New state rules for vacation rental listings

[leilanidude]

gypsy - RUN from that. It smells like pure scam.

[shockwave rider]

http://www.cohplanningdept.com/wp-conten...040913.pdf

If you look at this chart of allowed uses in various zoning area it is clear the Bed and Breakfasts, boarding houses and lodging facilities are not allowed uses on AG land (most of Puna) without a special use permit. Most of the residential zoning is for single family dwellings, a vacation rental used by 50 different families in a year is not a single family dwelling. Looking at page after page of Puna listings on Air BnB, all touting their rural settings, it is highly unlikely they have all successfully jumped through the hoops needed to get that special permit.

I'm darn sure the Alaska residing couple renting out the 4 cute little houses on 20 acres I looked at when it was on the market less than 6 months ago couldn't get permitted in just a few months, and I know for a fact from confirming with the realtor at the time that it wasn't permitted as a vacation rental then, the houses were permitted as ag housing. When finishing my current house ran months late we stayed in multiple vacation rentals in Puna, and I know from talking to the owners that they all (100%) were flying under the radar and considered people who did pay the taxes to be fools, and that was at least a decade before Air BnB made it so easy to rent out your ohana or spare house on the internet.

[Lee M-S]

Gypsy,
they might ask for cash so they don't have to report it, or so you won't have a record of the transaction, or because they don't actually own the place they're renting. I've heard that's a common scam on craigslist. Could you arrange to meet with them to get a tour of the house, so you know they at least have keys? Maybe get the TMK and check ownership?

Your friends should rent MY place in Puako--only $9,000 cash, and I'll waive the cleaning fee!

disclaimer: this is not a real offer--I don't have a place in Puako.

><(((*< ... ><(("< ... ><('< ... >o>

[PaulW]

Shockwave, thanks for that, it's very interesting. This website agrees:
http://data.staradvertiser.com/rentals/rules/

I asked my vacation rental-owning neighbor about this, he said it was news to him. The government knows where he lives (in Puna) and they happily accept his taxes. He said he'll look into the special use permit.

[PaulW]

Gypsy, they should go somewhere that accepts credit cards, otherwise they have no protection.
It might be legit but it's a big risk.

[HereOnThePrimalEdge]

Would vacation rentals on the kona side typically ask for cash up front, and why?

It may be that they are trying to avoid credit card processing fees. The rental owner (let's hope they're the real owner) would have to key in the credit card numbers for an advance payment, as they can't swipe the card before their guests physically arrive, card in hand. When you key in credit card numbers you're charged the highest rate by your merchant services processor, and with a travel and rewards card that could be as high as 3.5%-3.65% per transaction (Costco/Elevon). With Bank of Guido Hawaii credit card processing that can go up to 5%-6%. So on a $10,000 charge the rental property owner will pay $350-$600 in credit card processing fees.

On the other hand, if anything in their rental property is damaged or goes missing, with a credit card on file the property owner can simply charge the guest for additional costs. With a cash payment they would have to write a letter, and probably take them to small claims court. It's a big risk because an additional cleaning fee alone (if required) can be $500.

It's a big risk for the renter to pay cash, as if anything is not as advertised, they have very little recourse. If they use a credit card and something is wrong they can file a dispute, which encourages the property owner to correct the problem so the funds will be released. If it's a fake rental, I believe the credit card company can investigate the dispute, and reverse the charges. Not possible with cash.

“There are worse crimes than burning books. One of them is not reading them.”
-Joseph Brodsky

[Guest]

Thank you guys for the concern and awesome advice. I can assure you, It's not a fake rental it's ligit. This part of my family has rented this same vacation house in Puako several times before. They like the location of the house and the atmosphere makes them feel at home, even if it is only for two weeks a year.

[pahoated]

The interesting aspect to all this is the county still mostly operates from just property tax paid by law abiding kamaaina citizens, and even ends up with a small surplus at the end of the fiscal year. If they get the authorization to audit transient vacation rentals, it only means more money for the county treasury coffers. This is when most states are scrambling to get fees on top of fees with tax upon tax, just to minimize the deficit they are running.

For those that can only see the cup as half empty, they will never know how much treasure this island holds, priceless.

"Aloha also means goodbye. Aloha!"