Should we invest in an island home?

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MrsRoos
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Should we invest in an island home?

Post by MrsRoos » Sat Jul 06, 2019 4:46 pm

DH and I have been renting in Silicon Valley for the past 10+ years and are now at a stage in our lives wanting to build some home equity to diversify our portfolio. Unfortunately, we have been priced out of purchasing a home here in SV since most homes are > $1M in our area. We have saved up about $150k in cash for a downpayment and are ready to purchase a home now. One option is to purchase a home across the Bay now (average home price $700-800k) but living on the other side of the Bay is not a realistic option due to DH's business (his client base is here and would have to rebuild business) and my commute to work is currently <15 mins. Additionally, I can't bring myself to pay ~$10k in property taxes every year, especially with the new tax changes on SALT. Another thing to note is that we can't move out of the Bay Area now due to family obligations (family members getting old etc.).

So we're left exploring purchasing a (cheaper) home somewhere else and have shortlisted Kauai because we visit the island almost every year and can see ourselves moving there in 5-10 years or otherwise, living there in our retirement (which is quite far out). Also, your money goes farther on Kauai (larger home and lot). We are aware of the reality of living there - island fever, hurricane risks, lack of white-collar jobs etc. The main question here is if this is a good financial move. We would rent the property out to a long term tenant.

Property price: <$600k
Property tax is 0.3-0.6% of assessed value
Monthly P+I+Homeowners insurance+property tax = $2,500/mth @ 3.8% interest rate (we have excellent credit scores)
Rent on a 2-3 bd room home = estimated $2,800/mth (there is a housing shortage, so rents are high)
Property Management @ 10% of rent = $280/mth
Maintenance cost = $200/mth
This means we just about breakeven or pay out another couple hundred of dollars per month, depending on rental rate. We would also build an in-law unit on the property so that DH and I can stay there when we visit, eliminating future vacation rental costs.

Other pertinent info:
Annual household income - ~$200k
Emergency fund - yes
Retirement savings - 401k, SEP-IRA maxed out (need to setup backdoor Roth this year)
Additional $1,000/mth into taxable VTSMX
Rental in SV is pretty stable (very few rent increases in past 10 years. <$3k per month)

What would you do if you were in our shoes?
“Anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist.” - Kenneth Boulding

livesoft
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Re: Should we invest in an island home?

Post by livesoft » Sat Jul 06, 2019 4:50 pm

Alameda? You could rent it out and it is closer to home.
Last edited by livesoft on Sat Jul 06, 2019 5:02 pm, edited 1 time in total.
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Grt2bOutdoors
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Re: Should we invest in an island home?

Post by Grt2bOutdoors » Sat Jul 06, 2019 4:51 pm

NO!
Please read the numerous threads on "should I buy a rental home". If you can't get to the house in 20 minutes, then I would not. And even if you can get to the house in 20 minutes, are you cut out to be a landlord? You are basing your analysis on being fully occupied, but what happens when the rental loses the tenant? The "we just about breakeven or may be out a few dollars" gives me pause, and it should give you pause too!
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Wiggums
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Re: Should we invest in an island home?

Post by Wiggums » Sat Jul 06, 2019 4:53 pm

Would you rent the Kauai house until you retire?

sergio
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Re: Should we invest in an island home?

Post by sergio » Sat Jul 06, 2019 10:18 pm

Terrible financial move IMO. Don't pay $3000 to get $1000 in equity. Especially as a long distance landlord. You're doing well financially, keep it up.

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Sandtrap
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Re: Should we invest in an island home?

Post by Sandtrap » Sat Jul 06, 2019 10:38 pm

1. Specifically. . .where on Kauai?

2. Given the price of the home, which is pretty low, again, where on Kauai?

2b. What type of rental unit is this? Single Family Home on a small lot, townhouse, condo, etc?

2c. How old is the home?

2d. Nature of the home? IE: 2 bdrm 1 bath 1 carport?, 3 bedroom 2 bath enclosed garage?

