Buying Advice

Is Owning a Maui Bed and Breakfast Your Dream? Start With a Property Like 160 Nahele And Make Life Easier

Is Running a Bed And Breakfast on Maui Your Dream?

One of the most common questions we field as a Maui Realtor is, "how can I buy a bed and breakfast?", the only correct answer is, "you can't." You can, however, look for a property that is the most prepared to pass county regulations on a Bed and Breakfast. Being that 160 Nahele was a licensed B&B for 9 years (link to the rental site with 59 reviews), it's as good of a start as you can get, I'll explain why.

What is a B&B?

According to Maui County: "The new legislation adopted by the County Council on December 19, 2008 and signed into law by Mayor Tavares defines a “bed and breakfast home” as a use in which overnight accommodations are provided to guests for compensation for periods of less than 180 days, in no more than two detached single-family dwelling units, one of which is occupied by the owner-proprietor."

Typically, B&B's on Maui's North Shore would be a house and cottage. The best case scenario would be a lot of more than 2 acres, but less than 5. With 2 acres your cottage can be as large as 1,000 sqft, and under 5 acres you can avoid having to show revenue from ag. The larger cottage is key being that the owner of the residence will need to reside on the property and be a full-time Maui resident (recently changed from 180 days to 270 days). 160 Nahele has a beautiful house and cottage that are extremely private from one another, they feel like two separate lots.

Pool Area At The Main House

Cottage/Ohana

A Few Key Steps/Facts To Obtaining Your B&B License

1. Find the right house

2. If the subject property is zoned agricultural you will need to have an implemented farm plan (link to Farm Plan Application). If the subject parcel is more than 5 acres then you will need to show an annual gross farm income of $35,000 for the previous two years. 160 Nahele is a great example of being under the 5-acre mark at 4.22 acres and having a fully implemented farm plan.

3. There is a cap on how many B&B's can be in each district. Here is the break down:

Hana: 48 Kihei-Makena: 100 Makawao-Pukulani-Kula: 40 Paia-Haiku: 88 Wailuku-Kahului: 36 West Maui: 88

Currently, the Maui Planning Commission is in the process of changing the code so that the Paia-Haiku Community Plan and the Short Term Rental Home Ordinance in Chapter 19 are not in conflict any longer. If you would like to discuss this further shoot me an email (contact info at the bottom of the article).

4. You'll need to post a 16 sqft notice to neighbor sign within 5 feet of your property entrance. The sign must be placed 5 days prior to applying and must remain there through the entire application process.

5. Only six bedrooms or less can be designated for rent in the B&B. 160 Nahele has four bedrooms, 3 baths in the main home or you could designate the two bedrooms, two bathrooms in the cottage.

Main Home and Pool

6. At least one onsite visit from the county will be necessary, this is probably the biggest hurdle. The county will be looking for discrepancies between what is permitted and what is actually on the property, very rarely are homes in complete compliance. This is another huge benefit of 160 Nahele having gone through the process of being in full compliance.

7. You will need to notify all neighbors of record within 500 feet that you are applying for a B&B. They will have the opportunity to have written protest, and if 30% or more of them do protest, then additional steps with the planning commission will have to take place.

There are many more steps to obtaining your license. To see the full process take a look at the application here.

Want more on 160 Nahele?

If you cannot tell already, I am a big fan of this listing. You can read more about it here or reach out directly to me.

Finding the right home takes local market knowledge and experience, let The Stice Team's 45 years of Maui real estate expertise go to work for you. Give me a call or shoot me an email, we can talk about your Maui dream home.

Tim Stice Realtor/Broker

timastice@gmail.com

808.268.8511

Maui Woman Saves $40,000 Shopping Loans

Shopping lenders is not something that I have done over the course of my 38 years in real estate, but this time something really opened my eyes. By making two complete loan applications, paying for two appraisals, with two different lenders at the same time, we helped our daughter and her husband save over $40,000 over the term of the loan on the purchase of their first home.

Maui Woman Saves $40,000 Shopping Loans

Shopping lenders is not something that I have done over the course of my 38 years in real estate, but this time something really opened my eyes. By making two complete loan applications, paying for two appraisals, with two different lenders at the same time, we helped our daughter and her husband save over $40,000 over the term of the loan on the purchase of their first home. It had been my custom to be loyal to my local lenders who give good service and fair rates to my clients, I frankly, I never suggested actually making con-current applications with two different lenders at the same time. But in this case, the home purchase was in another state, not Hawaii, and I had no lender loyalties, so shopping loans made sense.

