If you’re considering buying a short-term vacation rental (STVR) on the Big Island of Hawaii, there’s one crucial piece of information you need to know before making any decisions: not every property is eligible for vacation rental use. In fact, the island has specific zones where STVRs are permitted—and outside of those zones, you may be out of luck.
Hi, I’m Dan Palamino with KW Big Island and the Hawaii Team. I help buyers, sellers, and investors navigate real estate on the island every day, and one of the most common questions I hear is: “Can I do a vacation rental in this area?” Today, I’m breaking it all down for you.
The Big Picture: East vs. West Side
On the east side of the island (Hamakua Coast, Hilo, Pahoa, Puna), STVR demand is different, and while some opportunities exist, I primarily work on the west side. The west side is home to the island’s resorts, and that’s where the majority of vacation rental activity is concentrated.
The Kona Coast & Ali‘i Drive
One of the clearest dividing lines for short-term vacation rentals is along Ali‘i Drive in Kona:
- Ocean (Makai) side: Eligible for STVRs
- Mountain (Mauka) side: Not eligible
That means even if two properties sit directly across the street from one another, only the oceanfront side may qualify as a legal vacation rental. This pattern continues all along Ali‘i Drive as you move north up the coast.
Resorts Where STVRs Are Allowed
When I talk about helping people buy in the “six resorts” on the west side, here’s what I mean:
- Four Seasons Hualalai – Beautiful homes and condos where STVRs are allowed. Prices start around $4 million and can reach $30–40 million.
- Waikoloa Beach Resort – Home to the Marriott, Hilton Waikoloa Village, and a range of condominiums. Condos typically start at $800,000 and go up to $4 million. All eligible for STVRs.
- Mauna Lani Resort – Includes the Mauna Lani Beach Club and surrounding subdivisions like KaMilo and Kulala’i. All in the zone for STVRs.
- Mauna Kea Resort – Interestingly, even properties on the mauka (mountain) side of the highway here are eligible for STVRs.
Resorts Where STVRs Are Not Allowed
It’s important to note that some resorts do not allow vacation rentals—even though they fall within the county’s designated STVR zone. That’s because their HOAs and CC&Rs prohibit it. Two examples are:
- Kohanaiki
- Kukio
Both are incredible private communities, but they don’t permit short-term rentals.
Making Smart STVR Investments
As you can see, not every property on the Big Island qualifies for vacation rental use, and the rules can be confusing if you’re new to the area. That’s why it’s so important to work with someone who knows the market and the zoning laws inside and out.
At KW Big Island and the Hawaii Team, we specialize in helping clients buy, sell, and invest in these zones—and we also provide property management services for vacation rentals.
Get in Touch
If you found this guide helpful, please share it with a friend who’s interested in investing on the island. Have questions about a specific property? Call me directly at 808-987-3306. I’d be happy to walk you through your options.
Aloha,
Dan Palamino
