VA Home Loan in Hawaii

[Roger Ledoux]

I've been preapproved for a $516K VA Loan, which is the entitlement I had left, to purchase a home in Honolulu. For this amount, my options are pretty much condos/townhomes in good neighborhoods. I could probably buy a single family, but it would be in the not so desirable areas like Kalihi or the far west side of Oahu. My plan is to use this VA benefit to purchase something I can rent out in a few years because I plan on buying a single family home. I was thinking of making my max budget $450K, which will make my PITI and maintenance fee around $2500-$2700. The problem is I have no idea if these places will rent out for that much. I guess I have to do more research. If I do a loan for the max amount of $516K, my payments will be over $3K a month and I don't think anyone's renting for that much. I would appreciate any advice you all can offer to help me make a better decision. I need at least 3 bed/2 bath place. My mother and teenage sister will be moving in with us as well, so that'll be 6 people total living in the townhome.

[Bj Carvalho]

Roger,

Depending on what you buy, and like you said, where you buy...$3k/mo rent is absolutely attainable.  Currently, we rent our 3/3/2 house (but it's 2000 sq.ft.) in Pearl City for $2900 + utilities (we lowered to keep tenants, they've been there going on 2 years now).  The military folks make crazy money on BAH for Hawaii...so its possible.  My house is appraised in the mid $700s too...and not really anything special so ~$500k budget may not get you there, but hey...even blind squirrels find nuts right?...there isn't anything saying you can't wait for prices to drop and rent first to get a feel of the market (if you're going to live here).

Some folks also enter the market to take a small hit monthly (rent vs. mortgage) in order to take advantage of the decent appreciation rates Hawaii has to offer...but that's a long game strategy and not everyone has that capability.

Section 8/HUD vouchers will vary, but are rather hefty for Hawaii too, should you choose that route as well. Hit up Craigslist and see what's renting and in what locations to get feel of market prices.

Good luck on your hunt!

BJ