3. Why not Maui, the BIg Island, Oahu? Have you done your comps?

4. Rental "clientele" in Hawaii can be very . . . "specific", that's why I ask specifically where.
The clientele can make or break your rental efforts.

5. Did you do your due diligence on the property management company? Where are they based?
What properties do they manage? What kind of properties do they manage? How long have they been doing it?
Is it a family business, one person, or a realty firm? Or a one person realtor?

6. Do you plan on operating the rental unit as a VRBO, AirBnB, or short term, then "Block out" time for yourselves for personal use?
Or, is this a long distance R/E investment more than that?

7. How often would you be able to physically go to Kauai and check on your property, in person?

8. How firm are you to relocate to Kauai in 5 years? In 10 years? Why not purchase a home there at that time?

9. Can you afford the home after purchase if for some reason it is vacant for 6 months?

10. Are you aware of the tremendous costs (and red tape) of building anything in Hawaii let alone on the outer islands?

Very Interested in your responses.
j :happy
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drew1976
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Re: Should we invest in an island home?

Post by drew1976 » Sat Jul 06, 2019 11:08 pm

We have live in the Bay Area and have ~200K saved up and often ponder the same thing.

I can't get over the mental hurdle that I can rent a nicer place for $4000/month than I can buy with 200K down and a monthly bill of $5000+

For now, we just are either waiting for the downturn for house prices to go down or just keep socking away cash for an eventual move out with a paid for house. I'm not willing to give up my job but also not ready to commit to paying Bay Area prices for 30yrs.

We have thought about Maui but it just doesn't make sense when you run the numbers and look at the laws in Hawaii for occupancy. Personally, I'd just keep stockpiling cash until a purchase here made sense or you're ready to move -that's what we're doing.

dawoof
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Re: Should we invest in an island home?

Post by dawoof » Sat Jul 06, 2019 11:54 pm

Hi Mrsroos

We have a rental business and have a few points to offer. It sounds like a rather big decision involving whether to rent or buy, finding the perfect place to live, as well as planning for retirement!

First, numbers. Besides repair & maintenance, which is between 5-10% of rent depending on the condition and quality of the property, there are several other expenses which you need to include in to your cashflow analysis. Landlord typically factors in 5% of rent for vacancy. And that's best case scenario. Even in a strong rental market, there is always a possibility of rent loss due to repairs after tenant turnover or in case of eviction. Another 3% needs to be set aside for replacement reserve (roof, hvac, major upgrades, etc.) - again depending on property condition. The 10% management fee is typically the month-to-month cost. If you factor in tenant placement, typically a one-month rent, the fee comes to about 18% a year which is shaved right off your gross rent. You might be able to find a manager who does placement for a half-month rent which makes it 14%.

So, if you take $2,800 rent minus (140 vacancy + 200 repair + 84 reserve + 504 management) - you are at $928 operating income before debt service, tax and insurance. With that said, your rental loss and depreciation can be written off your AGI and is a tax shelter.

Since you will be an absentee landlord, it will be critical you find a reliable manager and understand their terms and service to ensure they really keep up with your property maintenance and repair. When property has accumulated a lot of deferred maintenance, it is harder to rent (meaning vacancy) and might cause you to reduce rent even in a good location.

There are a few rule of thumbs people use to quickly determine the profitability of rentals. Here's one: https://www.coachcarson.com/one-percent-rule/
This rule is not true for all locations and the article elaborates on that.

Second, psychological impact. Tenants come in all sorts and behaviors. However, the wear and tear or damage some tenants will cause your property might lead you to occasionally lose faith in humanity. You will have the manager as a buffer and help minimize stress. But you are also faraway and if issues come up (including disputes with the manager), you will still need to handle it.

