house, Condo or Land???
“The Ultimate Guide to Buying on the Big Island of Hawaii: House, Condo, or Vacant Land” provides a comprehensive look into the diverse real estate opportunities available on the Big Island. The blog starts by exploring the rich tapestry of communities and lifestyles in different regions – from the bustling hub of Kailua-Kona to the serene calm of Hawi, and from the country charm of Captain Cook to the affordability of Puna and Hilo.
It further delves into the distinct characteristics and nuances of owning a house, a condo, or vacant land. Houses offer low tax rates, acreage, and freedom, along with diverse architectural styles and amenities. Condos provide a community lifestyle, complete with Homeowner Association benefits and vacation rental prospects.
Vacant land, on the other hand, presents a canvas of opportunities, from designing your dream property to long-term investment, albeit with uncertainties tied to permit approvals and construction.
The blog underscores the importance of understanding local regulations, especially when investing in vacant land. It also highlights the value of hiring a local contractor who is well-versed with the Big Island’s unique building codes and land-use laws.
A heartwarming closing note inspires readers to embark on the journey of finding their dream property on the Big Island – guided not just by facts and figures, but also by their instincts and the call of the island.
If you have any questions or would like to see some homes, condos or parcels of land in person, please feel free to contact us here at the Papakea Collection any time, (808) 209-9906.
Houses
Buying a house on the Big Island
Owning a house on the Big Island can be a dream come true, embodying the quintessential Hawaiian lifestyle. Let’s dive into the pros and cons:
Pros of Buying a House on the Big Island
Space and Privacy: Houses often come with more space — both indoor and outdoor. They provide more privacy than condominiums as you’re not sharing walls with your neighbors.
Freedom to Customize: Depending on the neighborhood’s covenants, conditions, and restrictions (CC&Rs), owning a house generally gives you the freedom to make modifications. You can paint walls, change landscaping, or renovate to match your lifestyle and tastes.
Lower Property Taxes: Compared to many mainland locations, Hawaii has one of the lowest property tax rates in the U.S. This can make home ownership more affordable over the long term.
Potential for Acreage: Houses on the Big Island often come with larger land parcels compared to many other places. This offers a sense of open space, potential for gardening or farming, and room for pets or children to roam.
Cons of Buying a House on the Big Island
Maintenance Responsibilities: As a homeowner, all maintenance and repairs fall on you. This includes everything from fixing appliances to landscaping. These chores can take up time and add unexpected costs.
Higher Upfront Costs: Generally, houses are more expensive than condos or townhomes. This means they require a larger down payment and can carry higher monthly mortgage payments.
Potential for Stringent CC&Rs: Some residential communities on the Big Island have strict CC&Rs that might limit what you can do with your property, from house color to the type of landscaping allowed.
The decision to buy a house on the Big Island is a significant one, influenced by your lifestyle, budget, and long-term goals. A local real estate professional can provide invaluable guidance, helping you navigate the market to find a home that’s just right for you.
Home styles and infastructure
The Big Island is rich in architectural diversity, a testament to its varied history and the creativity of its inhabitants. Here are some of the unique home styles you might find:
Coffee Plantation Homes: These charming homes are remnants of the island’s coffee farming history. They often feature single-wall construction and a layout that encourages natural ventilation. While they can be older and may need updates, these homes are loved for their character and connection to the island’s past.
HPM Kit Homes: HPM Building Supply, a local company, offers a variety of home kits. These provide a more affordable and straightforward approach to home construction. With various models to choose from, homeowners can select a design that fits their style and needs.
Custom Homes: The Big Island is also home to numerous custom houses, from luxury beachfront estates to eco-friendly retreats in the rainforest. These homes are designed to make the most of the island’s stunning landscapes and feature high-end finishes and unique architectural details.
Along with architecture, it’s crucial to consider a property’s access to utilities:
Water: Many homes are connected to county water, but in more rural areas, properties may rely on catchment systems that collect rainwater. While catchment systems can be very efficient, they require maintenance, and potential homebuyers should ensure the system is well cared for.
Electricity: Most areas have access to grid electricity, but some remote properties may rely on solar power or generators. If considering a home off the grid, it’s essential to understand the maintenance and reliability of these systems.
Cable/Internet: Connectivity varies across the island. While urban areas typically have access to cable and high-speed internet, service can be more limited or inconsistent in rural areas.
When buying a house on the Big Island, it’s essential to consider both the home’s style and its infrastructure. A local real estate expert can provide invaluable guidance, helping you find a property that matches your lifestyle, comfort, and aesthetic preferences.
