The Real Numbers Behind Oahu STR Profitability
Before you buy a vacation rental on Oahu, you need to understand the true financial picture. Between property taxes, income-based taxes, management costs, and operating expenses, the gap between gross revenue and actual profit is much wider than most investors expect.
This is post six in our Oahu Short-Term Rental Guide series. For background on taxes, see our STR tax guide and property tax rate guide.
What an Oahu STR Actually Earns
Let’s start with realistic revenue numbers for Oahu vacation rentals based on 2025–2026 market data:
| Property Type | Location | Avg Nightly Rate | Occupancy | Gross Annual Revenue |
|---|---|---|---|---|
| Waikiki Studio/1BR Condo | Waikiki | $200–$250 | 75–85% | $55,000–$78,000 |
| Waikiki 2BR Condo | Waikiki | $300–$400 | 70–80% | $77,000–$117,000 |
| Ko Olina Villa | Ko Olina | $350–$500 | 65–75% | $83,000–$137,000 |
| NUC-Permitted Home | Various | $250–$400 | 70–80% | $64,000–$117,000 |
The median STR revenue on Oahu is approximately $68,000–$74,000 per year, though top performers in premium locations can exceed $100,000. These are gross numbers before any expenses are deducted.
The Full Cost of Running an STR on Oahu
Here is every major expense category you need to account for when running a vacation rental on Oahu:
1. Income-Based Taxes (18.7% of Gross Revenue)
Oahu STR operators pay three separate taxes on their rental income:
- General Excise Tax (GET): 4.712% (includes Oahu county surcharge)
- Transient Accommodations Tax (TAT): 11% (increased from 10.25% in January 2026)
- Oahu Transient Accommodations Tax (OTAT): 3% (county-level tax)
Combined tax rate: approximately 18.712% of gross rental income. On $75,000 in gross revenue, that is roughly $14,034 in income-based taxes alone. For a full breakdown, see our complete STR tax guide.
2. Property Taxes
STR properties are taxed at significantly higher rates than owner-occupied homes. The classification depends on how your property is used:
- Transient Vacation (Tier 1, ≤$800K): $9.00 per $1,000 of assessed value (0.900%)
- Transient Vacation (Tier 2, >$800K): $11.50 per $1,000 (1.150%)
- Hotel and Resort: $13.90 per $1,000 (1.390%)
A $600,000 Waikiki condo classified as Transient Vacation Tier 1 pays $5,400 per year in property taxes—compared to just $990 if it were owner-occupied. For complete rate tables, see our STR property tax rate guide.
3. HOA and Maintenance Fees
Most STR-eligible condos on Oahu carry monthly HOA fees:
- Waikiki condos: $600–$1,200 per month ($7,200–$14,400/year)
- Ko Olina resort properties: $800–$1,500 per month ($9,600–$18,000/year)
- Older walk-up buildings: $400–$600 per month ($4,800–$7,200/year)
These fees typically cover building insurance, water, sewer, trash, security, and shared amenities like pools and lobbies.
4. Property Management Fees
If you hire a property manager (common for off-island owners), expect to pay 20–25% of gross booking revenue in Hawaii. On $75,000 in annual revenue, that is $15,000–$18,750 per year.
Self-managing saves this cost but requires significant time: guest communication, cleaning coordination, maintenance calls, listing optimization, and 24/7 availability for emergencies.
5. Operating Expenses
Day-to-day costs of running an STR add up quickly:
- Cleaning fees: $100–$200 per turnover (may be partially offset by guest cleaning fees)
- Utilities: $200–$400/month (electricity, internet, cable—all paid by owner)
- Supplies and consumables: $100–$200/month (toiletries, linens, kitchen supplies)
- Furnishing and replacement: $2,000–$5,000/year (furniture wear, appliance repairs, decor updates)
- Insurance (STR-specific policy): $1,500–$3,000/year above standard homeowner’s insurance
- Platform fees: 3% host fee on Airbnb; VRBO varies
- Licensing and registration: Annual NUC renewal ($500), GET/TAT registration fees
- Professional services: $500–$1,500/year (accountant, tax filing for GET/TAT)
Full Profitability Breakdown: Three Real Scenarios
Let’s run the numbers on three common Oahu STR investment scenarios to see what owners actually take home.