Third, new construction cost and feasibility. I do not know anything about what the construction business is like in Kauai. But these are some questions I would ask. How are you planning to oversee the construction of your guest cottage from the main land? Have you looked into construction cost on the island? Construction cost has been rising tremendously due to a number of factors. And with the cost of living on the island, I am curious what it's like to build there. Finding a reputable contractor who will guarantee costs and ensure quality is only the first step. But that itself is not a guarantee you will not run into problem with the contractor him/herself if challenges come up. You will also need to check to make sure the property you buy does not have a zoning restriction that will prevent you from building the cottage on the same lot.

Fourth, the real estate market cycle. Are you familiar with the value of real estate on the island? The real estate market right now is very much a seller's market with prices escalating rapidly even in 2nd and 3rd tier cities. So if it's the same on the island, you will be buying high and since it's such a wonderful place to live, hopefully the value will keep appreciating. But again, you never know when the recession hits. I think you want to at least make sure that if your numbers work out satisfactorily to the degree that if the property loses value significantly, you can continue to hold it long-term to weather out the downturn.

Landlord business is not for everyone. Even if you do not self-manage the property, rental nightmares people talk about are not an exaggeration. You might want to read that (very long) thread on rental investment to get some familiarity with that world.

Perhaps if you are planning to retire in 4-5 years, there is no need to rush to buy a house. The real estate market has been going strong for about 10 years now and eventually it will go into recession which will be a great time to buy. But if you are certain island life is where your future lies, then I would research the market there and take the time finding the right property and the right location. Location has a lot to do with the type of tenants you attract as well. And unfortunately bad tenants bring all kinds of liabilities to both your property and your personal asset. Not trying to discourage you, just want to share a bigger picture of property investment beyond cashflow.

niceguy7376
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Re: Should we invest in an island home?

Post by niceguy7376 » Sun Jul 07, 2019 7:57 pm

dawoof wrote:
Sat Jul 06, 2019 11:54 pm
With that said, your rental loss and depreciation can be written off your AGI and is a tax shelter.
I am doubtful that they can write off since OP income is more than 150K.

As for my input, this idea is a penny wise pound foolish.
I personally wouldn't do it.

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Sandtrap
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Re: Should we invest in an island home?

Post by Sandtrap » Sun Jul 07, 2019 8:56 pm

drew1976 wrote:
Sat Jul 06, 2019 11:08 pm
We have live in the Bay Area and have ~200K saved up and often ponder the same thing.

I can't get over the mental hurdle that I can rent a nicer place for $4000/month than I can buy with 200K down and a monthly bill of $5000+

For now, we just are either waiting for the downturn for house prices to go down or just keep socking away cash for an eventual move out with a paid for house. I'm not willing to give up my job but also not ready to commit to paying Bay Area prices for 30yrs.

We have thought about Maui but it just doesn't make sense when you run the numbers and look at the laws in Hawaii for occupancy. Personally, I'd just keep stockpiling cash until a purchase here made sense or you're ready to move -that's what we're doing.
+1
1. Hawaii Landlord Tenant Code
2. Hawaii accepted rental practices and norms, local customs/norms. (Hawaii has a unique island culture)
3. UHCOL transfers to high expenses and liabilities across the board for a rental business.
4. Difficulty of maintaining a ROI/CAP rate that's lucrative and worth the effort of distance ownership.
5. Wide variance of property management company professionalism, oversight, transparency, and accountability.
6. In general, Hawaii small claims court favors the tenant unless the landlord is very well represented and/or very prepared.
(somehow I have experience with this one, unfortunately)
7. Increasing ease in which tenants litigate against landlords in Hawaii. (perhaps everywhere?)
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fasteddie911
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Re: Should we invest in an island home?

Post by fasteddie911 » Mon Jul 08, 2019 10:22 am

I think it's a bit risky buying a home with plans/hope of using it in the future. A lot can change in 5-10yrs, on your end or in Kauai. I had family that used to live there. Kauai itself has changed a bit in the past 10-20yrs, who knows what it'll look like in the future. The effects of tourism, global warming, a hurricane, etc. could change the place. Visiting is different than living there, being aware of island fever is different from experiencing it. I'd save, invest, re-evaluate when the time comes, and if you make the move rent a few years.

