Buying Property on the Big Island of Hawaii, A Beginners Guide

By David Brilliant

Buying property in paradise is not quite the same as buying a home in the Midwest. There are many factors to consider when buying a home on the Big Island of Hawaii. This article will help you along your path to your dream home.

Here is a list of things you should consider before you contact a Real Estate Agent on the island. We’ll discuss each one of these items later on.

• Do you want to live on the wet side or the dry side of the island?


• How far away from the big cities do you want to live?


• What type of construction do you prefer?


• Fee Simple or Leasehold?


• Do you want a view? If so, ocean views or mountain views?


• Price range you can afford?


• Specifications of the home you want?

• How many beds/baths?


• Square footage wanted?


• Older or newer home?


• Size of lot?

Take the list above and try and answer as many as you can before proceeding. If you can answer them all you are doing well! Now let’s discuss each one of these.

Do you want to live on the wet side or the dry side of the island? This is a pretty simple straight forward question. Hilo is on the east or wet side of the Big Island and gets about 140 inches of rain a year. Kona is on the west or dry side of the island and gets about 15 inches of rain a year. The wet side is green and lush and in constant high humidity. Whereas the dry side can be hot and dry and quite desert like. Also, consider the elevation in which you want to live. The higher the elevation the cooler the days and nights. And nights can be quite chilly. Some homes require wood burning stoves.

How far away from the big cities do you want to live? The closer to the big cities of Hilo or Kona that you want to live the more expensive the homes and land get. Traffic can be bad in and around the cities. And of course privacy is less around the big cities. So you need to decide how far away from the big cities do you want to live? Some areas of Hawaii can be quite rural (True country living at its best) and as far away from civilization as you’ll ever want to be. Markets can be a 20 mile drive and medical facilities can be 20-40 miles away. This is something to decide before you begin to look for your new home.

What type of construction do you prefer? Most people don’t care, but there is a difference and both have advantages and disadvantages. The traditional type of construction is post and pier. The newer type of construction is slab and footing which is how most homes on the mainland are constructed. Post and pier construction is a home that is raised up off the ground like on stilts. I have heard and read two different explanations for this type of construction. One explanation is cooling. By raising the home off the ground the heat is blown out from under this type of home by the trade winds. The other explanation I’ve heard is that it helps to keep bugs and vermin out of your home. And it makes it easier to figure out where they are getting in and to close off their access. I am not sure which reason is correct or if both are correct. The downside to post and pier is that your house is not anchored to the ground so if a hurricane were to hit (very rare in Hawaii) you have a better chance of losing your home. Also, you will feel earthquakes with more intensity in this type of home. Concrete slab and footing construction is becoming the norm on the island these days. The only real downside to concrete slab construction is cooling. I have heard that concrete slabs can remain warm and can heat your house. This can be a good thing if you live in a cooler climate or a bad thing if you live in the more desert like environment.

Fee Simple or Leasehold? Fee Simple means you own the land the house sits on. Leasehold means you buy the house but not the land. You will have to pay the monthly lease payments to the landowner. There is not much downside to Fee Simple. But there may be an advantage with Leasehold for those who don’t have much money and want to buy in Hawaii. I have heard stories of savvy individual buyers who negotiate the price of a Leasehold home way down (because they can be hard to sell). Then save their money while living there and are able to buy a Fee Simple home within a few years. Though I am not sure this would work out in today’s market.

Do you want a view? If so, ocean views or mountain views? Most people want an ocean view. But can you afford it? Mountain views can be just as stunning and much less expensive. Having no views in Hawaii is hard to find but some people prefer it that way. Either way the old adage “Location, location, location!” really applies here.

Price range you can afford? Only you can answer this question. Just be reasonable and stay within your means. Don’t be willing to buy more than you can afford because you fell in love with a place. You will regret it later and may have to sell it because you cannot afford it. Before you settle on your price range see the section below titled “Other things to consider”. Some things could affect your affordability factor.

Specifications of the home you want? How many beds/baths? Square footage wanted? Older or newer home? Size of lot? Let’s face it, everyone would love to have a huge estate on 40 acres, right? Get ready to downsize. An average size home in a lower price range can be 800sq.ft. to 1,200sq.ft. Smaller size homes are the norm on Hawaii rather than the rule. Don’t get me wrong, if you have the money you can find plenty of large homes. An older home can be trouble if you are not careful. As always, do your homework when buying any home. Make sure to get the home inspected and have a termite inspection as well!

• What lava zone is your potential home in? The United States Geological Service has a lava zone map and has defined these zones as 1 through 6 with 1 being likely to see another lava flow and 6 not so likely. If your house is in zones 1 or 2 your home insurance will cost more, period. You need to do your homework before you buy a home in one of these zones.


• Most lenders on the mainland will not provide a mortgage for a home in Lava zones 1 or 2. Some won’t, even if your home is in zone 3. If your home is in zones 1 or 2 you will probably only be able to get a mortgage through a bank in Hawaii. Because you will be going through a bank you can expect a ¼% to ½% higher APR. But since you are in lava zones 1 or 2 you can expect an additional 1% (approx.) higher APR.


• Is the home permitted? A lot of homes on the island have been built without permits. Are there other structures on the property? If so were they built with permits? Be careful about buying un-permitted structures.


• Buying land and building your own home. Unless you are going to build the house yourself, there is no longer much of a price advantage to doing this.


• Some homes are not hooked up to electricity. Always ask if the home is on or off the grid.


• Some homes are not connected to the city water system. If this is the case you catch your own rain water and will have a large water storage tank on your property.


• Your home may use a cesspool if not connected to the city sewer system.

Now go out and interview numerous Real Estate Agents! Find the one that you feel will be able to help you the most. By knowing exactly what you want and what you can afford you will help your Real Estate Agent help you find the home you are looking for. And it will save them a lot of time by having the answers already to the questions in this guide. Also, it will show them that you mean business and you will get more of their time than someone who is undecided about what they want and where they want to live.