Should You Buy or Rent When PCSing to Oahu?

When military members receive their PCS orders to move to Oahu, the first question is usually buy or rent. It can be a very stressful and difficult time when considering a move. There are so many things that need to get in order, but housing is usually at the top of the list. Many times the duty assignment might be the first time to Hawaii. The initial conversation is usually — how can I buy a property when I have never been to the island? The next thought is centered around shorter-term assignment time frames on island, and can I buy then sell and does that make sense? The short answer is YES. If you have a great partner in an agent that is knowledgeable about the island, rentals, PCS and where to buy, many of those concerns can be washed away.

Military on Oahu

With the military being the second largest industry in Hawaii behind tourism you can bet there will always be a steady flow of new PCS’ing to the island. That traditional 3-year time frame comes and goes quickly. Just as fast as someone stationed on Oahu gets orders elsewhere someone on the mainland is getting orders to the island. This, in short, creates a churn of new military members that need housing. Hawaii, and Oahu specifically, is one of the states you really do see our military members on a daily basis. This is not just the occasional member in uniform as you might find in certain areas of the mainland but a real presence is seen and felt on Oahu daily. This also means that our military members are in good company with other military members. You can be assured that another military member lives close by either next door for down the street. You will be hard-pressed to find anywhere on island that does not have a military member living close.

Oahu Traffic

I hear a lot of talk about traffic and drive times to and from the bases. It is true that Hawaii is experiencing growing pains, and yes the traffic can be an issue, but it is also very predictable. Some places such as California, New York, Chicago, or Florida seem to have gridlock 24/7, but in Hawaii, we have a predictable morning and afternoon traffic flow and other than that you can zip around town fairly quickly. Now if you live extremely west and have to be more windward every morning at 7:30am, then you might want to reevaluate your housing. But if you have some flexibility, it is all manageable.

Loans & Interest Rates

It is true that in the recent years the interest rates have been trending upwards. However, we are still in an unprecedented cycle of historically low VA loan rates. The fact that Oahu has a current VA loan limit of $721,050 certainly helps. This means that a VA buyer can purchase a property up to the $721,050 amount on Oahu with zero money out of pocket. This is an important point to repeat, you can buy up to the VA loan limit with no out of pocket loan expense. That is a tremendous value in every sense of the word. What if you fall in love with a property over that cap? The VA buyer, if qualified, can still get a VA loan over the limit but now they need to bring in 25% of the amount between the sales price and the limit. This means if you found a property for let’s say $731,050 and the limit is $721,050 you now have a difference of $10,000. Under the current rules, a VA buyer needs to have 25% of that amount or $2500 as an out of pocket expense to close. Many buyers are worried about the cost of housing, but if you have some flexibility a property can be found for any buyer and price point.

Should You Rent or Buy?

The rental market prices have really increased with the number of people living on island. Some just do not fit a buyers mold and need to rent. The issue is the rents are generally set so that it covers most of, if not all of, another owners monthly payment. So while it may be less pressure because you don’t have to worry about many day-to-day homeowner worries, it is also an expensive monthly cost. If you can afford to buy then why would you rent? As a homeowner you are building credit, many times have a zero out of pocket expense versus a renter who has to come up with security deposits and 1st month’s rents, and also more than likely get to enjoy the Hawaii annual appreciation. We have had steady appreciation for a number of years and all the indicators signal that should not be changing anytime soon.

Want to Know More about Hawaii Life?

As a knowledgeable Hawaii Life Military Specialized Team (MST) member, I have some great resources for lending, insight to the neighborhoods and certainly can help with the entire process. With all the advancements in technology a buyer can get a great sense of a property, the area and neighborhood virtually. It might not be possible for a buyer to take a trip to the island before the PCS move but that is something I have helped with before and was able to get the buyer all set remotely. This includes videos, FaceTime, signings and more all with a buyer out of the state.

If you received orders to the island and have any questions at all please do not hesitate to call, email, or text me at any time. I am always happy to help in any way possible.

Further Reading

PCS Move to Oahu – Should You Rent or Buy?

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July 1, 2019

With a VA loan, you can get up to a $700k loan, but what would the mortgage and additional expenses such as insurance and HOA be monthly? The BAH for Oahu dramatically decreased and it doesn’t seem affordable.

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