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unclescrooge
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Re: Should we invest in an island home?

Post by unclescrooge » Mon Jul 08, 2019 11:15 am

Grt2bOutdoors wrote:
Sat Jul 06, 2019 4:51 pm
NO!
Please read the numerous threads on "should I buy a rental home". If you can't get to the house in 20 minutes, then I would not. And even if you can get to the house in 20 minutes, are you cut out to be a landlord?
This doesn't make sense.

In California, most people can't even get to work in 20 minutes.

I have 2 rentals 2,000 miles away. I've owned them for 14 years and never even been to the state.

That being said, buying a rental on an island is alluring.

I've been to Kauai 3 times in the past 4 years and will be going every other year into the foreseeable future.

But I couldn't make the numbers work for buying a rental property.

If the OP wants to buy as retirement home and not an investment property then it might make sense... But it would not be a sound investment. It would be more of a speculation.

Grt2bOutdoors
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Re: Should we invest in an island home?

Post by Grt2bOutdoors » Mon Jul 08, 2019 11:33 am

unclescrooge wrote:
Mon Jul 08, 2019 11:15 am
Grt2bOutdoors wrote:
Sat Jul 06, 2019 4:51 pm
NO!
Please read the numerous threads on "should I buy a rental home". If you can't get to the house in 20 minutes, then I would not. And even if you can get to the house in 20 minutes, are you cut out to be a landlord?
This doesn't make sense.

In California, most people can't even get to work in 20 minutes.

I have 2 rentals 2,000 miles away. I've owned them for 14 years and never even been to the state.

That being said, buying a rental on an island is alluring.

I've been to Kauai 3 times in the past 4 years and will be going every other year into the foreseeable future.

But I couldn't make the numbers work for buying a rental property.

If the OP wants to buy as retirement home and not an investment property then it might make sense... But it would not be a sound investment. It would be more of a speculation.
It makes perfect sense - it was a multiple part response, you snipped just part of it in your question to me. You may be comfortable being 2000 miles away from your property, but most people want to be close by to their assets. Some people are also not cut out to be a landlord.
I also said, if they have to put money out of pocket, that I would advise not to buy it.

Just because the OP has some cash burning a hole in their pocket, it does not mean they should throw it away either. I agree with you, what they are contemplating is more of a speculation and less of an investment.
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Valuethinker
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Re: Should we invest in an island home?

Post by Valuethinker » Mon Jul 08, 2019 3:30 pm

MrsRoos wrote:
Sat Jul 06, 2019 4:46 pm
DH and I have been renting in Silicon Valley for the past 10+ years and are now at a stage in our lives wanting to build some home equity to diversify our portfolio. Unfortunately, we have been priced out of purchasing a home here in SV since most homes are > $1M in our area. We have saved up about $150k in cash for a downpayment and are ready to purchase a home now. One option is to purchase a home across the Bay now (average home price $700-800k) but living on the other side of the Bay is not a realistic option due to DH's business (his client base is here and would have to rebuild business) and my commute to work is currently <15 mins. Additionally, I can't bring myself to pay ~$10k in property taxes every year, especially with the new tax changes on SALT. Another thing to note is that we can't move out of the Bay Area now due to family obligations (family members getting old etc.).

So we're left exploring purchasing a (cheaper) home somewhere else and have shortlisted Kauai because we visit the island almost every year and can see ourselves moving there in 5-10 years or otherwise, living there in our retirement (which is quite far out). Also, your money goes farther on Kauai (larger home and lot). We are aware of the reality of living there - island fever, hurricane risks, lack of white-collar jobs etc. The main question here is if this is a good financial move. We would rent the property out to a long term tenant.