Hosted Vacation Rentals on the Big Island
The Big Island’s appeal as a world-class destination means that vacation rentals can be an attractive option for homeowners. These rentals can provide a stream of income to offset mortgage costs and can be a savvy investment if managed correctly. However, it’s essential to be aware of the local laws and regulations, which can change and vary from one area to another.
A hosted vacation rental typically means that the property owner resides on-site while renting out a portion of their home or a separate dwelling on their property to visitors. This type of rental often fosters a more personalized and authentic experience for travelers.
However, the rules governing vacation rentals on the Big Island have been in flux, with stricter regulations introduced in recent years. In 2019, Bill 108 was passed, significantly affecting short-term vacation rentals on the island. This bill established a framework for regulating rentals and required existing rentals to register and meet certain standards.
The law’s specifics can vary by district and whether the area is zoned for short-term rentals. In some residential zones, short-term rentals are not allowed unless they were established before the bill’s enactment and registered accordingly. However, in hotel and resort zones, vacation rentals are generally permitted.
It’s crucial to understand the zoning laws of the area where you intend to buy and how they may affect your ability to operate a hosted vacation rental. It’s also a good idea to stay informed about any potential changes to these regulations.
If you’re considering purchasing a property with the intent to rent it out as a vacation rental, consult with a knowledgeable local real estate agent and a lawyer. They can guide you through the current regulations and help you understand the potential impacts and opportunities of a vacation rental property.
Remember, while the rental income can provide some relief from a high mortgage, running a vacation rental also comes with responsibilities and costs, including maintenance, taxes, and providing a positive experience for your guests. It’s important to go into it well-informed and prepared for the commitment.
Condominiums
Condominiums On The Big Island
Condominium living can be an ideal option for those who prioritize convenience, social opportunities, and a more carefree lifestyle. Let’s explore some of the pros and cons of owning a condo on the Big Island:
Pros of Buying a Condo on the Big Island
Less Maintenance: When you own a condo, the Homeowners Association (HOA) usually handles the maintenance of common areas, building exteriors, and landscapes. This means less time spent on chores and more time enjoying island life.
Amenities: Many condominium complexes come with a range of amenities such as pools, fitness centers, tennis courts, and barbecue areas that you might not have with a single-family home.
Community Living: Living in close proximity to your neighbors can foster a strong sense of community. Many condos also organize social events, which can be an excellent way to meet people.
Potential for Vacation Rentals: If the condominium is located in a designated “vacation zone,” you may have the opportunity to rent out your unit when you’re not using it. This can help offset the costs of ownership.
Cons of Buying a Condo on the Big Island
HOA Fees: HOA fees can be quite substantial, and they’re an additional monthly cost on top of your mortgage. It’s crucial to factor these into your budget when considering a condo purchase.
Less Privacy: Since you’re sharing walls and common areas with your neighbors, there’s typically less privacy than you would have in a single-family home.
Potential Rental Restrictions: While some condos allow vacation rentals, others have restrictions on short-term rentals. Make sure to check the HOA rules before purchasing if you plan to rent out your unit.
Less Control: The HOA makes decisions about maintenance, improvements, and changes to the building and common areas. As a result, you have less control over these aspects compared to owning a single-family home.
Buying a condominium on the Big Island can be an excellent choice depending on your lifestyle and goals. As always, it’s advisable to consult with a real estate professional who understands the local market and can guide you through the process.
Understanding Condo Fees and Maintenance Fees
When you purchase a condo, one of the ongoing expenses you’ll need to account for is the condo or maintenance fee. This fee is collected by the Homeowners Association (HOA) and used to cover a range of services and expenses related to the upkeep and administration of the condominium complex. The amount you’ll pay can vary widely depending on the location, size of your unit, amenities offered, and the specific costs incurred by the HOA.
Typically, condo or maintenance fees cover the following:
Common Area Maintenance and Repairs: This includes cleaning and maintenance of shared spaces like hallways, lobbies, elevators, parking garages, and outdoor spaces. It also covers repairs to these areas, as well as larger structural elements of the building like the roof and exterior walls.
Amenities: If your condo complex offers amenities like a pool, fitness center, clubhouse, or tennis courts, the upkeep of these facilities is usually covered by your condo fee. This can include cleaning, maintenance, repairs, and any staffing costs associated with these amenities.
Landscaping and Groundskeeping: The regular upkeep of outdoor areas, such as lawn mowing, tree trimming, and flower bed maintenance, is typically included. In areas that see a lot of rainfall or have extensive green spaces, this can be a significant portion of the budget.
