Questions About Hawaiian Beaches Subdivision (Ainaloa: renter, homeowners insurance, eviction)

[reefshadow]

Hello! We are 5-7 years out from relocating to Hawaii and have made several trips out in the last couple of years. The plan is to move to the Puna district, most likely either Ainaloa, HPP or Hawaiian Beaches. I love the lot size, infrastructure, and prices in HB. Extremely fast Internet is a must, he is a software developer and I'm an RN (I may work remote as well).

Question- we have been contemplating going ahead and investing in a home there sometime in the next year and renting it out until our move. Looking at a decently updated, clean 3/2 with 20-25% down. We have spoken to one mortgage broker who indicated LZ 2 homeowners insurance runs about double normal, is this accurate? We would use a property management service to rent out the home, and a figure around 1300-1400/month without utilities is the most common rental amount I am seeing on rental sites for HB. We would likely allow pet(s). Is this number reasonably accurate? Are vacancies a big problem for outlying subs like HB?

Thanks for the help!

[hotzcatz]

Run the numbers and ask the property management company their costs as well. There's a high unemployment rate at the moment and good renters are hard to find but maybe the management company has a list of renters.


It's a requirement that off island property owners have an on island property manager, but you probably already knew that. Can you ask what their vacancy rates are? How often are properties vacant, how long do they stay that way, etc.



Hard to say where things will be in five to seven years.

[reefshadow]

Thanks for the reply hotzcatz. I've looked at different management companies but have yet to call. I will put that on the agenda.

If anyone can chime in on what they pay for rent or insurance (if they own) in HB, that would be great. I am especially wanting to know about insurance rates. Not quite sure I would get real, unvarnished answers from Realtors or brokers, and as an ongoing cost it's a big piece of the equation!

[grantw]

LZ2 in Ocean View. Home valued at $265. Annual Homeowner's insurance is @ $1,800/year through Kurt Black at Paradise Insurance. All other insurance companies quoted double or more.

[whtviper1]

Originally Posted by grantw

LZ2 in Ocean View. Home valued at $265. Annual Homeowner's insurance is @ $1,800/year through Kurt Black at Paradise Insurance. All other insurance companies quoted double or more.

Yikes. Even a million dollar place on Oahu would probably be half that.

[Nyfinestbxtf]

Originally Posted by reefshadow

Hello! We are 5-7 years out from relocating to Hawaii and have made several trips out in the last couple of years. The plan is to move to the Puna district, most likely either Ainaloa, HPP or Hawaiian Beaches. I love the lot size, infrastructure, and prices in HB. Extremely fast Internet is a must, he is a software developer and I'm an RN (I may work remote as well).

Question- we have been contemplating going ahead and investing in a home there sometime in the next year and renting it out until our move. Looking at a decently updated, clean 3/2 with 20-25% down. We have spoken to one mortgage broker who indicated LZ 2 homeowners insurance runs about double normal, is this accurate? We would use a property management service to rent out the home, and a figure around 1300-1400/month without utilities is the most common rental amount I am seeing on rental sites for HB. We would likely allow pet(s). Is this number reasonably accurate? Are vacancies a big problem for outlying subs like HB?

Thanks for the help!

There are three subdivisions within Hawaiian Beaches. There is Hawaiian Beaches, Hawaiian Shores, and I think Hawaiian Parks. Hawaiian Shores is said to be the best of the three. They all have mail delivery and county water. No catchment tank. Hawaiian Shores is pretty much to the right side of Kahakai Blvd. There won’t be any google street view of the properties because on the dead end roads it will say on the pavement, “private property.” That is all Hawaiian Shores.

Our home owner insurance there in LZ2 I think is $130 a month. Not too sure. Wasn’t as bad as I thought it would be. Property taxes are $600 annually. We have a 3 br 2 bath 1200 sq ft house.

We have Spectrum for cable and internet. Our internet speed is about 60mbps. Not sure if they have higher speed than that.

[whtviper1]

Originally Posted by Nyfinestbxtf

We have Spectrum for cable and internet. Our internet speed is about 60mbps. Not sure if they have higher speed than that.

Spectrum starting speeds in Hawaii are 100 mbps. If you aren’t getting that call them or maybe it is your router if wireless.

[reefshadow]

Thanks for all the info! Sounds like the broker was being honest that it runs about double.

Any experiences with renting in the area?

[hotzcatz]

Do you really want to be a landlord during a time of 20% or more unemployment? We've dropped our rental rates by over 20% on two of our properties in order to get solid renters in them who don't depend on employment to pay the rent. One of them has been at reduced rates (50% off) because that's what the renter can now afford. Half is better than none and it is being paid so we consider ourselves lucky. Worst case is if a renter doesn't pay at all and doesn't leave. Hmm, well, absolute worst would be doesn't pay and doesn't leave until after trashing the place.


So, IMHO, if you do go ahead with this plan, assume lower rents than are shown on Craig's List, figure there will be more vacancy time or more time when the renter won't pay and won't leave. There's been some sort of moratorium on renter evictions, I think? We've not had a non-paying renter so haven't had this issue, but we've lowered the rents to where they can pay. We've been leery about new renters since the ones who have been evicted for non-payment are going to have to go somewhere.


It's one thing if you want to buy and live in it, but buying a house in Hawaii at this time as a money making scheme or even paying it's own mortgage scheme seems risky to me at this time, YMMV.

[reefshadow]

Originally Posted by hotzcatz

Do you really want to be a landlord during a time of 20% or more unemployment? We've dropped our rental rates by over 20% on two of our properties in order to get solid renters in them who don't depend on employment to pay the rent. One of them has been at reduced rates (50% off) because that's what the renter can now afford. Half is better than none and it is being paid so we consider ourselves lucky. Worst case is if a renter doesn't pay at all and doesn't leave. Hmm, well, absolute worst would be doesn't pay and doesn't leave until after trashing the place.


So, IMHO, if you do go ahead with this plan, assume lower rents than are shown on Craig's List, figure there will be more vacancy time or more time when the renter won't pay and won't leave. There's been some sort of moratorium on renter evictions, I think? We've not had a non-paying renter so haven't had this issue, but we've lowered the rents to where they can pay. We've been leery about new renters since the ones who have been evicted for non-payment are going to have to go somewhere.


It's one thing if you want to buy and live in it, but buying a house in Hawaii at this time as a money making scheme or even paying it's own mortgage scheme seems risky to me at this time, YMMV.

Thanks much, you are right. We will likely wait and reassess in 6 months, since both eviction moratoriums and mortgage forbearance will likely be over. It may be possible to pick up a desired property for much cheaper at that time anyway. However lower interest rates right now are highly attractive.

It's hard to find accurate economic numbers for specific areas of Hawaii. Since Puna is much less reliant on tourism, I assumed unemployment rates may be a bit lower than the state average but maybe not.

Thanks!