I just spent a few weeks traveling on the Mainland.
I heard a lot of people say they wanted to move to “Hawaii.” Many think of Hawaii as one place. it’s not: there are several island, all with a different lifestyle, cost of living and job market. This blog focuses on real estate on Hawaii Island.
I spent about twenty minutes talking to a guy who had ï¿½discoveredï¿½ a lot of inexpensive land on Hawaii Island. Without trying to burst his bubble, I asked him about what he had found. He said found a lot of land that is inexpensive, relatively speaking, in South Kona and a lot of affordable properties in a place called Puna.
Clearly, he had very little understanding of Hawaii real estate. Here are some interesting things that many Mainlanders need to understand.
- The Big Island is truly big. From Kona, on the west side of the island to Hilo on the east side, it takes about an hour and thirty minutes by car. Some people buy relatively inexpensive property in the rural areas only to find that the commute to a good job is one or two hours each way!
- Location matters a lot. The sunshine and beaches are on the west (leeward side) and the rain and tropical vegetation are on the east (windward side). The wealth, for the most part, is on the west side. The south part of the island has a ton of inexpensive lots available, but you will be one to two hours (at times with no traffic) away from Kailua-Kona or Hilo.
- You might not own the land! A huge trust owns a lot of the land in South Kona. They own the land; you lease it and depending on the lease cycle, you may only have the rights to live on the land for five or ten more years. You can always renew the lease, but you will always be renting the land. Few of the leases go beyond thirty-five years, which will create issues if you want to sell the property when your remaining lease term is less than 30 years, as banks wonï¿½t lend for real estate for a term that exceeds the lease. Note: if youï¿½re a cash buyer, you have a lot of bargaining power for real estate with only a handful of years left on the lease. That said, you need to have faith that your lease will be renewed!
- If buying a condo, be sure to understand what your Association fees and the financial condition of the Association. These fees cover outside maintenance, management, pools, gardens, trash removal, etc. They can be several hundred or a few thousand dollars a month. If your Association is in poor fiscal health, you might be looking at an assessmentï¿½one-time costï¿½shared by all owners. Oceanfront properties often have huge maintenance costs, so if your Associationï¿½s reserves are low or there are unexpected costs, you could be looking at thousands of dollars.
I highly recommend finding a good realtor in Kona, Hilo or Waimea if you are seriously considering property on the Big Island. Itï¿½s easy to fall in love with the islandï¿½s natural beauty on land and sea and invest in something that does not suit your intended lifestyle or financial goals.