All Forum Posts by: Steven Kimmey

So I just realized your initial posting was 2 years ago! So now I must ask if you had a similar experience as I described and how did things turn out?

Hi Miki,

I am a new VR property owner on Hawaii. You may have seen my post asking about insurance. I just spent the last year searching property beginning in Kona and Captain Cook areas and branching out to the East side around Hilo. Visiting the island 4 times and touring more than 50 properties. As I am a Realtor, I soaked in as much of the market as possible and watched prices around Kona skyrocket over 2017. Being more interested in a SF than a condo, the Hilo area seems to have more of a VR market with really only 3 hotels, versus the Kona area's numerous huge hotel resorts. So I finally settled in October on a property just north of Hilo and am now getting setup to rent.

There are some things you definitely need to consider regarding purchasing property on the Big Island. The points already made about things generally costing more, needing a tax license for the GE tax you'll collect, etc. are all true. I also found the following things to be quite limiting regarding insuring and financing, (if you're not paying cash) a property in Hawaii. Lava zones, flood zones, hurricane insurance, whether there is public water or a property uses rainwater catchment, leasehold Property, etc.

Some of those things are specific to buying a SFR on a lot, of course. But, there are also some considerations when looking at condos as well. I found some very reasonably priced ocean front VR condos in downtown Kona and then found the complex and management (or lack thereof) to be the reason for the price; or as in the case of 3 units in one complex in Hilo, the entire complex was up for sale to new management owners and not disclosed by the seller.

So my best advice is do lots of homework and visit many times. I can tell you that I basically interrogated all the owners of VRs and B&Bs where I stayed and the recurring theme was they wish they had done more research before jumping. But there is no substitute for being there in person experiencing each specific area. Remember that of the 9 climatic zones on Earth, ther are 7 existing right on the Big Island. Each area is completely different in climate. It was 80 on the beach the other day and there was 4 inches of snow on top of the volcano...oh yeah don't forget...it's a volcano.

I wish you good luck and would love to hear your story as it progresses.

I need a good insurance broker to insure a vacation rental.  So far having trouble with UWs who don't understand the scenario nor Hawaii. Can anyone help? 

I'm purchasing a property using conventional mortgage for second home. I intend to put the property into a land trust with an LLC as beneficiary. Will this be protected from the mortgage escalation clause considering the loan is not federally-backed?