirements, guest policies, parking, noise, and any pending changes. If the association is moving toward restrictions, factor that into your underwriting and plans.
Prove the numbers
Revenue and occupancy
Request at least 12 to 24 months of rental ledgers, booking calendars, and bank deposit history. Cross-check gross revenue, net revenue after fees, occupancy rates, and average daily rate. Verify that reported revenue aligns with TAT/GET filings. For forward-looking assumptions, benchmark with HTA research and comparable units in the same development.
Expenses and recurring costs
Budget for HOA dues, special assessments, management fees, cleaning, supplies, utilities, cable and internet, and reserves. Full-service vacation-rental management often runs around 20 to 40 percent of gross revenue, depending on services and marketing channels. In resort environments, additional amenity or resort fees may apply. Ask for a one-year lookback on all owner-paid expenses and any scheduled increases.
Taxes and filings
Confirm that TAT and GET registrations are active and that returns have been filed and paid on time. Ask for copies of the last two to three years of filed TAT/GET returns. Coordinate with a tax professional familiar with Hawaii STRs for federal and state income tax treatment.
Financing a Wailea STR condo
Loan eligibility depends on both the borrower and the condo project. Lenders may have limits on projects with high concentrations of short-term rentals or active litigation. If financing is key to your plan, get clarity early on project approval and expected down payment. Underwrite your cash flow with conservative assumptions for occupancy and rate during shoulder seasons.
Build three pro forma scenarios. Use a base case with realistic occupancy and fees, a downside case with rate compression and higher insurance, and an upside case based on proven comps in the same complex. Make sure the debt service coverage holds up in the base and downside scenarios.
Physical, environmental, and title checks
Inspections and condition
Order a standard home inspection that includes mechanical, plumbing, and electrical systems. In resort condos, shared systems and equipment ages can affect your operating costs, so ask for maintenance logs. If the unit is sold furnished, request a detailed inventory and check ages and replacement costs for mattresses, sofas, and appliances.
Title, association health, and capital projects
Have the title company run a full search for liens, violations, and easements. Review the condominium map and legal description for accuracy. Study the latest HOA budget and reserve study to see what is funded versus deferred. Pay attention to big-ticket items such as roofs, elevators, pool replastering, and exterior paint schedules.
Environmental risks in coastal Wailea-Makena
Check the FEMA Flood Insurance Rate Maps to verify the property’s flood zone using the FEMA Map Service Center. Understand tsunami evacuation zone information and local readiness using NOAA’s tsunami resources. Consider long-term sea-level rise and coastal erosion in your hold horizon and capital plan.
Hawaii continues to address wildfire resilience and insurance market changes after recent events on Maui. Ask your insurance broker about current coverage availability, deductibles, and exclusions for wind, wildfire, and mold. If wastewater systems are a question for the development, review the Hawaii Department of Health guidance on the cesspool conversion program at the DOH wastewater site.
Insurance for STR operations
Obtain quotes for hazard, hurricane, and liability coverage with short-term rental endorsements. Confirm whether business interruption or loss of rental income coverage is available and at what cost. For a market-level view and consumer resources, consult the Hawaii Insurance Division at the state’s insurance commissioner.
On-site safety and compliance
Confirm fire code compliance for smoke and carbon monoxide detectors, fire extinguishers, and evacuation signage. If the building has fire inspections or safety certifications, get copies. If any shared food or beverage service exists, check for applicable health department permits. Ensure guest access instructions, house rules, and emergency contacts are clear and current.
Due diligence checklist for Wailea vacation-rental condos
Use this list as your working file in escrow.
Legal and tax
- Active TAT and GET registrations with copies of your seller’s last two to three years of filed returns. Review TAT details and GET guidance.
- Written confirmation of Maui County compliance and any required STR registration. Start with the Maui County Planning Department.
- Verify property tax status, rates, and exemptions with the County’s Real Property Tax office.
Association records
- CC&Rs, bylaws, house rules, and the last 12 months of board and membership meeting minutes.
- Current budget, most recent reserve study, and any notices about pending special assessments or capital projects.
- Certificate of insurance and any open or recent claims.
Financials and operations
- 12 to 24 months of rental income statements, bank deposit proofs, and booking calendars that reconcile to TAT/GET filings.
- Copies of property management agreements and a breakdown of all fees, including cleaning, supplies, and OTA commissions.
- Inventory list of furnishings and equipment, with ages and warranties where available.
Physical, environmental, title, and insurance
- General inspection report and any building system reports relevant to the unit.
- Preliminary title report with liens and litigation checks.
- Flood zone confirmation via FEMA and tsunami information through NOAA.
- Insurance quotes for hazard, wind, liability, and rental income protection, plus guidance from the Hawaii Insurance Division.
- Wastewater system status and any obligations, with reference to the DOH cesspool conversion program.
Red flags to pause on
- Association minutes hint at imminent special assessments or major deferred maintenance.
- Seller cannot produce TAT/GET filings, has inconsistent ledgers, or shows gaps between reported revenue and deposits.
- CC&Rs prohibit or restrict short-term rentals despite active rentals in the building.
- Unit sits in a high-risk flood zone where insurance is limited or expensive.
- Insurance carriers will not endorse STR use or quote premiums that erode cash flow.
- Evidence of pending county enforcement, unresolved noise or occupancy complaints, or building litigation.
Smart negotiation moves
- Require the seller to bring all TAT/GET accounts current and provide written representations of compliance.
- Use escrow holdbacks to cover potential special assessments or unresolved HOA issues.
- Negotiate a 30 to 90 day transition with the on-site or third-party manager to transfer bookings, vendor relationships, and channel listings smoothly.
The bottom line
A successful Wailea or Wailea-Makena vacation-rental purchase is the product of meticulous due diligence. Confirm the three permission layers, reconcile every dollar of income and expense, and pressure test your financing and insurance. With the right team and a disciplined process, you can protect your downside and position the condo for strong guest demand.
If you want a private, step-by-step strategy tailored to a specific building or unit, reach out to Luxum Group for buyer representation. Request Your Instant Property Valuation or Schedule a Private Consultation.
FAQs
Are short-term rentals allowed in Wailea condos?
- You must confirm three things for each unit: active Hawaii TAT/GET registration, Maui County compliance checked with the Planning Department, and condo CC&Rs and house rules that permit STRs.
What taxes apply to a Maui vacation-rental condo?
- Hawaii’s Transient Accommodations Tax and General Excise Tax apply to rental income. Review state requirements for TAT and GET and verify past filings.
How do I estimate income for a Wailea STR purchase?
- Ask for 12 to 24 months of rental statements and booking calendars, reconcile them to tax filings, and benchmark occupancy and rates using HTA research.
Do I need special insurance for short-term rentals in Hawaii?
- Many carriers require STR endorsements or higher liability limits, and you may want rental income loss coverage. For consumer guidance and market context, consult the state’s insurance division.
