The Aloha State: The Top Tips for Buying Property in Hawaii
Living in Hawaii is like a dream come true.
Beautiful sandy beaches. Tropical trees and warm sunny days. Wouldn’t it be heaven to live on the islands?
It’s no wonder that Hawaii real estate is highly competitive with a low inventory. Buying property in Hawaii can be challenging, but it’s not impossible. Plus, knowing you get to spend your free time basking by the ocean. Why wouldn’t you want to live here?
Continue reading for some top tips for buying property in Hawaii.
1. Urban or Rural Islands?
Hawaii offers some of the most beautiful properties in the world. There are a variety of islands and locations to choose from. It all depends on your personal preference.
Some islands offer larger homes and more land. While other islands offer properties that have the convenience of being near a bustling urban life. If you opt for an oceanside property it might mean a longer commute to work.
However, a house closer to the city could mean less beach time and no view of the sunset on the water. You will have to weigh your priorities when choosing what works best for you.
There are also a wide variety of architectural designs to choose from. Modern styles as well as architecture unique to Hawaii itself. Check out all the new construction Hawaii has to offer!
2. Find Loan Programs You Qualify for
When you are considering loan programs, it’s important to do your research on what you are eligible for. If you are a veteran or active duty military member, then you are eligible for the Veteran’s Administration (VA) Benefit loan program.
There are also USDA and FHA loan programs if you plan on minimizing your initial cash investment. Currently, there are great conditions in the market for buying property in Hawaii. The loan interest rates are holding steady. These are great ways to make your Hawaii home a reality.
So grab your pay stubs, tax returns, and VA documentation where applicable and let’s get you that dream home!
3. Budget Your Loan Payments
Before you can jump into even looking at homes in Hawaii, you should first sit down and determine what you can afford. Budget your monthly expenditures to see how much you’d be willing to pay for your loan.
Once you determine how much you can pay, you should then meet with a licensed Hawaii mortgage broker. Share with them the amount you are willing to spend each month and then determine what that translates to as far as cost.
Do some research on your own about what loan options are available. As soon as you choose a loan, you must get prequalified as soon as possible. If you start looking before you are preapproved for a loan, you most likely will lose the home to other buyers.
The Hawaii house market moves too quickly for a seller to wait. Make sure you take care of the financial side of things before searching. This will not only give you a better chance of snatching up your house but also give you a better understanding of how much loan payments will be ahead of time.
4. Find Your Lender
When searching for a lender, make sure they are a Hawaii-based company. This will ensure that the underwriting and valuation align with the area’s unique properties. They will have a better understanding of the market and how the pricing of Hawaiian homes work.
In Hawaii, there aren’t neighborhoods of identical homes that are all priced the same. So it can be harder for a mainland lender to understand the listing prices. This could cause you to close late once you find your home.
Fee Simple vs. Leasehold
There are some things to consider when you are looking for a home, including the property. In Hawaii, property ownership can either be fee simple or leasehold. In the case of fee simple, the buyer owns the property completely and can make changes to the land.
Leasehold property ownership only lasts for as long as the lease lasts. It’s basically renting the land. It’s important to know the difference when looking at properties because the financing of each type of property is different.
Shorter leases can affect the overall eligibility of 30-year mortgages and can also result in a higher monthly payment.
5. Should You Hire Your Own Real Estate Agent?
When purchasing a home in Hawaii, there are pros and cons to hiring your own real estate agent. Many times buyers will simply hire the listing agent of the home because it tends to be easier and cheaper. In some parts of Hawaii, listing agents are required to attend house showings.
There are also good reasons to have your own representation when buying a home. If you live on the continental U.S., then purchasing a home as far as Hawaii might be trickier. You may need to rely on your agent more than in other circumstances.
6. Condominiums in Hawaii
If you’re more interested in condo life in Hawaii, then you should research the specific financing requirements. Before you can get a government-backed loan, you have to show that your owner-occupancy requirements are met. Lenders prefer that owners will be living in the condos as oppose to renters.
Plus, many Homeowner Associations (HOA) have strict rules about pets and other restrictions. Still, there are many benefits to having maintenance and upkeep taken care of by the HOA. Just be sure you are aware of the expectations.
Buying Property in Hawaii
Ready to find your dream home on a tropical island getaway? We thought so. With the limited amount of land available for construction, finding your perfect Hawaiian home might take some searching.
Figure out what neighborhoods interest you as well as your price range. Many islanders like to live where they play. They spend their weekend hiking, surfing, diving, or taking walks on the beaches. Find the location that works for you and then act fast.
With these tips, you can get started on your search. Discover why so many are migrating to become islanders at this hot vacation spot.
Do you plan on buying property in Hawaii? Have some advice on choosing a home? Share your thoughts in the comments below.