Utilities: In some cases, utilities like water, sewer, garbage collection, and even cable or internet may be included in your condo fees.
Insurance: The condo fee usually includes a portion of the insurance coverage for the building and common areas. However, you’ll still need to have your own policy to cover your personal belongings and any improvements you make to your unit.
Reserve Fund Contributions: A portion of your condo fee typically goes into a reserve fund. This fund is used for larger, unexpected expenses or major projects like replacing the roof or renovating the lobby.
Before purchasing a condo, it’s important to understand what the condo fee includes and to factor this cost into your monthly budget. It’s also a good idea to ask about the condo’s reserve fund. A healthy reserve fund is a good indication that the condo is well-managed and prepared for future expenses.
Remember, these fees can increase over time to accommodate rising costs, so it’s important to consider future affordability as well. A real estate professional or legal advisor can help you understand the specific condo documents and what your fees will cover.
The Importance of Condominium Documents
Before purchasing a condominium, it’s crucial to thoroughly review the condominium documents, sometimes referred to as the Condo Docs or Covenants, Conditions, and Restrictions (CC&Rs). These documents outline the rules and regulations governing the condominium complex, as well as your rights and responsibilities as a unit owner.
Here are some key areas you should pay attention to:
House Rules: These rules govern the daily living in the condo complex. They might include guidelines on noise levels, pet ownership, parking, use of amenities, and more. Violating these rules can lead to fines or other penalties. Understanding the house rules before purchasing can help ensure the condo lifestyle will be a good fit for you.
Financial Health of the HOA: The condo documents should provide information on the HOA’s finances, including its budget, reserve funds, and any outstanding debts or upcoming large expenditures. A well-funded reserve and balanced budget are signs of a well-run HOA.
Meeting Minutes: Reviewing past meeting minutes can give you a sense of any ongoing issues in the complex, potential upcoming maintenance or renovations, and how effectively the HOA is managed.
Rental Policies: If you’re planning on renting out your unit, either long-term or as a vacation rental, you’ll need to understand the condo’s rental policies. Some condos restrict rentals entirely, while others might have rules about the minimum rental period or require that rentals be approved by the HOA.
Insurance: The condo documents should outline what the HOA’s insurance covers and what you’ll be responsible for insuring as a unit owner.
Assessments: In addition to regular condo fees, the HOA can levy special assessments for large, unexpected expenses or major projects. Understanding how assessments are decided and what recent assessments have been levied can help you gauge potential future costs.
Reviewing these documents can be a complex task, and it’s a good idea to involve a real estate attorney or other professional who can help you understand their implications. Making sure you are comfortable with all aspects of the condominium’s governance, financial health, and rules before you buy can help prevent surprises and ensure you’re making a sound investment.
vacant Land
Investing in Vacant Land on the Big Island
Purchasing vacant land offers unique opportunities and challenges compared to buying developed property. Let’s delve into some of the pros and cons of investing in vacant land on the Big Island:
Pros of Buying Vacant Land
Flexibility and Freedom: With vacant land, you have the freedom to design and build a property to your specifications. You can plan every detail from the ground up to create your ideal living or business space.
Lower Initial Cost: Vacant land often has a lower upfront cost compared to developed properties. This can be an advantage if you’re on a budget or looking for a long-term investment.
Long-Term Appreciation: Over time, land in desirable locations can appreciate in value, making it a potentially profitable investment.
Lower Taxes: In some areas, vacant land is taxed at a lower rate than residential property, which could mean lower carrying costs.
Cons of Buying Vacant Land
Uncertain Timelines: The process of obtaining permits to build on vacant land can be lengthy and unpredictable. It’s also necessary to factor in the time for designing and constructing the buildings.
Initial Development Costs: While the initial purchase price might be lower, developing vacant land can be costly. Expenses can include clearing the land, constructing buildings, and installing utilities, roads, and other infrastructure.
Conservation Zones and Restrictions: Hawaii has strict land use laws, and certain zones are protected from development to preserve natural resources and cultural heritage. It’s crucial to understand what zone the land is in and what restrictions apply.
Maintenance and Upkeep: Even if you’re not ready to develop, vacant land requires some level of maintenance to prevent overgrowth and deal with potential issues like erosion or pests.
Investing in vacant land requires careful planning and consideration. It’s essential to thoroughly research the land, including its zoning, the cost of development, and potential future uses. Consulting with a local real estate professional and other experts like land surveyors and attorneys can provide valuable insight and help you avoid potential pitfalls.
