Moving to Hawaii is a dream for many people. However, buying a home in Hawaii can be a lot more difficult than you might expect and it is definitely more difficult than buying a house on the mainland.
Prior to even starting to look into buying a house in Hawaii and doing research about it, you should really decide which island fits you the best and which island you’re going to end up moving to. Each island has its own lifestyle, climate, job market and housing market.
To get you started, read these articles as well:
- Which Island Should I Move to in Hawaii?
- Hawaii: By the Numbers (unemployment, size and cost of living on each island)
- And, to a lesser extent:
- What to Bring with You When You Move to Hawaii (we’ll be visiting this more in this series)
Buying a House in Hawaii
Ways to Buy
There are two ways to buy a house in Hawaii. One is “fee simple” and the other is “leasehold”.
Fee Simple: You buy the house and the land that it sits on.
Leasehold: You but the house but lease the land that it sits on for a monthly “rent”.
There are advantages to both.
Fee simple, is pretty obvious. You own the land and the house and you don’t have to ask permission (unless it’s for a permit or something) to plant, build or otherwise do any that you want to your land.
With leasehold you don’t own the land but you may be able to get a cheap house out of it. Leasehold homes for sale in Hawaii are more difficult to sell. So, you may be able to get a really cheap home which will even out the mortgage and land lease payment.
Also, while buying fee simple in Hawaii is just like buying a house in the rest of the country, there are special considerations to take into account when buying leasehold house in Hawaii.
- How long is left on the lease? If there is 30 to 50 years left then you probably won’t have a problem in your lifetime but what if you want to pass that house on to children or grandchildren? Will they have issues renewing?
- How much is the monthly payment? Can and will it go up?
- Can you negotiate a fee simple buyout later on in life? How much will that be?
- When do you have to renegotiate your leasehold land? There should be a built in clause so that all parties are aware and tracking the renegotiation time-frame.
- What happens once the lease term is up? Can you renegotiate? Can your heirs renegotiate? Can your heirs by the land or does that have to be accomplished before you leave or die?
The Type of View
The type of view that you want will be a factor, too. There are no view, ocean view and mountain view.
“No view” homes don’t happen often in Hawaii but they do exist and are usually found in tightly packed residential areas. Ocean view in Hawaii is coveted and more expensive. Mountain view can majestic in its own right and sometimes found for a bargain.
Yes, this is a real thing. The United States Geological Service has come up with a classification and zoning structure for lava flow property. These are Lava Zones 1 thru 6 with 1 being likely to see lava flow again and 6 not being so likely.
If you’re looking at a Lava Zone 1 or 2 property then your insurance is going to be more expensive.
Real Estate Agents and Home Sellers
Selling and buying a home is a little bit “different” than buying a home on the mainland. The island lifestyle and relaxed outlook can sometimes get in the way and kill the determination of a motivated buyer. You can read this account of how frustrating the process of buying a home in Hawaii can be.
Real Estate Agents in Hawaii are motivated to move homes. They get paid and form a reputation of being good at what they do when homes move quickly. However, be sure to pick a reputable real estate agent when doing so. There are many scam artists in Hawaii when it comes to selling property.
As you can imagine, the amount it costs to buy a house in the Hawaiian Islands can be extravagant. The high touristy and business islands like Oahu, Hawaii and Maui can demand some pretty big money for homes. The less populated islands with little tourist industry can have more affordable housing markets but you may be giving up some of the amenities you’re used to when moving there.
Be sure to stay within your price limits and don’t over pay for a home that does not meet your needs or is more than you need . Be patient and keep looking until you find that perfect home that suits you.