A Guide to Real Estate Investment in the Big Island of Hawaii

Buying the perfect home in Hawaii is not as easy as buying a home in the Midwest. Hawaii real estate is most prized among real estates in all of America. The gorgeous views of the mountains, the jungles and the oceans along with landscape dotted with beautiful palm trees make it a truly beautiful place. This article will be a perfect guide for someone who is thinking of buying real estate in the tropical paradise of Hawaii.

Before you approach a real estate agent have a clear idea of what you want. Think of how big you want your house to be in terms of square footage and the size of the lot. Consider whether you want a brand new one or an older one would suffice. How many bedrooms, bathrooms would it have and how big would the living room be? If you are thinking of a new home, construction is an important factor to consider. Then you can think about the location where you want your dream home to be. You could have it in the wet side or dry side of the island with a view of the ocean or the mountains. If you are thinking of living closer to the major cities then you should have a higher budget because both houses and land is costly there. Finally you should decide whether you want a Fee Simple or Leasehold property.

To get a clear idea of what you want you should have some knowledge about the climate in the islands of Hawaii. The eastern side of the island which is known as Hilo is the wet part of the island. It is lush green and very humid having around 140 inches of rain per year. Kona is the dry desert like western part having barely 15 inches of rainfall in a year. If you are planning to live in an elevated area then remember it could get chilly in both days and nights and your home could require a wood burning stove.

Houses and land near big cities are costly. Moreover in such cities you will have less privacy and sometimes traffic can be a real pain. So if you want to live near the big cities like Hilo or Kona, you need to compromise on such factors. On the other hand rural areas are much quieter and you will enjoy country living at its best. But living in rural areas has its disadvantages because some facilities may not be within your reach. To go to the market you may have to drive at least 20 miles and medical facilities could be more than 40 miles away.

Well there are two popular methods of house construction in Hawaii. In the traditional post and pier method the house is raised up above the ground as if it was on stilts. The logic behind this is that it keeps the house cooler since the Trade Winds blow the heat away from under the house. At the same type it keeps vermin and pests away from your home. However with this type of construction you may loose your house in a hurricane since it is not anchored to the ground. But don’t worry as hurricanes are really very rare in Hawaii. The newer method of construction is the slab and footing construction but the downside of this method is cooling. If you are planning to live in the chilly highlands then you should prefer this type of construction since the concrete slabs remain warm and can help in heating the house.

You can pay for your house in both Fee Simple and Leasehold modes of payment. In a Fee Simple house you own both the house as well as the land on which the house is built. In case of Leasehold you just own the house but not the land and you will have to pay the landowner regular lease payments. Leasehold houses are less costly than Fee Simple property. You could initially negotiate and buy a Leasehold house for yourself and then move up to a Fee Simple house in a few years. But remember it would be at times difficult to get a good return when you sell a Leasehold house.

While purchasing a house the best advice would be to stay within your limits. Do not buy a house that you cannot afford since you may be forced to resell it later. Houses having a mountain view are much less expensive than the houses having an ocean view. Hawaii homes are traditionally smaller in size and a house in a affordable price range would have 800-1200 sq ft. Large estates are a bit harder to find but don’t worry any good estate agent will gladly find one suited for you.

If you are buying an older home you should get the house inspected. Make sure the house is termite free. Also ensure that it is connected to the electricity grid, to the city water system and to the city sewerage system. If you are not connected to the water system then you should have a large water storage tank to hold rainwater. Most important is that before you purchase a house ask for the permit documents of the house. A lot of houses in Hawaii have been built without permits and non permitted structures are illegal and at the same time could be unsafe.

Insuring your house properly can be quite a handful in Hawaii. The United States Geological Service has divided the area into 6 zones depending on volcanic activity in the region. The areas in zone 1 are likely to see more lava flow than the areas in zone 6. The cost of your insurance depends on which zone you are in. Mortgage for your home can also be tricky since you won’t get a mortgage from most lenders if you are in the first or second zone. Probably the only way is to get a mortgage from a bank in Hawaii where the APR will be 0 .25 to 0.5 % higher and another 1% maybe added to your APR if you are in zone 1 or 2.

Before purchasing the house you should also know the details about the land laws in Hawaii. The Hawaiian government usually allows the land to be leased for 99 years initially which can be extended later. Native Hawaiians can get the lease for a paltry sum of around $1 per year. To qualify as a native at least one side of your family should have the blood of the native races living in Hawaii before 1778 and usually birth certificates are taken as valid proof. Once native Hawaiians find a good home they can easily extend the lease and pass their homes to their children and grandchildren. Natives are also entitled to various benefits like exemption from property and land tax as well as low interest government and home equity loans.

The beaches in Hawaii are breathtaking and most of them are accessible to the general public. Finding a friendly area for your family on the shoreline can be quite easy. You can greet anyone in Hawaii by saying Aloha which means hello and mix with the crowd easily. A very easy way of pronouncing words in Hawaiian language is to emphasize on the vowels of every word.

If you are planning to move to Hawaii you should familiarize yourself with the communities and neighborhoods and the cost of living there. Hawaii like all other states in America faces the same social and economical problems. Before you choose a house it is best if you have complete details about the safety, reputation and economic stability of the surrounding neighborhood. Also take note of the number of houses and apartments present in the neighborhood. If there are more apartments it means that the people living in the neighborhood will change constantly as new tenants will move in if the older ones leave.

Even if you have found an affordable house in Hawaii you should always remember that the cost of living in Hawaii is pretty high. This is due to the fact that most of the consumer goods in Hawaii have to be imported from the mainland. The densely populated areas in Hawaii have a good public transport system and plenty of taxis but for people with private vehicles the cost could be quite high as fuel does not come cheap in Hawaii.

Relocating your pets could be quite a problem in Hawaii due to the states concern over diseases like rabies and conservation of the local ecosystem. Previously the state required that your pet be in strict quarantine for 4 months after entry into the state but now only a short quarantine of 5 days is necessary. But keep in mind that you cannot have pets like ferrets, snakes, hermit crabs or hamsters as pets in Hawaii.

If you are buying a completely furnished house then you can pack lightly and just easily ship your clothing and personal belongings to your new residence. But shipping furniture and everything else to Hawaii can be an expensive proposition. Shipping your current automobile to Hawaii can cost you around 1000$. 

Relocating to the Island of Hawaii is a great experience. So now that you are geared up with adequate knowledge of buying real estate property in the Island of Hawaii, you can interview the real estate agents. Understanding your own requirements is very important. Have a clear idea of what you want and how much you can afford. With proper inputs from you, the real estate agents will be able to locate the right property for you in lesser time.  

The pristine beauty of the Island lives up to the expectation and a planned trip will make it more economical. It is a lovely place to settle down as the climate is very optimal throughout the year. If you are going for the first time, it is best to book tickets at least 3 – 4 months in advance to get better deals. In order to explore the place and its real estate or housing projects, you would have to stay in some hotel for a few days. You have a varied choice on accommodation ranging from resorts, condominiums, hotels to vacation rental homes and cottages. While a decent accommodation can cost you anything between $300 and $600, it can go higher depending upon your choice.