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I'm probably trying to rationalize the possibility of living in Honolulu - a city that is nearly impossible to 'own a house'. I am a bit curious if others who love Hawaii and rent in Honolulu...how feasable is it to try to purchase and pay off a home on the Big Island, for that eventual retirement that will someday happen...but keep renting and working in HNL during all of the working years?
Now is the time to get some bargains on the Big Island. But it's also the time (with the economy and the vog) to have some substantial trouble renting it out enough to make it work.
I would strongly urge you to get a property manager, though. The 10% of the rent is money well spent.
Just LAND on the Big Island might be another option.
To just buy and own 'land'....is there any concern with that? Property taxes that are a bit too high on it? Any squatting laws that if someone occupies it for so long without being kicked off, they own it?
Just LAND on the Big Island might be another option.
To just buy and own 'land'....is there any concern with that? Property taxes that are a bit too high on it? Any squatting laws that if someone occupies it for so long without being kicked off, they own it?
Property tax on a $12,000 3-acre lot in Puna are under $200 a year.
Low. Might be worth trying to buy something and just 'sit on it'....for 20 years. It seems like an interesting long-term investment.
Seems like there will someday be a day, when all of Puna will be carved up, and established, and definitely won't have land prices like that anymore.
Of course, it seems like that might take 20 years though.
Twenty years from now, that $12,000 parcel in Puna still might be worth $12,000.
Remember that real estate is cyclical. Thirty years ago, that $12,000 lot was probably worth $6,000. Twenty years ago, that $12,000 lot was probably worth $10,000. And, seven years ago, that $12,000 lot might've been worth $80,000. Unfortunately, currency values don't remain static because of inflation and other economic factors; thus, a dollar in 1982 has the purchasing power of $3.60 in 2012. If the value of a $6,000 lot purchased in 1982 kept up with inflation, it should've been worth $21,600 in 2012, not $12,000. Thus, if one had purchased a $6,000 lot in 1982 and sold it for $12,000 in 2012, they'd have a "paper profit" of $6,000 but in reality they would've lost money (taking into account inflation, 30 years of tax payments, and assorted real estate transaction fees). One could've gotten a better return by putting the money in some U.S. Savings Bonds or low-yield municipal bonds, selling them 30 years later, and purchasing the $12,000 lot with the proceeds.
Plus, vacant land can't be rented so it is just a place to stash money and hope the value goes up, although as Jonah K mentioned, it doesn't always work out. (Great post, Jonah, I'd rep you if I could.)
Still, if you intended to retire to it someday, buying a parcel and holding it might be good. If you had vacation time, you could plant a few trees on it and they'd have time to grow before you retired. Providing, of course, the trees were able to grow without any attention or care.
After you've been on the other islands awhile, Honolulu has less and less appeal, IMHO. Way too much traffic and congestion to be able to enjoy the city.
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