Service Member buying a home In Hawaii

[Jared M Pilarski]

Good Morning everyone

I am going to be moving to Hawaii, courtesy of the military, in the near future and I will be living on the Honolulu Island.

I have been looking to buy a house as my pay allowance for housing is 2700 a month and I figured this could go to great use instead of rent. 

I can easily afford the mortgage payments on most houses I am looking at, but the biggest issue I am finding is HOA fees.

Most HOA fees on decent houses are 400+. I am also wondering if I move, will the income I receive from a tennet will cover the costs for the HOA fee and the mortgage its self.

I didn't know if there's anyone who has experience buying and renting a house in Hawaii that could help guide me in the right direction. 

[Doug Nordman]

In general, Jared, Oahu real estate is fully priced and doesn’t meet the 1% thumbrule for investment properties. As you’ve noted, $2700 seems like a lot of housing allowance until you start shopping.

Waipio Gentry and Mililani single-family homes have low HOA fees. (Townhomes and condo developments in those neighborhoods, though, still have higher fees.) If you're stationed at Schofield Barracks then that's a reasonable commute.

On a military housing allowance, the easiest and least-risky way to invest in Hawaii real estate is to house-hack with roommates. If you want to invest in more rental properties with your excess BAH then I’d suggest looking anywhere else on the Mainland where the 1% thumbrule works (at least a 6% capitalization rate)-- and where your invested dollars will go a lot further.

On the other side of buying a home in Hawaii while you’re on active duty, I get many unhappy e-mails and other comments from people who’ve bought here and then can’t cover the sales expenses. When they inevitably transfer off the island, they’re not able to cover all of the landlording expenses either.

House-hack here and buy elsewhere.