Property price: <$600k
Property tax is 0.3-0.6% of assessed value
Monthly P+I+Homeowners insurance+property tax = $2,500/mth @ 3.8% interest rate (we have excellent credit scores)
Rent on a 2-3 bd room home = estimated $2,800/mth (there is a housing shortage, so rents are high)
Property Management @ 10% of rent = $280/mth
Maintenance cost = $200/mth
This means we just about breakeven or pay out another couple hundred of dollars per month, depending on rental rate. We would also build an in-law unit on the property so that DH and I can stay there when we visit, eliminating future vacation rental costs.

Other pertinent info:
Annual household income - ~$200k
Emergency fund - yes
Retirement savings - 401k, SEP-IRA maxed out (need to setup backdoor Roth this year)
Additional $1,000/mth into taxable VTSMX
Rental in SV is pretty stable (very few rent increases in past 10 years. <$3k per month)

What would you do if you were in our shoes?
Far too early to buy a retirement home.

And the difficulties of being a long distance landlord are huge.

I would wait to see how you life plans out. You may pursue career opportunities outside of SV. Real estate prices may fall. Your financial means may increase substantially due to corporate success.

I would sit this one out. You don't know how life is going to play out.

Thegame14
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Re: Should we invest in an island home?

Post by Thegame14 » Mon Jul 08, 2019 3:43 pm

not if you believe in climate change....

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Quirkz
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Re: Should we invest in an island home?

Post by Quirkz » Mon Jul 08, 2019 4:51 pm

MrsRoos wrote:
Sat Jul 06, 2019 4:46 pm
Additionally, I can't bring myself to pay ~$10k in property taxes every year, especially with the new tax changes on SALT.
Just want to point out that if you're renting, you're paying property tax. You just don't see it.

All the rest of your rationale for not buying (too expensive, attached to your current location) is sensible enough. I'd just mentally discard the property tax from your analysis, because it's not accurately reflecting the picture.

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MrsRoos
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Re: Should we invest in an island home?

Post by MrsRoos » Tue Jul 09, 2019 2:28 pm

Sandtrap, thanks for your questions. They are making our wheels turn harder! It appears that you're retired and that you're spending part of your time in Hawaii. How and when did you engineer this in? Are you also a long distance landlord?
Sandtrap wrote:
Sat Jul 06, 2019 10:38 pm
1. Specifically. . .where on Kauai?

2. Given the price of the home, which is pretty low, again, where on Kauai? South Shore - Kalaheo, Lawai or Koloa

2b. What type of rental unit is this? Single Family Home on a small lot, townhouse, condo, etc? <1,000 sqft home on a >10,000 sqft lot

2c. How old is the home? They range from newly renovated in the past 2-3 years to 50 years old.

2d. Nature of the home? IE: 2 bdrm 1 bath 1 carport?, 3 bedroom 2 bath enclosed garage? 3 bd 1 ba or 3 bd 2 ba, carport.

3. Why not Maui, the BIg Island, Oahu? Have you done your comps? No, as we cannot see ourselves living on any of the other islands.

4. Rental "clientele" in Hawaii can be very . . . "specific", that's why I ask specifically where.
The clientele can make or break your rental efforts. Agreed, need to do more research on the rental market.

5. Did you do your due diligence on the property management company? Where are they based?
What properties do they manage? What kind of properties do they manage? How long have they been doing it?
Is it a family business, one person, or a realty firm? Or a one person realtor? Need to do more research here.

6. Do you plan on operating the rental unit as a VRBO, AirBnB, or short term, then "Block out" time for yourselves for personal use?
Or, is this a long distance R/E investment more than that? Definitely long-term tenants only as we don't want to deal with the high turnover on short-term rentals. We also see this as a long-term, long-distance R/E investment that would also serve as a home in retirement.

7. How often would you be able to physically go to Kauai and check on your property, in person? 2-3X per year

8. How firm are you to relocate to Kauai in 5 years? In 10 years? Why not purchase a home there at that time? Not firm at all. Indeed, the option of using the downpayment now for a home in the Bay Area and sell this place in 10 years for a home in Kauai is also an option. If we purchase here, we will not be living there. We would be landlords for a property on Kauai or here.

