Townhome Purchase on Oahu, Hawai'i! Looking for your Insights!
Hi Community! I am looking for some candid guidance here, specifically if you know the Oahu market.
My fiance and I are buying our first townhome together (actually got chosen from a housing lottery with DR Horton for one of the Flex units at Ho'opili- the new development in Ewa/East Kapolei). The flex allows for us to rent the bottom down for commercial space (has to be our commercial business) or as a 1 Bedroom rental. We decided to move forward so far, and have a couple more weeks to decide if we want to go through with the actual purchase. Some stats:
The townhome is a 3 Bedroom, 3.5 Bathroom, three level with one car garage and two other assigned parking. It's in a major up and coming development called Ho'opili with a monorail station about 3 blocks away. The purchase price is $678,000, with $469 HOA and $70 Maintenance fees roughly. The bottom floor we plan to rent out, however we DO need to invest about $10k right after closing to convert it into the rental by adding a wall and kitchenette and washer/dryer. We are only able to put 5% down, with an interest rate of 3.5% for 30 years conventional loan. We will have PMI, and our monthly mortgage payment comes out to just about $4000/month including HOA and fees. The downpayment of 30+k IS going to be a bit of a stretch for us. We will have to aggressively save the next couples months as the townhome is being built. The reason we are trying to justify this purchase is for a couple reasons:
- It's in a new development that has tons of potential down the road with the new rail, UH west, and close to Kapolei, which is being called Oahu's 'Second City'. We hope it can build equity in which we can refinance down the road to reach out 20% down faster to remove PMI.
- We can rent the bottom floor for roughly $1600/month and can bring our monthly payment down to just about the same cost of renting a comparable unit.
- It is our first home and we hope to be someplace we are happy and comfortable with, and we truly did fall in love with this townhome...
Some facts about us:
We are both 31 years old, we have a condo already in Waianae, Hawaii (purchase price was $236k back in 2018), that we rent out for the cost of the mortgage (not cash flow +), and we both work full time jobs remotely on the island. Our goal is to try and stay on the island for at least a few more years, and then see what makes sense as we settle down some more.
Hoping to get some honest thoughts, advice, anything! Just want to check ourselves before we commit to such a large purchase! It feels a little crazy, but I can't tell if it truly IS crazy, or if it's a risk that hopefully we can leverage down the road?... Thank you everyone for your help. Aloha :)