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Updated over 1 year ago on . Most recent reply

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Elijah Wichers
  • New to Real Estate
8
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19
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Should I buy a condo in Hawaii at my new Duty Station?

Elijah Wichers
  • New to Real Estate
Posted

I am moving to Hawaii with the military soon and want to know if buying a condo is a good investment. Condos are the only affordable thing and I want to get started and own a place. However, with hefty HOA fees and high interest rates, my housing allowance will be exhausted and maybe even exceeded. Is it still worth while to buy and try to gain some appreciation and even some cash flow if I rent it out down the line? Or is now not a good time or are condos a no-go? I just want to learn and make the most financially sound decision. Unfamiliar with the area and how real estate operates there

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37
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25
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Doug Nordman
  • Waipahu, HI
25
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37
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Doug Nordman
  • Waipahu, HI
Replied

Elijah, I'm a retired submariner in Mililani, and we've lived on the island for nearly 34 years.  We own three properties here and we've been landlords for over 25 years.

BiggerPockets gives you the tools to invest all over the country in places where the cap rates make sense.  When you compare Oahu to the rest of the U.S., I think you'll be a little concerned about leveraging a personal residence into an investment for a short military tour... and very concerned about doing it here.  

If you aren't able to live on base or can't find a rental here (for the best of reasons) then I'd recommend house-hacking a 3-4 BR SFH with roommates. (That's the best way to put BAH in your pocket.) Another possibility would be a live-in flip (not for the faint of heart, and maybe not for families) that you could rebuild during your tour. That's going to involve a lot of nights & weekends... in between deployments, right?

If you feel obligated to buy a condo or a SFH during your tour here, do the math. It's better to buy an investment rental property that you can live in for a few years rather than buy a nice home and then try to turn it into an investment rental property. The appreciation is unlikely to pay the closing costs on both the buy and the sell during a typical three-year tour. Appreciation is going to have even more pressure on it as Koa Ridge and Ho'opili build out their new phases and start selling. Cash flow is challenging due to the homeowner's association fees.

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