9. Can you afford the home after purchase if for some reason it is vacant for 6 months? 6 months will induce financial stress; can possibly cover 3 months of vacancy.

10. Are you aware of the tremendous costs (and red tape) of building anything in Hawaii let alone on the outer islands? Not entirely but I do know that Kauai is relaxing laws on building ADUs due to the housing shortage.

Very Interested in your responses.
j :happy
“Anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist.” - Kenneth Boulding

jibantik
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Re: Should we invest in an island home?

Post by jibantik » Tue Jul 09, 2019 2:47 pm

Why do you need home equity?? Why put yourself through this? :confused

Just put the difference in VTWAX instead. I WISH the equity I had in my home was in VTWAX.

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Sandtrap
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Re: Should we invest in an island home?

Post by Sandtrap » Tue Jul 09, 2019 3:05 pm

MrsRoos wrote:
Tue Jul 09, 2019 2:28 pm
Sandtrap wrote:
Sat Jul 06, 2019 10:38 pm
1. Specifically. . .where on Kauai?

2. Given the price of the home, which is pretty low, again, where on Kauai? South Shore - Kalaheo, Lawai or Koloa

2b. What type of rental unit is this? Single Family Home on a small lot, townhouse, condo, etc? <1,000 sqft home on a >10,000 sqft lot

2c. How old is the home? They range from newly renovated in the past 2-3 years to 50 years old.

2d. Nature of the home? IE: 2 bdrm 1 bath 1 carport?, 3 bedroom 2 bath enclosed garage? 3 bd 1 ba or 3 bd 2 ba, carport.

3. Why not Maui, the BIg Island, Oahu? Have you done your comps? No, as we cannot see ourselves living on any of the other islands.

4. Rental "clientele" in Hawaii can be very . . . "specific", that's why I ask specifically where.
The clientele can make or break your rental efforts. Agreed, need to do more research on the rental market.

5. Did you do your due diligence on the property management company? Where are they based?
What properties do they manage? What kind of properties do they manage? How long have they been doing it?
Is it a family business, one person, or a realty firm? Or a one person realtor? Need to do more research here.

6. Do you plan on operating the rental unit as a VRBO, AirBnB, or short term, then "Block out" time for yourselves for personal use?
Or, is this a long distance R/E investment more than that? Definitely long-term tenants only as we don't want to deal with the high turnover on short-term rentals. We also see this as a long-term, long-distance R/E investment that would also serve as a home in retirement.

7. How often would you be able to physically go to Kauai and check on your property, in person? 2-3X per year

8. How firm are you to relocate to Kauai in 5 years? In 10 years? Why not purchase a home there at that time? Not firm at all. Indeed, the option of using the downpayment now for a home in the Bay Area and sell this place in 10 years for a home in Kauai is also an option. If we purchase here, we will not be living there. We would be landlords for a property on Kauai or here.

9. Can you afford the home after purchase if for some reason it is vacant for 6 months? 6 months will induce financial stress; can possibly cover 3 months of vacancy.

10. Are you aware of the tremendous costs (and red tape) of building anything in Hawaii let alone on the outer islands? Not entirely but I do know that Kauai is relaxing laws on building ADUs due to the housing shortage.

