Buying A House In Hawaii - 7 Things You NEED To Know FIRST!

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The Hawaii Real Estate market has been BOOMING for the last couple of years. The United States as a whole felt the boom of the seller’s market and Hawaii was no different in that aspect. But buying a house in Hawaii is different than most other places. Learn more about these 7 IMPORTANT things you NEED to know when buying a home in Hawaii.

1. Cost Of Living In Hawaii

The Cost of living in Hawaii is higher than most other cities and that's no secret. This is obviously something you should be factoring in when it comes to moving to Hawaii and buying a house. we're going to be talking about the cost of homes but just know that in general daily life your dollar just does not go as far.


The median single-family home price I'll be home here in Honolulu Hawaii is now over $1,000,000 as of 2022.


Now Does that mean that you have to pay a million dollars to buy a house in Hawaii?




That Is a common misconception when people see the data posted on social media or wherever it is they like to get their information. There are plenty of homes for sale in Hawaii that are less than 1 million dollars.


We actually like to talk about when it comes to home price is your ideal monthly housing budget.  We then reverse engineer the ideal monthly housing budget, along with your home criteria, to find homes in your preferred communities that meet your needs.


Now this always fluctuates as interest rates change with the Wind but if you say I want to stay around a $3,500 a month housing budget, this may equate to approximately a $600,000 home purchase. There are a ton of variables that come into play so these are not exact figures and we highly recommend you getting on a call with our team to discuss more about your ideal monthly budget and what that may translate into in terms of  buying a house in Hawaii.

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2. What is Fee Simple vs Leasehold in Hawaii?

Fee simple and leasehold are two terms that are very unique to buying a house in Hawaii and you don't hear in many other places. Before we break these two down, I wanted to let you know where you can find them when you're looking at homes for sale in Hawaii. 


When you see a home  for sale you're going to want to check the land tenure. This is where it may say fee simple (FS) or leasehold (LS). This is going to be important later


Fee Simple is essentially what you would think buying a house in Hawaii is, complete and total land and structure ownership.


With Fee Simple you have rights to the land all the way to the earth's inner core, all the improvements on the land (your house, fence, and everything else), as well as air rights. 


Sounds like normal home ownership right?


Leasehold, in its simplest terms, means you are only purchasing the structure. You do not have rights to the land.


Think about it in terms of the word itself. Lease. Someone else owns the fee and they are renting the structure on the land to leasehold owners. 


This is very common to see for condos in Waikiki for example.


 So what happens when the lease ends?


When the lease ends there's a few things that could happen.  the first we have to talk about it  if the lease ends. period.


The lease may not come to an end because they already have renegotiation dates set and are already in talks of renewing the lease for another 10, 20, 30 years, whichever they agree upon. 


Another thing that could potentially happen is the fee owner makes the fee available for purchase to the leasehold owners. When this happens sometimes you will see a condo building where some of the units are few simple and some of the units are leasehold. That would indicate this scenario.


Now if the lease ends out right and the fee is not made available for purchase, and the lease isn't renegotiated, then leasehold owners essentially lose out on their ownership.  sounds crazy right?


This Is something that is more common for investors but depending on the time left in the lease and at the dollars make sense it could be a very fruitful investment.

The majority of people buying a house in Hawaii are looking for fee simple homes.


So if you see a  home that has a too good to be true price always check your land tenure first. More often than not that home is going to be a leasehold.

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3. Homeowners Associations In Hawaii And Their Fees

Homeowners associations in Hawaii can be pretty expensive. this is something that can play a huge Factor in terms of your ideal monthly housing budget but also your  loan qualification.


Now when we say homeowners associations and their fees we are talking about the actual homeowners association fee plus what is considered the maintenance fee. we typically umbrella these all together when we say HOA fees.


When it comes to single family homes we typically HOA fees less than $200 a month. but this is always something that is community dependent so always double-check  when searching for homes. 


Condos and townhome communities are where we start to see  HOA fees really get more expensive and impact your budget.


 it is not uncommon to see these in townhome communities upwards of $500 a month.


And For condos around the island it is not uncommon to see fees upwards of $800 a month.


Now why are fees in condos and Townhomes so much more expensive?


Typically condos and townhome communities offer more than some single-family home communities. For instance having a community pool, area beautification, Community Center, and what is called an ho6 insurance policy that covers everything from the walls out of the structure. 


You may also find that some of your utilities are included in the monthly fees. Now this is not all the time but utilities that are common to see included in the fees are sewer and water. What that means is you will not have a separate water and sewer bill. That is included into the HOA fees regardless of how much you use. 


So when you're searching homes a lot of your favorite home search websites will show you the fever will not always tell you what encompasses that fee. When working with our team we will always show you the back end MLS of what is listed to include those fees.

