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The Value of Residential STVRs in Hawaii County: Why Grandfathered Properties Like Puako 143 Are More Valuable Than Ever

  • Writer: Jan Nores, RS
    Jan Nores, RS
  • Jan 4
  • 4 min read

As we enter 2026, many buyers and investors are asking the same question: “What is really worth owning in Hawaii right now?” The answer is becoming clearer and clearer: grandfathered residential Short-Term Vacation Rentals (STVRs) are worth a lot and will be for a long time. This is due to changing rules, rising ownership costs, and strong demand for high-quality vacation rentals.


Puako 143, a rare, permitted residential STVR in one of the Big Island’s most popular seaside communities, is one of the best examples of this.


House surrounded by lush green trees and plants, under a clear blue sky. Bright sunlight enhances the vibrant garden setting, creating a serene mood.

What You Need to Know About Residential STVRs in Hawaii County


It’s important to understand how the rules work to fully appreciate qualities like Puako 143.

Hawaii County stopped letting new STVRs in residential zoning on April 1, 2019. Short-term rentals are currently allowed only in resort-zoned areas, provided the property was lawfully operating as a vacation rental before that date.


So,


  • Existing residential STVRs are still valid 

  • They can be transferred to new owners 

  • No new residential STVR licenses can be made


This one thing has turned licensed residential STVRs into a “finite, diminishing asset class.” Once these homes are no longer available for vacation rentals or are used for something else, they are gone for good.


From an investment perspective, scarcity drives value. Residential STVRs are currently some of the hardest-to-find properties in Hawaii County real estate.


Bright living room with large windows showing greenery. Brown sofa with yellow pillows, marble counter, beach art, and ceiling fan add charm.

Why Grandfathered STVRs Are So Valuable


Owning a residential STVR gives you something that few other properties can: multiple layers of value.


  1. Income Generation

    A well-run STVR can generate substantial rental income, helping cover the cost of owning the property or even paying it off.


  2. Flexibility in Lifestyle

    Owners can live in the house and make money while it isn’t in use.


  3. Future Security

    These properties are great for second homes that can one day become retirement residences. You can rent them out now and enjoy them later.


  4. Appeal to Investors

    Investors are still hunting for legal, income-generating properties outside resort areas because no new residential STVRs have been approved.


Puako 143 meets all of these requirements and more.


Elevated house with white railing, nestled among lush green trees, with a double garage and a sunlit driveway, creating a serene atmosphere.

Puako 143: A Great Example of STVR Value


Puako 143 is a permitted residential STVR at the quiet south end of Puako Beach Drive. It is a beautifully renovated and tastefully designed property that captures the essence of island living.


This property generates around $100,000 in net revenue per year. This is an impressive number that shows how popular it is and how well it works as a vacation rental.


This amount of income can make a big difference for purchasers who are thinking about the financial side of owning a home:


  • Offset mortgage payments

  • Pay for property taxes, insurance, and upkeep

  • Lower the total cost of ownership

  • Increase the long-term return on investment


In short, Puako 143 makes the property work for you.


Bright open-plan kitchen and living room with vaulted ceiling. Features a kitchen island, cozy sectional sofa, and large windows with lush greenery.

Flexible Living, Designed for Income and Enjoyment


One of the reasons Puako 143 performs so well as an STVR is its flexible configuration.


Upstairs, the main living space has:


  • Three bedrooms and two bathrooms

  • An open-concept floor plan

  • A spacious, covered lanai that’s perfect for dinners at sunset and get-togethers at night


Bright room with a bed, kitchenette, white furniture, and tropical decor. Large window reveals a lush garden. Calm and inviting atmosphere.

Downstairs, there is a big, quiet studio that has:


  • A private patio

  • Quiet views of the garden

  • A separate place for guests, extended relatives, or renters to stay


This dual-living design is quite appealing to vacationers and offers owners many options. They can rent both spaces together, individually, or keep one area for themselves.


Covered patio with wicker furniture and glass table, surrounded by lush greenery. Wooden floor and roof beams enhance the tropical vibe.

The Best of Outdoor Living


Puako is all about outdoor living, and this home embraces it beautifully.


  • Mauka lanai: Have your morning coffee while taking in the beautiful views of the Kiawe forest and Mauna Kea.

  • Makai lanai: Relax in the afternoon with gentle ocean breezes and soft water views.


You can even install a pool, which would make the home much more appealing to guests and improve its rental performance.


The full-size lot gives you space, privacy, and possibility, while the big two-car garage and separate laundry room make things easier.


Two-story beige house with green lawn and sun loungers, surrounded by lush trees under clear blue sky, creating a calm outdoor setting.

ADU Potential: Thinking Ahead


Another essential aspect of Puako 143's significance is that it aligns with Hawaii’s ADU (Accessory Dwelling Unit) rules.


ADUs can:


  • Provide additional living space

  • Give you more possibilities for long-term rentals

  • Make life with many generations easier

  • Add value for resale in the future


This flexibility is a big plus for those who want to plan ahead. (You may get more information about ADUs at hawaiiadu.org.)


Rocky beach with black lava rocks, clear blue ocean, and palm trees under a bright blue sky. Calm, serene atmosphere.

Puako: A Community That Holds Its Value


Location is important, and Puako is a unique place.


People adore this beachfront neighborhood because of:


  • World-class snorkeling

  • Sea turtles sunbathing on lava rocks

  • A strong feeling of community

  • Proximity to Mauna Lani, Waikoloa Beach Resort, and other Kohala Coast world-class resorts and their amenities


Puako isn’t a resort area, so it feels more like a real neighborhood. Still, there is a huge demand for licensed STVRs here. That mix is quite unique and highly sought after.


Rocky beach with black lava rocks, turquoise ocean, and palm trees under a clear blue sky. A person strolls in the distance, creating a serene mood.

Ideal for Investors, Second-Home Buyers, and Future Retirees


Puako 143 is a home that grows with you.


  • Investors like the high net income and grandfathered STVR status.

  • Second-home owners like having a place in paradise that offsets the costs.

  • Future retirees can buy a home now, make money now, and move to the island full-time later.


This level of flexibility isn’t common in many properties, especially with the rules we have now.


Starting 2026 with a Smart, Strategic Move


I’ve been a realtor for more than 40 years, and I’ve watched markets shift, rules change, and chances come and go. One thing is always true: the best investments are those that give you a good lifestyle, a good income, and long-term security.


No more licensed residential STVRs are being made, although they are still being sold. That means that residences like Puako 143 are more than just homes; they are also smart investments.


This could be the best deal you make in 2026 if you’ve been waiting for the right time. It will bring you joy, money, and peace of mind for years to come.


Let’s explore what’s possible - right here in Puako.


Learn more about Puako 143 here.

 

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