Is now a good time to invest in Hawaii Real Estate? (Honolulu: 2013, rentals)
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I have been researching (many hours every day!) the big island of Hawaii for several weeks now with the intent of moving there in the near future. Since we have not visited yet, my findings are based only on internet and forums information.
Research IN DEPTH the various properties you find for sale. The terrain, weather, services available, subdivision fees, regulations, road conditions, elevation, vog, lava zones, insurance, property taxes, zoning, etc., all vary greatly, often even within one single community.
I have discovered a lot of properties are built and sold as "not permitted". This may mean that you will not be allowed to reside in the property building until it has been brought up to code. Some portion, or all, of the building may have to be torn down because it is deemed inhabitable. (don't know much about this yet). Check the building codes..here is one site I found that reviews the codes:
Information Sheet for Residential Construction (http://www.co.hawaii.hi.us/permits/info_const.html - broken link)
I would really spend as much time as you can afford to check into every little aspect possible before considering a purchase. There is a reason some of the properties are inexpensive and not just due to the weak real estate market.
Personally, I have not yet found any real "bargains" when it comes to getting what you are paying for. Those might come up in the near future as more people advertise their homes for sale because of pending foreclosure or anxiety and fear of the upcoming recession. They might bail out and fire sale their home. With the unstable economy it is a "crap shoot" as they say when it comes to real estate. I am just going to keep watching and see what happens.
Good luck to you!
I've been doing the same but I've also visited the island the last few yrs. I strongly recommend a personal visit (or more). E.g., I found Puna to be very affordable and the pics online were nice but they don't tell you about the ferocious mosquitoes when it gets dark!
Hi
anybody can access this online? For days, I've not been able to access the link. Happened in Dec and then came back but I couldn't find all the issues online. I like it for the listing of closings. Otherwise, any other online source of weekly/mthly closing in HI?
Mahalo
I don't think having a property for a vacation rental is the best idea. In the long run you really will not be making that much money. Consider you use an agency they take half and of course there is all the other expenses. A lot of people market it themselves on CraigList and trying to remember the other something like owners rent. You will be lucky to rent it out for 3 months of the entire year. My friend has a really nice 3 bedroom brand new high end house in Hanalei Kauai which he rents out and so far this year it has rented for 3 weeks.
Good luck..
Property managers do not take half as commission. 15 to 20% is the usual rate. Additionally, if you own rental property in Hawaii, whether long term or vacation, Hawaii law requires you to have an on island property manager. This can be a friend who manages only one property for one person, or a professional RE company. If the friend "manages" more than one property for one person, they are required to have a RE license.
Ocean front properties are pricey but hold their value the best in the vacation rental market.
It's going to be a renter's market for the next couple of years. I wouldn't buy, unless it's a cheap vacant property in the country side where you can build your own house, plant a nice garden and have a water catchment system.
I don't think having a property for a vacation rental is the best idea. In the long run you really will not be making that much money. Consider you use an agency they take half and of course there is all the other expenses. A lot of people market it themselves on CraigList and trying to remember the other something like owners rent. You will be lucky to rent it out for 3 months of the entire year. My friend has a really nice 3 bedroom brand new high end house in Hanalei Kauai which he rents out and so far this year it has rented for 3 weeks.
Good luck..
If this is the case, then the price is too high! Lower the price and get renters.
Hi
anybody can access this online? For days, I've not been able to access the link. Happened in Dec and then came back but I couldn't find all the issues online. I like it for the listing of closings. Otherwise, any other online source of weekly/mthly closing in HI?
Mahalo
I've "secured" a pre-qual for a mortgage. However, when I mentioned Hawaii, the mortage rep informed me that in Hawaii, there is a 51% owner-occupy rule for condo. If the resort condo does not have 51% or more of ower occupying the units, they can't sell unless the buyer is planning to move into the unit.
In general, I love Hawaii climate and keep searching until I find that "dream home", be it a patch of land.
I've "secured" a pre-qual for a mortgage. However, when I mentioned Hawaii, the mortage rep informed me that in Hawaii, there is a 51% owner-occupy rule for condo. If the resort condo does not have 51% or more of ower occupying the units, they can't sell unless the buyer is planning to move into the unit.
dpmp, the 51% rule is specific to the loan product your lender has selected for you. If you don't want the 51% rule, ask for a loan product that does not have that requirement. Unfortunately, the current credit market is unusual, and there now may be very few products to choose from. As a long time real estate broker, I suggest you interview a local Hawaii loan officer. Issues such as hurricane, lava and tsunami zones can produce unecessary red flags for mainland lenders/underwriters at the last minute.
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HI Real Estate Weekly?