Very Interested in your responses.
j :happy
Sandtrap, thanks for your questions. They are making our wheels turn harder! It appears that you're retired and that you're spending part of your time in Hawaii. How and when did you engineer this in? Are you also a long distance landlord?
1. Grew up in Hawaii. R/E Development, Income Property, Property Management, business in Hawaii 35+ years.
2. Relocated to Northern Arizona 8 years ago. Sold most R/E (apartment buildings, rentals, etc. Also have R/E in Arizona.
3. No. I believe long distance landlording works on a small scale, SFH, condos, etc, but not for anything worthwhile. IMHO business works best when the owner is present.. . and watching.
4. I have seen and known many a couple with ideas as you have. Mainland USA to Hawaii. Sometimes it works out. Sometimes it does not and they reverse course with substantial losses. The financial costs, logistics, and cultural difference, can add up to make the idea untenable quickly or in the long term.
5. As in most of the Hawaiian Islands, Kauai has these "niche" areas, sometimes as close as down the street, where the demographics and dynamics can change in a good or bad way. It's not always obvious to someone driving by or a outsider, but it just is. This effects the "type" of tenants you get, the neighborhood you live in if you are going to be a resident, and so forth. It pays to go there and go often and spend time in the areas and specific neighborhoods you are interested in for this reason.
Your $500k budget already kind of dictates what areas you are limited to. If you had deeper pockets and resources and were looking at 800k to 1.5 mil properties that you could easily afford, then that would be another matter.

OTOH: I would rather live nowhere else.
I have family and friends across the Islands. Go there 1-3x/year.
Hawaii No Ka Oi
j :D
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texasdiver
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Re: Should we invest in an island home?

Post by texasdiver » Tue Jul 09, 2019 3:21 pm

When we lived in Texas I had a neighbor and co-worker who bought a very nice high-end condo in South Padre thinking that it would make a very nice retirement location in 10-15 years. She and her husband meticulously picked out the exact right spot, interviewed neighbors, did all their due diligence, and pulled the trigger.

For a few years they went down religiously and struggled to keep the place immaculate despite doing VRBO rentals. And after a few years most of their trips down became repair and maintenance trips, not vacation trips.

Fast-forward 15 years and they are about ready to retire. Their condo complex is now fading and a bit on the shabby side because the company isn't keeping up with as much maintenance as they should. There are basically no long-term neighbors anymore as the whole place has gone AIRB&B. The common pool area is a madhouse of rotating vacationers. The complex isn't providing some of the beach amenities that it used to like chairs and umbrellas. There are loud parties every night. And it is not remotely where they want to retire anymore.

They put it on the market for more than they paid, but all in all the whole experience wasn't remotely what they expected and they would have been far better off just to save the money and decide where they really wanted to retire when the time came.

Not saying this will be your experience in HI. But a lot can happen in your lives and within a community in 10-15 years, and even more so in a couple of decades.

Glockenspiel
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Re: Should we invest in an island home?

Post by Glockenspiel » Tue Jul 09, 2019 3:25 pm

Sandtrap wrote:
Sat Jul 06, 2019 10:38 pm

3. Why not Maui, the BIg Island, Oahu? Have you done your comps?
Because Kauai is the most beautiful place I've ever seen in person.

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Sandtrap
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Location: Hawaii No Ka Oi , N. Arizona

Re: Should we invest in an island home?

Post by Sandtrap » Tue Jul 09, 2019 3:52 pm

Glockenspiel wrote:
Tue Jul 09, 2019 3:25 pm
Sandtrap wrote:
Sat Jul 06, 2019 10:38 pm

3. Why not Maui, the BIg Island, Oahu? Have you done your comps?
Because Kauai is the most beautiful place I've ever seen in person.
Jurassic Park and Raiders of the Lost Ark was filmed on Kauai.

So, yes, that beautiful but without the dinosaurs.

DW and I once did a helicopter tour of Kauai. It was breathtaking!!!!
j :D
Wiki Bogleheads Wiki: Everything You Need to Know

Glockenspiel
Posts: 985
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Re: Should we invest in an island home?

Post by Glockenspiel » Tue Jul 09, 2019 3:59 pm

Sandtrap wrote:
Tue Jul 09, 2019 3:52 pm
Glockenspiel wrote:
Tue Jul 09, 2019 3:25 pm
Sandtrap wrote:
Sat Jul 06, 2019 10:38 pm

3. Why not Maui, the BIg Island, Oahu? Have you done your comps?
Because Kauai is the most beautiful place I've ever seen in person.
Jurassic Park and Raiders of the Lost Ark was filmed on Kauai.

So, yes, that beautiful but without the dinosaurs.