Scenario 1: Waikiki 1BR Condo – Self-Managed
Property value: $500,000 | Assessed value: $500,000 | Classification: Transient Vacation Tier 1
| Item | Annual Amount |
|---|---|
| Gross Revenue ($225/night × 78% occupancy) | $64,058 |
| GET + TAT + OTAT (18.712%) | –$11,988 |
| Property tax ($9.00/$1,000) | –$4,500 |
| HOA fees ($750/month) | –$9,000 |
| Utilities ($300/month) | –$3,600 |
| Cleaning (est. 80 turnovers × $120) | –$9,600 |
| Supplies and consumables | –$1,800 |
| Insurance (STR policy) | –$2,000 |
| Platform fees (3%) | –$1,922 |
| Furnishing and repairs | –$3,000 |
| Licensing and professional fees | –$1,500 |
| Net Operating Income | $15,148 |
Net yield on property value: 3.0%
This does not include mortgage payments. If you financed $400,000 at 7%, your annual mortgage cost would be roughly $31,900—meaning this property would be cash-flow negative by about $16,750 per year with financing.
Scenario 2: Waikiki 2BR Condo – Professionally Managed
Property value: $750,000 | Assessed value: $750,000 | Classification: Transient Vacation Tier 1
| Item | Annual Amount |
|---|---|
| Gross Revenue ($350/night × 75% occupancy) | $95,813 |
| GET + TAT + OTAT (18.712%) | –$17,928 |
| Property management (25%) | –$23,953 |
| Property tax ($9.00/$1,000) | –$6,750 |
| HOA fees ($1,000/month) | –$12,000 |
| Utilities ($350/month) | –$4,200 |
| Cleaning (est. 70 turnovers × $150) | –$10,500 |
| Supplies, insurance, furnishing, fees | –$8,500 |
| Platform fees (3%) | –$2,874 |
| Net Operating Income | $9,108 |
Net yield on property value: 1.2%
With professional management taking 25%, the margins become extremely thin. Add a mortgage and this property almost certainly runs at a loss on a cash-flow basis.
Scenario 3: Ko Olina Beach Villa – Professionally Managed
Property value: $1,200,000 | Assessed value: $1,200,000 | Classification: Hotel and Resort
| Item | Annual Amount |
|---|---|
| Gross Revenue ($425/night × 70% occupancy) | $108,588 |
| GET + TAT + OTAT (18.712%) | –$20,319 |
| Property management (25%) | –$27,147 |
| Property tax ($13.90/$1,000) | –$16,680 |
| HOA/resort fees ($1,200/month) | –$14,400 |
| Utilities ($400/month) | –$4,800 |
| Cleaning (est. 65 turnovers × $175) | –$11,375 |
| Supplies, insurance, furnishing, fees | –$10,000 |
| Platform fees (3%) | –$3,258 |
| Net Operating Income | $609 |
Net yield on property value: 0.05%
This high-end Ko Olina property essentially breaks even before any mortgage payment. The combination of the Hotel and Resort property tax rate ($13.90 per $1,000) and professional management fees consumes nearly all the revenue.
Key Takeaways from These Scenarios
- Self-managed STRs in Waikiki can generate positive cash flow if purchased with significant equity or all-cash, but margins are tight even without a mortgage.
- Professionally managed properties struggle to generate meaningful net income due to the 25% management fee layered on top of Hawaii’s 18.7% tax burden.
- Higher-value properties face compounding challenges: higher property tax tiers, larger HOA fees, and higher absolute management costs.