Is this legal?

I did some research and actually found out that since the Dodd-Frank Anti-Predatory Lending Act totally changed the lending game, that shopping loans is absolutely legal and makes business sense. We all shop credit card rates, car loan rates, and practically everything else. Why assume all lenders are the same? I can assure you that after this experience, they are not the same. Is it ethical? If you let the lenders know you are shopping, then they are put on notice. This happens to real estate agents all the time.

What are the implications on your credit report?

What has now changed is that if you are shopping at the same time, running two different loan applications no longer dings your credit report. The lenders used to have the advantage that if you applied with one, they would correctly tell you that if you applied with another lender, your credit score would drop. This is no longer true. There is a window of between 15 to 45 days for concurrent loan applications. See MyFico for details.

In our case, we were helping our daughter and son in law purchase their first home. The purchase was $375,000 with a 20% down conventional loan. Our Realtor recommended a couple of local lenders that he uses and we contacted one, a mortgage banker. We made an online application and the lender came back with a rate quote of 4.55%. Being in the business on Maui, I felt this was quite high relative to even the Maui market as sometimes things cost more here.

My daughter Chloe and her husband Zack just purchased their first home

On a whim, I contacted an internet lender to shop loans and came back with an initial rate quote of 3.99% which was a lot more acceptable. Frankly, the loan costs were less than half of the local lender as well. I was astounded at the rate difference and sent the loan disclosure back to lender #1 and asked if they would be willing to adjust their rate to be more competitive. The answer was, "I don't set the rates, the company does," with no offer of help or assistance. Lender #2, the internet lender, was totally on the ball and gave us some credit counseling to pay off one $1900 credit card that raised the credit score by 30 points and dropped the rate to 3.85%.

The monthly payment difference was $118.27 and over the term of the loan was a savings of $42,577.20! 

So if you are a home buyer or even looking to refinance, you may want to consider your options. Investing $600 to save over $40,000 is a great savings. It will take 5 months of savings to pay for the extra appraisal fee and you may have two or more options when it comes time to actually sign your loan documents.

Needless to say, my baby girl and her husband are delighted with the savings and their new farm for their dogs and horses, and hopefully soon some children for Grandpa and Grandma in Hawaii to come visit.

If you are a buyer and need some help and suggestions on how to do this, please call me. It only took me 38 years in the real estate business in Hawaii to learn this new tool, and I would love to share what I learned in this process.

Tracy S. Stice Realtor - Broker    tracy@hawaiilife.com    808-281-5411

Haiku Town Acres - An Update on Maui's New Subdivision

Each week I have been looking over the permits and plans on county sites to keep my clients informed on what's happening around them. I read over all 117 pages of the subdivision plan, and this is what I came up with.

Haiku Town Acres - An Update on Maui's New Subdivision

What the Developer Has In Store for Haiku Town Acres

This is a follow up to my previous blog, "New Development In Haiku, Maui, Haiku Town Acres."

Each week I have been looking over the permits and plans on county sites to keep my clients informed on what's happening around them. I read over all 117 pages of the subdivision plan, and this is what I came up with.

Water

Haiku Town Acres will be supplied by a 465ft deep well. The well will be located to the left of the entrance on Auwaha St, across from Kauhikoa. The 300,000-gallon holding tank will be located at the southwest corner of the subdivision at the back of the cul de sac. The well seems to be chlorine treated, which is common practice on Maui.

Electricity

The subdivision will be supplied by underground power. This is good news for neighbors looking to keep their view planes free of power lines. I was also curious to know if there were to be numerous street lights, and it looks like only two (one at each entrance) will be installed. I personally like to keep the light pollution down; Haiku stars are some of the best.

View of the Milky Way from my outdoor shower in Haiku

Landscaping

The developer is required to place basic landscaping along the roadways and seed green areas. On the prints, it looks like they will be placing Milo Trees and Bottle Brush Trees along the main streets. The grass variety they chose is St Augustine. Of course, once the lots are purchased, they can be planted which ever way they wish. Ag zoned lots are protected by the Hawaii Right to Farm Act 165; this helps keep the country, country.

According to the University of Hawaii Rain Atlas, this area receives 59.3 inches of rain per year. Due to this, the developers have installed 8 retention basins throughout the neighborhood.

What Land is Currently Available in Haiku?

This project is still in the works, so I have gathered up all of the active land listings over 2 acres in Haiku. Here is the link to all 43 properties. Give me a call or shoot me an email, and we can go into specifics on any of these lots.

Tim Stice

timastice@gmail.com

808.268.8511