DW and I once did a helicopter tour of Kauai. It was breathtaking!!!!
j :D
I've done the helicopter tour. Hikes to the Hanakaipai Falls, NaPali Coast hikes, Waimea Canyon, Hanalei Bay Beach, Mahaulepu Beach, and Polihale State Park were also some of my favorites.

Church Lady
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Re: Should we invest in an island home?

Post by Church Lady » Tue Jul 09, 2019 4:34 pm

OP,

1) You need to watch a lot of 'why I am leaving Hawaii' videos on youtube or elsewhere. Maybe the things that bother these people don't bother you, but you should at least know about the things that bother main landers.

2) It is too soon to tie your future vacations and your future retirement to a specific location. In my opinion!
He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this is also vanity.

Noalani
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Re: Should we invest in an island home?

Post by Noalani » Wed Jul 10, 2019 3:46 am

If you truly have your heart set on a Kauai home, I'd heartily recommend that you and your husband think about renting a long-term rental on Kauai (for at least a year, preferably two) and live there. Make sure that it is a place you could call home and conceive of as a retirement locale for yourselves.

My husband and I have lived on Maui for the past 30 years, raised a family, owned a home, and also ran a business together. Our experience with people who move to the islands is that many return to the mainland after about two years. Outer islands can feel quite isolated and I think you have to live here for a chunk of time to let that sink in. In fact, my 26-year-old daughter (who lived in Kalaheo for the past year!) just moved to Oregon because she said, "Kauai is too remote." (Kinda funny coming from a Maui girl.)

We are at a different stage of life than you and are looking at downsizing, selling our Maui home, and relocating to the mainland. Both of our kids are now there and, as we have gotten older, we realize how much we value our siblings and extended family, as well as how much easier and cheaper travel is on the mainland when you can hop in a car and DRIVE. In addition, access to quality medical care and specialists becomes quite important as we all age. Outer islands have a hard time attracting and retaining doctors.

Just some food for thought as you contemplate an island home purchase...

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Sandtrap
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Location: Hawaii No Ka Oi , N. Arizona

Re: Should we invest in an island home?

Post by Sandtrap » Wed Jul 10, 2019 7:33 am

Noalani wrote:
Wed Jul 10, 2019 3:46 am
If you truly have your heart set on a Kauai home, I'd heartily recommend that you and your husband think about renting a long-term rental on Kauai (for at least a year, preferably two) and live there. Make sure that it is a place you could call home and conceive of as a retirement locale for yourselves.

My husband and I have lived on Maui for the past 30 years, raised a family, owned a home, and also ran a business together. Our experience with people who move to the islands is that many return to the mainland after about two years. Outer islands can feel quite isolated and I think you have to live here for a chunk of time to let that sink in. In fact, my 26-year-old daughter (who lived in Kalaheo for the past year!) just moved to Oregon because she said, "Kauai is too remote." (Kinda funny coming from a Maui girl.)

We are at a different stage of life than you and are looking at downsizing, selling our Maui home, and relocating to the mainland. Both of our kids are now there and, as we have gotten older, we realize how much we value our siblings and extended family, as well as how much easier and cheaper travel is on the mainland when you can hop in a car and DRIVE. In addition, access to quality medical care and specialists becomes quite important as we all age. Outer islands have a hard time attracting and retaining doctors.

Just some food for thought as you contemplate an island home purchase...
+1
Great points.

Yes. Absolutely. Rent.

In a short time, Kauai can seem really tiny compared to even Maui. It takes getting used to. For example: drive around the Big Island for a couple days then go back to Kauai. Whoa!!! (I'm not sure if there's anyplace on Kauai that's like Makawao or Kula)

Also, the local island culture, especially outer island Aloha Spirit, is wonderful, but some from the mainland have a hard time getting used to it and mellowing out, then leave after a few years.

++++1
My brother is a retired Internist in Kamuela on the Big Island. Says it seems like all but minor procedures get flow to Oahu.

Aloha
j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

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