By Lailan Bento
Hawaii has long captured the imagination of real estate investors, and for good reason. The islands offer natural beauty, a world-class tourism economy, and genuinely limited land, all of which support strong long-term value. But investing here in 2026 requires more nuance than it once did, especially with evolving short-term rental regulations. As a Kona-based agent, here's what I walk my investor clients through before they buy.
Key Takeaways
- The Big Island offers relative affordability compared to Maui and Oahu, appealing to ROI-focused buyers
- Short-term rental regulations are evolving and must be verified before any purchase
- Hawaii is not one market; each island and neighborhood behaves very differently
- Understanding taxes, insurance, and local rules is essential to a successful investment
Why the Big Island Appeals to Investors
Among the Hawaiian islands, the Big Island stands out for its relative value. While Maui and Oahu command premium prices, the Big Island offers more land, privacy, and accessible entry points, making it especially attractive to investors focused on return.
What Draws Investors to the Big Island
Key advantages of the Kona area and beyond:
- Relative affordability — median prices in West Hawaii are meaningfully lower than Maui's, creating a better environment for ROI-focused buyers
- Strong tourism demand — Kona and the Kohala Coast attract steady visitor traffic, supporting vacation rental potential in properly zoned areas
- Lifestyle appeal — buyers are increasingly prioritizing climate, space, and quality of life, which benefits the Big Island
- Resilient demand — Kona remains one of the most resilient segments of the market, driven by second-home buyers and retirees
Understand the Short-Term Rental Rules First
This is the single most important thing to understand before investing with vacation rentals in mind: Hawaii's short-term rental regulations are strict and evolving, and they vary significantly by location. Never assume you can buy a property and rent it short-term without verifying the rules first.
What to Know About Vacation Rental Regulations
Key regulatory considerations:
- County registration is now required — Hawaii County's Ordinance 25-50 requires all transient vacation rental operators to register with the county and renew annually, with enforcement phasing in
- Zoning matters enormously — short-term rentals on the Kona Coast are generally limited to certain zones, so confirming a property's zoning is essential
- Legally compliant properties are key — savvy investors are focusing on legally compliant properties rather than speculative plays
- Existing permitted properties carry value — because new permits are harder to obtain, legally operating rentals are increasingly valuable
Consider Long-Term Rentals Too
Given the evolving short-term rental landscape, many Big Island investors find strong opportunity in long-term rentals. These offer steadier, more predictable income with fewer regulatory hurdles and less hands-on management than vacation rentals. The Big Island has consistent demand from residents, and long-term rentals sidestep much of the short-term rental complexity. Just keep in mind that Hawaii has some of the most tenant-protective laws in the country, so understanding landlord-tenant rules is important, particularly if you're managing from the mainland.
Factor in All the Costs
Successful investing comes down to running the real numbers. Before you buy, account for all the costs of ownership, some of which are specific to Hawaii.
Costs and Considerations to Account For
What to budget for:
- Property management — especially important if you're investing from out of state, as local, hands-on management is often essential
- Insurance — rising insurance costs, particularly for condos, are reshaping investor math and must be factored in
- HARPTA withholding — out-of-state sellers face a state withholding on the sale price, which is worth understanding for your eventual exit
- Condo considerations — if buying a condo, scrutinize the association's insurance, reserves, and any deferred maintenance carefully
FAQs
Is the Big Island a good place to invest in real estate in 2026?
The Big Island offers appealing fundamentals, including relative affordability compared to other islands, strong tourism demand, and resilient buyer interest in the Kona area. Success depends on choosing a legally compliant property, understanding the evolving short-term rental rules, and running honest numbers. With the right approach and local guidance, it can be a rewarding market.
Can I buy a property in Kona and use it as a vacation rental?
Only if the property is properly zoned and you comply with Hawaii County's registration requirements under Ordinance 25-50. Short-term rentals on the Kona Coast are limited to certain zones, and the rules continue to evolve. Always verify the specific zoning and permit status for an exact property before purchasing. I help my clients confirm these critical details.
Why is it said that Hawaii is not one market?
Because each island, and each neighborhood within it, behaves very differently. Oahu, Maui, Kauai, and the Big Island have distinct dynamics, and even within the Big Island, Kona differs greatly from Hilo, Waimea, or Puna. A property's location fundamentally shapes its demand, appreciation, and rental potential, which is why hyper-local knowledge is so essential.
Ready to Invest in Big Island Real Estate?
Investing successfully in Hawaii comes down to local knowledge, understanding the evolving regulations, and running the right numbers, which is exactly where I bring value. I know the Kona market and the Big Island intimately, and I'd love to help you identify opportunities that align with your investment goals.
Reach out to me,
Lailan Bento, and let's talk about your investment strategy in Hawaii.
