Vacation condos on Maui – what’s the difference from regular condos?

What’s so different about a vacation condo on Maui?

There’s a big difference.  Basically there are two types of condos here, and I’m not referring to the building styles.  There are VACATION CONDOS and there are REGULAR CONDOS, but by far Maui has more vacation condos.  During the 1970’s and ’80’s there was a surge of development along the shorelines, with many vacation condos being purposely built to meet the needs of travelers coming to Maui.  Over time, more vacation condos were built, but not all were in the appropriately zoned areas.  Some condo buildings are in a gray area about whether or not they are truly vacation condos.  It can be confusing, even for us who live here!

All about the zoning.  The County of Maui determines the zoning of the land, which will affect the usage of the building.  If a building is zoned for Hotel/Resort use, then it may legally be rented out for short term, which is defined as less than 180 days at one time.  Other options will allow for short term rental (STR) usage with the proper permitting.  The building itself might have its own rules regarding rentals – yes or no –  but the underlying zoning is all important.  Some condos might actually look and feel just like a resort, but if the County says NO, then that’s the bottom line.

It’s going to cost more.  When purchasing a vacation condo, there are some things to consider when it comes to financing.  Many are classified as “Condo-tel” in the lending industry, which puts more rigorous requirements on the loan product.  It’s advisable to use a local lender who knows the ins and outs of dealing with this type of real estate.  You’re probably going to need a larger down payment than you expect, even as much as 40%.  There will be monthly maintenance fees that vary widely, and lush manicured grounds and swimming pools add to this expense.  The property taxes will be higher than other classes of real estate.  All of this adds up to a higher monthly cost than a regular condo of comparable size.

Regular condo:

• cannot be rented out for less than 180 days
• usually sold unfurnished
• may come with long term tenants
• generally has lower monthly maintenance fees
• pets are often allowed
• not many are oceanfront

In front of the Island Surf condo building in Kihei Maui HI

Some regular Maui condos:

• Wailea Palms – Wailea
• Villas at Kenolio – Kihei
• Maalaea Mermaid – Maalaea
• Gardens Upcountry – Pukalani
• Napili Villas – Napili
• Masters – Kaanapali
• Kapalua Ironwoods – Kapalua