Honolulu Short-Term Rentals Net 3.8% After All Costs

The gross short-term rental premium is 178% for a 3-bed house in Honolulu (Honolulu County), but that headline shrinks materially once Airbnb fees, the state's Transient Accommodations Tax (TAT) of 10.3%, higher insurance, utilities, and cleaning are subtracted. This article covers both a 3-bed house and a 2-bed apartment because their cost structures diverge in ways that matter for net returns. Apartments offer a lower entry price but carry HOA fees that houses don't pay, and Honolulu's premium price points mean both property types land in the thin-yield, appreciation-led category characteristic of Hawaii.

Warning: short-term rental figures apply only where legally permitted. Honolulu largely bans vacation rentals outside designated resort zones (Waikiki, Ko Olina, Turtle Bay, and a handful of other resort-zoned areas). Operators outside those zones typically need a 30-day minimum stay or a grandfathered Nonconforming Use Certificate. Verify zoning before modelling any short-term strategy.

3-Bed House: Net Yield Falls to 3.8% on Short-Term, 1.4% on Long-Term

The median 3-bed house in Honolulu sells for $1,077,500, with monthly rent of $2,741 and a short-term nightly rate of $462 at roughly 60% occupancy. Here is the full cost stack for a self-managed operator.

Note: Airbnb charges a host-only fee of 15.5% in the US split-fee model. Vrbo typically charges around 5% and Booking.com around 15%, so platform mix materially shifts these numbers. Direct bookings avoid the fee entirely but require operator-led marketing.

Airbnb Fees, Utilities, and the TAT Take the Biggest Bites

The largest costs eating the short-term premium on a Honolulu 3-bed house are, in order, platform fees of $14,155, the short-term rental tax at 10.3% (around $9,360 per year), and maintenance that runs $14,179 for short-term versus just $10,506 for long-term. Short-term maintenance is higher because the figure includes ongoing furnishing replacement, consumables, and higher wear per turnover; do not add a separate furnishing line on top.

Utilities flip the other way: short-term hosts pay $6,132 per year because guests expect all-inclusive pricing, while long-term tenants typically cover their own meter. Insurance also runs roughly $3,655 versus $2,155, reflecting the higher liability profile of commercial guest use. The combined short-term cost stack of $50,480 against gross revenue of $91,320 leaves $40,840, roughly two and a half times the $15,489 long-term net, in exchange for meaningfully more operational work.

2-Bed Apartment: Lower Entry, HOA Drags on Both Strategies

The median 2-bed apartment in Honolulu lists at $449,565, well below the $1,077,500 house entry. Rent comes in at $1,473 monthly and the short-term nightly rate is $282. The cost stack carries a property-level HOA line that applies regardless of rental strategy.

The HOA row appears in both columns because it is a property-level cost that does not care how you rent. In Honolulu condo buildings, HOA often bundles building insurance, exterior maintenance, common area utilities, and reserve contributions, which reduces some owner-level line items but rarely offsets the gross cost of the fee itself. Many newer Honolulu condos explicitly prohibit short-term rentals in their bylaws, a constraint that sits on top of city-level zoning.

House vs Apartment: Apartment Entry Is Cheaper, But HOA Compresses Net Yield

The apartment entry price of $449,565 is a fraction of the $1,077,500 house price, making it the accessible Honolulu entry point for most investors. But the apartment carries $4,497 in annual HOA fees that houses don't pay, and that single line item compresses both strategies. On a short-term basis, the 3-bed house lands at a 3.8% net yield against the 2-bed apartment's 4.9%. On long-term rental, the comparison is 1.4% for the house against 3.4% for the apartment.

The practical read: the apartment wins on yield (both short-term and long-term net), while the house wins on absolute dollar income from each rental dollar invested due to its higher entry price. In a short-term-restricted city like Honolulu, though, permit access and resort-zone location often matter more than property type. Buyers whose primary thesis is appreciation rather than yield usually accept the thinner cash flow because Hawaii's long-run capital growth and land-scarce supply underpin the premium. Honolulu sits above the state median sale price of $889,042 and well above the national median of $242,500; its gross yield of 3.1% sits below the national median of 5.3%, which is the defining trade-off of a premium market.

Short-Term Break-Even Sits at 22% Occupancy, Well Below the 60% Market Median

The gross break-even occupancy for a 3-bed Honolulu house is 22%, meaning short-term gross revenue matches the annual long-term rent of $31,149 at that occupancy level. This is a floor, not a target. Honolulu's market median short-term occupancy is 60%, so any legally permitted operator achieving city-average utilisation clears the revenue hurdle comfortably. The real risk is not demand, it's permit access. Enforcement has tightened in recent years and operators running outside resort zones face fines.

View Honolulu in the dashboard → Free preview · every bedroom count and property type

These are county medians across 37 ZIPs. Individual neighborhoods diverge significantly: Honolulu (96826) runs a long-term gross yield of 5.6% at a $631,608 entry, while Honolulu (96814) lists at $1,042,406 with a 4.8% yield. The dashboard shows neighborhood-level data for every bedroom count and property type. Explore rental data in the dashboard.

Hiring a Manager Drops Net Yield by Roughly a Third

The tables above assume self-management. Hiring a professional short-term rental manager in Honolulu typically costs around 20% of gross revenue, adding roughly $18,264 per year for a 3-bed house and dropping net yield from 3.8% to 2.1%. On a thin-yield Honolulu property, that is a material compression and many owner-operators choose to self-manage the front-of-house work while outsourcing only cleaning and turnover.

For long-term rentals, letting-agent fees run approximately 8% of rent in the US market, adding around $2,631 per year and pushing long-term net yield to 1.2%. Many Honolulu owners self-manage long-term tenancies given the typically low turnover and straightforward paperwork; the dashboard defaults to the self-managed scenario for this reason.

Depreciation and Schedule E: Hawaii's Building-Ratio Quirk Matters

US investors deduct depreciation over 27.5 years on the building portion of the property value. Hawaii is unusual: the building ratio in Honolulu averages just 50% of the purchase price because land commands such a high share of value. On a $1,077,500 house, that produces a depreciable base of $538,750 and an annual deduction of around $19,591, materially less than the 80% building ratio typical on the mainland. Rental income and expenses flow through Schedule E; Hawaii also has state income tax, which stacks on federal. The dashboard calculates after-tax cash flow using these inputs.

Transaction costs apply on purchase and sale and are not shown in the operating tables above. Honolulu buyers face closing costs, the state conveyance tax, and title and escrow fees; confirm exact figures with your closing agent before modelling a specific transaction.

Data reflects market conditions as of April 2026. See the market score methodology and data sources for how these figures are produced.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.