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4. How Much Do Homes In Hawaii Appreciate?

Hawaii real estate has proven time and time again to be a very fruitful investment. whether you're planting roots or buying an investment property you can expect your home value to appreciate.


Homes in Hawaii are somewhat insulated from a lot of what happens in mainland housing markets. Does that mean that we don't have Market crashes? Absolutely not!


But We are in a very unique situation in that we are on an island, and we only have so much land. They're not making any more of it. 


What you're really paying for is location.


Over the last 30 years data shows that homes typically appreciate approximately 5% every year. 


Of course there are variables that play a factor such as size, location and condition but know the 5% is what is typically expected, Market dependent.


5. What Are The Landlord-Tenant Laws In Hawaii?

We're not going to do a serious Deep dive into the landlord tenant laws. we are not Attorneys oh, we are real estate agents. and for those reasons we wanted to leave you a link to this PDF document from http://Hawaii.Gov.


There are a couple things that you should know when it comes to the landlord tenant laws in Hawaii.


  1. Hawaii is considered to be a more tenant friendly state then a landlord friendly state in terms of favorable terms of a lease agreement and laws for the tenants.
  2. If you are considering your property a long-term investment vehicle and wanting to rent it out  then you'll  be paying taxes on the income you make from that property.
  3. If you decide to leave the state and rent out your property  you need to appoint somebody as a caretaker of that property. you can decide if that's just someone you know or a property management company but this is something that you do have to do. I don't know why that keeps happening


Those are just a few items of note. Again, please refer to the PDF document in the link above for a more thorough and detailed look into the landlord-tenant laws of Hawaii.

6. Should I Pay For A Home Inspection When Buying A House In Hawaii?

Oftentimes people buying a home think about doing things the cheapest way or cutting corners on cost. When you're purchasing a home in Hawaii this is not a cost we recommend cutting a corner on.


Let's present this scenario to you…


You're buying a house in Hawaii and you decide to waive your inspection period in your purchase contract and save yourself $500.


You make it all the way to the closing table, the purchase is recorded, the title is in your name oh, and you now have the keys to your new home. Then 1 week later the ceiling collapses in your kitchen which is located directly beneath the upstairs bathroom due to a slow leak that has been building up for months and finally became too much for the ceiling. 


 What if this catastrophe could have been avoided by spending $500 on a home inspection?


This example has happened in real life on many occasions and could be prevented if the buyer of the home had a good home inspector conduct a thorough inspection of their new home and noticed the slow drip leak in the ceiling with their cool infrared scanner tool.


That being said, we always always always highly recommend having your potential new home inspected by a licensed home inspector.


If this leak was found by the home inspector that would then leave you with options during your due diligence period. Depending on the style of the home this would leave you with options such as:

  1.  Negotiating a credit at closing for the repairs
  2.  Negotiating the seller text these repairs before closing
  3.  Completely backing out of the contract with no penalties because you are in your due diligence period.


Think of it as money towards your investment that is protecting your massive investment.

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7. How Long Does It Take To Buy A House In Hawaii?

We've already mentioned that buying a house in Hawaii is a very unique process compared to a lot of other cities in the United States. You might have also heard that Hawaii does things just a little bit slower of a pace then most places.


That being said, it depends on a few things like how the transaction is being funded, the property being vacant or tenant occupied, the loan product to the buyer is using (if at all),  If the sellers need time to transition out of the home and into their new home, and many other situations.


For a typical transaction with the buyer being funded with a loan like conventional or VA home loan you can expect a 30 day escrow period. 


Again this is not a one-size-fits-all approach. Everyone's situation and circumstances are different and when you work with our team we're there with you every step of the way making sure you know everything that is going on at every turn in the transaction.

Buying A House In Hawaii

Buying a house in Hawaii is so unique and unlike any other place to live in the United States. Whether you’re a single, working class individual or a family looking for that special spot to call home. If you have more questionsAbout buying a house in Hawaii don’t hesitate to reach out to us. We talk to so many people about their move to Hawaii every single day and we absolutely love it. We’re here when you need us!


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ryan strong, ryan strong oahu real estate agent, veteran real estate agent in oahu

Ryan Strong

Aloha! I’m Ryan!

I was fortunate as a child to have the opportunity to move to Hawaii at a young age due to my parents being in the military. I now have spent more of my life here on the island of Oahu than anywhere else. Hawaii is my home! I talk to so many people who are either thinking about it or are already making the move to Hawaii and I ABSOLUTELY LOVE IT! You can reach out too. Shoot me a text, give me a call or send me an email. However you want to get in touch with me, I’ve got your back when moving to Hawaii!



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