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Lately there have been more foreclosure listings in the newspaper than available job listings. A second home would be better than a primary residence if a job is required to support the mortgage.
Lately there have been more foreclosure listings in the newspaper than available job listings. A second home would be better than a primary residence if a job is required to support the mortgage.
Hmm, that was a bit convoluted, wasn't it? I guess that's what happens when folks type without coffee. I'll try again.
If you need to have a job to support purchasing a home in Hawaii it will be difficult to do since there are more foreclosure listings than help wanted ads. Since second homes are usually supported by income from other areas which have higher income levels, then it would be a good time to look at buying a second home.
Hmm, that was a bit convoluted, wasn't it? I guess that's what happens when folks type without coffee. I'll try again.
If you need to have a job to support purchasing a home in Hawaii it will be difficult to do since there are more foreclosure listings than help wanted ads. Since second homes are usually supported by income from other areas which have higher income levels, then it would be a good time to look at buying a second home.
I would've simply stated the following...
If you can afford it, now is a good time to purchase a second home in some parts of Hawai'i.
Hmm, that was a bit convoluted, wasn't it? I guess that's what happens when folks type without coffee. I'll try again.
If you need to have a job to support purchasing a home in Hawaii it will be difficult to do since there are more foreclosure listings than help wanted ads. Since second homes are usually supported by income from other areas which have higher income levels, then it would be a good time to look at buying a second home.
Beg to differ.
Right now, the occupancy level of vacation rentals in Hawaii (second homes) is so low that the odds of positive cash flow on one are minimal.
I usually agree with what you say hotzcatz, but on this one, I have some personal (and painful) experience.
Right now, the occupancy level of vacation rentals in Hawaii (second homes) is so low that the odds of positive cash flow on one are minimal.
Not all second homes are "vacation rentals." I doubt that Genshiro Kawamoto, Pierre Omidyar, Oprah Winfrey, and others worry about having "positive cash flow" on their second homes (or third, fourth, and fifth homes).
True, I was wondering if I should have added the caveat about not being able to rent the second home for enough to pay the mortgage. I just figured folks that had enough to consider getting another house would have enough $$$ to buy it outright.
Actually, it's the folks who have higher incomes from other places who want to have a second home in Hawaii who are a large part of the reason why folks here can't afford houses. If houses are in an area nobody wants to vacation in, then the house prices are generally tied directly to the local economy. A small town in the middle of nowhere where the sole economic engine is a widget factory will have houses nearby that folks working at the widget factory can afford. Nobody else wants the houses and that's all the folks can afford so that's the sales price of the houses. Unfortunately that doesn't work in most places in Hawaii. Loads of folks want to move here and live here, even if it is part time. So folks who are making a whole heck of a lot more money on the mainland compared to the folks working here in a service economy can come in and buy up the houses. It used to be they would buy up houses in the fancy areas and leave the regular houses for the local folks. Now however, I'm seeing a trend for higher income mainland folks buying the smaller houses. These smaller houses are usually much closer to their neighbors than the large estate type houses so the new transplants are having more trouble than usual fitting in with their neighbors since the new transplants have absolutely nothing in common with the neighborhood. Frequently there are attempts to change the neighborhood to match mainland sensibilities, which doesn't go over well, either. Still, a few new neighbors here and there is a good thing, it does help keep the neighborhood from stagnating.
IMHO, for someone to be a good fit in a neighborhood, they should interact (nicely) with their neighbors, shop at the local stores, go to the local churches, temples or hongwanji (if they celebrate some religion), have some sort of common interests as the rest of the neighborhood and do something with at least some of their new neighbors even if it is just a weekly walk around the block.
It's an interesting and complex debate on this subject. I don't disagree, but I have friends who have a second home in Makena, and they say they pay a higher homeowner tax rate, they don't use the infrastructure very often, and when they do come they buy groceries or eat out every day. They don't rent a car because they have one stored here, but the they do buy gasoline and pay for car registration. In addition, he goes windsurfing or swimming as much as possible, and she shops or works from 2nd home. Both of those activities means spending money locally at some point.
They have internet and cable TV, rent movies, buy airline tickets. They happen to lend (not rent) their home to friends, so those people come here and while they don't pay for hotel/condo, they do all the visitor things and pay for that. The homeowners also have a housecleaner who cleans up when someone leaves.
I know this might not be the norm for 2nd home people, but I see their point. They know some of their neighbors and aren't involved in island politics, but they surely pay more in a year than the average visitor... and I think they bring more to the Maui economy than some of my neighbors!
Maui is still really headed in the direction of dependence on the visitor industry. Ag is down, and while there are many local sustainability efforts, there isn't (yet) any big idea in play that would change the primary source of revenue for the majority of the residents. Given that, and the ever-changing climate of the visitor industry, maybe some steady income from semi-occupied homes is better than no income from semi-occupied hotels. The hotels go under and put a lot of folks out of work, or have regular staffing hire/fire cycles.
Tough to say. I am not wise enough to see a solution.
Lenders are definitely more wary of lending for second properties.
A few years ago, 40% of all mortgages were for second homes. Amazing.
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