The Importance of Using a Contractor in Hawaii
Developing a piece of vacant land in Hawaii isn’t a task to be taken lightly, especially if you’re not an experienced builder. The process can involve various complexities due to unique regulations and laws specific to the Big Island. In such scenarios, hiring a reputable local contractor can be a wise investment. Here’s why:
Knowledge of Local Regulations: Hawaii has stringent building codes and land-use laws designed to protect the environment and maintain the unique cultural heritage of the islands. These laws can affect everything from where you can build on a property to what materials you can use. Local contractors have in-depth knowledge of these regulations and how to navigate them. They can help ensure your project is compliant, saving you potential fines and the hassle of rework.
Understanding of Local Conditions: The Big Island has diverse geographical and climatic conditions. This can affect various aspects of a building project, from the kind of foundation required to the best materials to use to resist weather conditions. Local contractors have a deep understanding of these issues and can guide decisions that will ensure the durability and safety of your construction.
Experience with the Permit Process: Obtaining the necessary building permits can be a complex and time-consuming process. Experienced contractors are familiar with the process, the documentation required, and how to expedite approval. This can help avoid delays and get your project off the ground more quickly.
Quality and Safety: Contractors have the necessary training and experience to ensure a construction project is done correctly and safely. They can oversee the project from start to finish, managing all aspects of construction and ensuring quality control.
Warranty and Liability: Professional contractors usually provide a warranty for their work and carry liability insurance, offering protection if something goes wrong during the construction process.
Investing in a professional contractor can be an essential factor in a successful building project. It’s always a good idea to check a contractor’s references, verify their license and insurance, and get a clear, written contract before work begins.
papakeacollection
June 20, 2023Builder-Unfriendly Zones and Leasehold Land
While the Big Island offers various opportunities for building your dream home or commercial space, not all land is considered builder-friendly due to several restrictions and unique situations.
For instance, certain conservation zones, such as those in protected watershed areas or habitats of endangered species, have strict development regulations designed to preserve the natural environment. Similarly, land within certain lava zones may carry higher risk and additional building requirements due to the potential for volcanic activity.
Furthermore, potential land buyers should be aware of the distinction between Fee Simple and Leasehold land. Leasehold land, a common type of land tenure in Hawaii, means that you only own the right to use the land for a specified period, not the land itself. This can affect your ability to finance and resell the property, and at the end of the lease period, the land reverts back to the lessor.
Before making any decisions about buying and building on the Big Island, it’s crucial to understand these complexities. We recommend checking out our blog post: Before You Buy And Build On The Big Island Of Hawaii. It provides a comprehensive guide that can assist you in making informed decisions about your investment in the Big Island’s real estate.
By understanding the unique landscape and regulations of the Big Island, you can ensure that your land investment is not only financially sound but also respectful of the rich natural and cultural heritage that makes this place so special.
Whatever you choose...
In the journey to finding a place to call home or to invest, one thing remains certain: there is no one-size-fits-all solution. Buying property on the Big Island is much more than just a real estate transaction. It’s an exploration of lifestyle choices, it’s a commitment to a community, and above all, it’s about finding a place where your heart truly belongs.
From the vibrant neighborhoods of Kailua-Kona to the verdant tranquillity of Hawi, from the rustic charm of Captain Cook to the untouched beauty of Puna and the dynamic vitality of Hilo, there’s a place for every dream and every dreamer on the Big Island.
Houses, condominiums, and vacant land each offer unique opportunities and challenges. Be it the freedom and potential of a blank canvas offered by vacant land, the convenience and community of a condominium, or the comfortable familiarity of a home – every option has its charm.
Deciding between them is no small task. It demands careful consideration, extensive research, and sometimes, dealing with the intricacies of local laws and regulations. However, amidst all the logical analysis and practical considerations, remember to listen to that inner voice, your gut instinct.
When you stand on a piece of land, walk through the rooms of a house, or look out from the balcony of a condo, pay attention to how it makes you feel. Sometimes, the most rational decision is the one that your instinct points you towards.
The journey to buying property on the Big Island is an adventure, an exploration of external landscapes and internal desires. So, set forth on this exciting journey, armed with knowledge and guided by your instinct. Embrace the spirit of the Big Island, listen to its whispers in the wind, its stories in the waves, and let it guide you to the place you can truly call home.
About the Author
James T. Morrison, R(S)
James T. Morrison is a Realtor with Koa Realty, inc. , and part of the Papakea Collection Sales Team. You can email him directly at:
JTM@Jamesmorrisonhawaii.com or call or text him directly at (808) 209-9906
Licesnse #79190 Realtor