PCS to Hawaii: Key Insights for Military Home Buyers
PCS to Hawaii: Key Insights for Military Home Buyers
When conducting a Permanent Change of Station (PCS) to Hawaii and considering the possibility of buying property, it's important to be well-informed. Here are two common misconceptions about purchasing real estate in Hawaii:
1. It’s a Sure Thing.
2. It’s Too Expensive.
While many homeowners who bought properties in Hawaii during 2019-2020 managed to resell within a year, making substantial profits, this is not a reliable indicator of consistent market trends. The value of the Oahu market doesn't typically increase dramatically without significant renovations.
For those concerned about the cost, consider this perspective: It may be too expensive NOT to buy in Hawaii. Here's why:
A Personal Experience
We have experience buying, renovating, and selling properties at various duty stations, eventually retiring from the Army in Hawaii. We purchased our first home in Haleiwa in 2014 for $650,000 and sold it in 2021 for $1,140,000. We still own a multi-family home in Waialua, where tenant rents cover our mortgage and utilities, allowing us to live across the street from the ocean for free.
Buying Tips
1. Be Careful and Have an Exit Strategy:
When you PCS, if the market is down and you bought a move-in-ready home that didn’t need renovations, you might struggle to break even. However, if you buy a fixer-upper in a good neighborhood and renovate it, you’ll gain instant equity and increase its value.
2. Consider Rental Potential:
If the market drops and selling isn’t an option without a loss, you might need to rent out the property. Before buying, research potential rental income.
Important Note:
It is almost impossible to buy a property and rent it out when you PCS without losing money each month unless it has additional rental potential (e.g., studio over the garage, ohana unit, duplex). Without this, you may lose $500-$1,500 per month after paying property management fees and Hawaii taxes. Short-term vacation rentals like AirBnB and VRBO are mostly illegal on Oahu, with fines up to $10,000 per day for advertising rentals under 30 days.
Risks and Rewards
Buying a home in Hawaii can be a financially smart move or a path to significant financial loss. This isn't to scare you but to ensure you have a realistic picture.
Assistance and Resources
I've helped many property owners on Oahu make substantial profits with minimal repairs. My clients have access to my network of vendors, including cabinet/stone suppliers, plumbers, electricians, lawyers, handymen, and contractors.
Be aware, non-Hawaii residents might be subject to HARPTA withholding (7.25% of the sales price) when selling. However, this can often be waived, reduced, or refunded.
Final Thoughts
Now that you have a balanced view of buying, selling, and becoming a landlord in Hawaii, remember that worthwhile endeavors often require effort and planning.
PCS Assistance
After aiding hundreds of military families transitioning to Oahu, my team created a comprehensive PCS packet. This includes information on military housing areas, command sponsorship, restaurants, hikes, pet importation, TLA-approved hotels, island regions, and essential paperwork. Contact me to receive your copy!
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Erica Lehmkuhl
RB-23373, Principal Broker/Owner
Retired Army 1SG (E-8)
Seaside Realty RB-23533
66-250 Kamehameha Hwy C-208, Haleiwa, HI 96712
Contact Information:
Call: 808-723-0953
Email: [email protected]
Website: [Seaside Realty]
Helpful Links:
- [Resources]
- [Services]
- [Listings]