- Mortgage financing makes most Oahu STRs cash-flow negative. The investment thesis shifts to appreciation and equity building rather than monthly income.
STR vs. Long-Term Rental: A Side-by-Side Comparison
How does STR income compare to simply renting your property long-term? Here is a comparison using the same $500,000 Waikiki 1BR condo:
| Factor | Short-Term Rental | Long-Term Rental |
|---|---|---|
| Gross annual revenue | $64,058 | $24,000 ($2,000/month) |
| Income taxes (GET/TAT/OTAT) | –$11,988 (18.7%) | –$1,131 (4.712% GET only) |
| Property tax classification | Transient Vacation ($4,500) | Residential A ($2,000) |
| Management fees | $0 (self-managed) to $16,000 | $0 to $2,400 (10%) |
| Cleaning and turnover | $9,600 | Minimal |
| Furnishing costs | $3,000/year | $0 (unfurnished) |
| Utilities | $3,600 (owner pays) | $0 (tenant pays) |
| Estimated NOI (self-managed) | $15,148 | $18,469 |
In many cases, a long-term rental actually produces higher net operating income with far less work. The STR advantage only appears at higher occupancy rates and nightly rates—and disappears entirely with professional management.
When an Oahu STR Can Still Be Profitable
Despite the challenging numbers, some Oahu STR investments do work. Here are the conditions that favor profitability:
- All-cash purchase or significant equity: Eliminating or minimizing mortgage payments is the single biggest factor in STR profitability.
- Self-management: Saving 20–25% in management fees can mean the difference between profit and loss.
- Premium pricing power: Properties with ocean views, resort amenities, or unique features command higher nightly rates that improve margins.
- Low HOA fees: Older buildings with lower maintenance fees preserve more of the gross revenue.
- High occupancy in resort zones: Waikiki and Ko Olina properties in desirable locations can sustain 80%+ occupancy year-round.
- NUC properties in desirable neighborhoods: Unique homes with NUC permits can command premium rates with less competition.
- Appreciation play: Many investors accept break-even cash flow because Oahu real estate has historically appreciated 3–5% annually.
The Bottom Line
Running an STR on Oahu is not the easy money that many investors imagine. Between Hawaii’s 18.7% income tax burden, elevated property tax rates, high HOA fees, and the operational demands of guest turnover, the path to profitability is narrow.
The most successful STR owners on Oahu tend to be local, hands-on operators who purchased with substantial equity and treat the property as a business—not a passive investment. If you are considering an STR purchase, run the numbers carefully using the framework in this guide before making an offer.
Oahu Short-Term Rental Guide – Full Series
This post is part of our comprehensive guide to short-term rentals on Oahu. Read the full series:
- Short-Term Rentals on Oahu in 2026: Overview
- Where You Can Legally Operate an STR on Oahu – Zoning Explained
- NUCs on Oahu: What Buyers and Owners Must Know
- Every Tax You Pay as an Oahu STR Owner (GET, TAT, OTAT)
- Oahu STR Property Tax Rates for 2025–2026
- Is an Oahu STR Actually Profitable? Financial Modeling (You are here)
- How to Register Your STR Step by Step
- STR Insurance and Liability
- Operating Rules: Noise, Parking, Advertising
- Enforcement, Fines, and How the City Catches Illegal Rentals
- Condo STRs: HOA Rules and AOAO Restrictions
- Mid-Term Rentals (30–89 Days): The Alternative Strategy
- How to Buy an STR Property on Oahu
- Selling a Property with an STR Permit or NUC
- The Future of STRs on Oahu
Questions About STR Profitability on Oahu?
Whether you are evaluating an STR investment or considering selling a property with an existing permit, our team can help you run the numbers. We work with buyers and sellers across Oahu every day.
Contact Kristy and Austin to start the conversation, or visit our home buying page to learn more about purchasing property on Oahu. You can also explore listings in our featured communities including Ho’opili, Kapolei, Waikiki, and Ko Olina.