In Part 3 of our ongoing series “Relocating to the Big Island of Hawaii“ I’ll be answering a very specific question that I get often from Buyers prior to moving to Hawaii.
Buying a Home Versus Renting a Home
Q: “Should I buy a home or rent?”
A: Let’s look at this question from the view of the typical single individual or family who may have visited the Big Island a few times on vacation, and has decided to begin researching their move to Hawaii.
Mortgage interest rates are at historic lows, prices have stabilized, and inventory is moving again; it’s better to buy, right?
When speaking long term, it’s statistically a good idea to buy if you can. Typically, if you intend on living in a home for approximately 5 years, or more, the general rule says thousands can be saved by buying. However, when buying it’s important to remember the costs associated with purchasing a home or condo.
- Purchasing Costs: costs incurred during the closing of a home you are purchasing, which includes the down payment, title insurance, mortgage origination fees, and other typical closing costs.
- Yearly Costs: recurring monthly or yearly expenses once home ownership is achieved, which include monthly mortgage payments, monthly condominium maintenance fees, property taxes, homeowners insurance, as well as general property upkeep of a residence.
- Selling Costs: costs incurred when closing on a home you are selling, which include Broker’s commissions, deferred property maintenance items, and other fees that may be associated with the selling of a home.
It’s important when buying a home to look at a purchase from a long-term, cumulative perspective, to estimate the total costs involved in home ownership versus any potential upside of a positive return upon the sale of your home. That being said, there are situations where renting first while searching for a home to purchase, can be a good option.
When Renting May be an Option
Q: What’s an ideal situation to rent a home in Hawaii?
A: If you are considering a move to Hawaii, but have only visited a few times, investigating the various climates and areas of the Big Island of Hawaii is paramount. In this situation, it’s better to rent on a short-term basis until you find the place that’s right for you and your family.
Also, the flexibility factor for people if they might change jobs, or have problems with their neighbors, can be important as well. It’s typically easier and faster to get out of your lease, than to put your home on the market for sale.
Another factor in renting can be avoiding the costs of home ownership as mentioned previously. Many people remember to budget for a monthly mortgage, but forget to consider insurance, repairs, utilities, appliances, and maintenance fees.
Without those, and depending on where you live, you can actually get more home for your money if you rent. The downside is that even if you are a long-term renter, your landlord may suddenly decide they want to sell, or even move back into their home. Here the renter is left scrambling for a new place to live, which can certainly add chaos to anyone’s life.
Ultimately, you have to decide what’s best for yourself, your family, your budget, and your lifestyle.
Relocating to the Big Island of Hawaii – Part 4 Preview
In “Relocating to the Big Island of Hawaii – Part 4″ I’ll be answering more questions focused on actually living here on the Big Island of Hawaii.
- Joining Local Clubs & Community Organizations
- Big Island Schools
Helping people realize their dream of living in Hawaii is my passion. If you are considering relocating to the Big Island of Hawaii, or are in the market for real estate anywhere along the sunny Kona coastline, please contact me anytime for a no obligation “talk story” about why I make Kona home. Let me help you to live your best Hawaii life!
Please feel free to contact me anytime at:
Todd W. Barrett, Realtor(S), ABR