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Should Military Families Rent or Buy a Home While Stationed in Hawaii? | PCS To Hawaii

Posted by admin on September 6, 2022

You’ve probably just received your orders and are preparing for your upcoming PCS to Hawaii. One of the most important decisions to make is where you will live. Should you buy, rent, or live in base housing?

If you have made the decision to live off-base, here are some pros and cons to buying vs renting. Also check out our Buying Info.

  • The BAH (Basic Allowance for Housing) in Hawaii is one of the highest in the country – Combine this with the COLA (Cost of Living Adjustment) that you will also receive because Hawaii is considered overseas, you will have more money to apply towards a mortgage. Check out below what 3 years of BAH looks like.

2022 Hawaii Monthly BAH


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  • The cost of renting is expensive! At a rent rate of $3,300 a month, you will spend about $40,000 each year in rent. Also to mention your first month’s rent and security deposit due upon signing the lease. If you rented for 3 years at that rate - $120,000. That is a lot of money! What else can you do?
  • Build your wealth - invest in yourself with the tax free BAH. Hawaii home prices have historically gone up 423.3% for single family homes, and 384.4% for townhome/condos from 1985 through 2020. Info provided by Honolulu Board of Realtors - Historical Data.

    Since homes appreciate over time, that means you are building equity by paying your mortgage down and market appreciation. Ask yourself, if you took home $50,000 after your PCS, is that better than throwing $120,000 away to rent? Over the past several years, many Hawaii homeowners have done this, and some have taken way more with them when they sold!
  • The VA Conforming Loan limit in Hawaii is $970,800 – The limit applies if you currently have a VA loan and are interested in buying a second property while in Hawaii. In January 2020 VA loan limits were removed if you have full entitlement – which means if you are approved for a $2 Million dollar property – you can purchase it with the VA loan! Our team record is $1.7 Mil on VA loan. Connect with us to figure out how the heck we did that! That’s right – 0% down using your VA entitlement.

    Check out our VA Loan FAQ’s & Tips for more VA loan info.
  • If you're Savvy, you can save – PCSing to Hawaii, you will receive BAH, COLA, and Temporary Lodging Allowance - these start as soon as you arrive and check in with your duty station. TLA is an offset you receive for the first 60 days that allows you to find a home. Learn more about TLA entitlement at DOD Defense Travel Management Office and download our PCS Packet for TLA approved hotels.

    While this is no guarantee that you will make money from BAH, COLA, and TLA, it is possible to use some of that money towards closing costs on a home, or pay down some debt. Keep in mind, living off post is expensive so you very well may end up spending all of the entitlement you receive. Look for the deals!

Photo by Jeremy Bishop on Unsplash

  • Tax benefits – Yes, you do have to pay property taxes when you own property, but you will get tax write offs on taxes and interest paid! Get into the investment mindset and you’ll find out Hawaii is ranked one of the lowest in property tax amount - 10 Best States for Property Tax. This reduces your monthly mortgage amount! It’s also best to speak with a tax professional about any taxes - don’t forget to ask them about the VA funding fee tax deduction when it comes time for taxes!
  • Oahu has a strong housing market – Homes on Oahu continue to appreciate in value and that is largely due to the following unique aspects of living here – all 6 military branches are present on the island, tourism is strong all year, foreign investment, and space is limited on the island. Appreciating home values help military families make short and long-term gains.
  • Your home, your creativity – A home is not fully your home, until you make it your own. Learn about renovations to your liking but be sure to inquire about permitting and using licensed professionals if the job requires. We can certainly connect you with trusted professionals!
  • You will have to qualify for a VA loan – A major part in qualifying for a loan is knowing your credit score. Find yours for free with online services like Credit Karma or you can get a free copy once a year. Before you pull your credit, speak with a VA lender first!
  • Pride of ownership – Maintaining your home comes with… maintenance! Download our Home Maintenance Planner for tips and some extra info from Better Homes and Gardens. This helps you live with more peace of mind, and prospect buyers will appreciate you taking care of your home.
  • Utilities are not included in your mortgage payment – However, as a homeowner you have the ability to buy a home with solar panels or have them installed which can greatly reduce your electric bill. If you have a Homeowners Association, sometimes a utility is included. We can help you identify and find out what is included with HOA and maintenance fees.
  • Home preparation for selling – We help you understand the current market, and discuss a plan for your options on selling or renting your home when it comes time to PCS again. If you have to rent your home, you will need to factor in property management fees, GET collected on rent received, and expense – here is a Guide to help you understand that. Scheduling a consultation is the best way we can help!

Photo by Tierra Mallorca on Unsplash

What to Consider When Renting a Home

  • Repairs are not your responsibility – If something goes wrong in your rental property, it is up to your landlord to fix it. However, we have found that most items do not get fixed in a timely manner and there are no guarantees they will fix it back to the same condition as before.
  • It’s easy to move – Negotiate a new lease at the end of your term with your property manager, or check out other rentals to see if you want to live in another area on the island. Be sure to compare rentals vs buying to see if the payment is near the same. Contact us for a customized rental search.
  • Utilities are not part of the rent - Generally, utilities are not included as part of the rent. However, some rentals do include this but you have to search specifically for that and find those.
  • High deposits – You will have to come up with a hefty deposit. It is usually your first and last month’s rent up front. In Hawaii, – it is reasonable to estimate a minimum of $5,000 (likely more) to cover both months.
  • Finding a pet friendly rental on the island is challenging – We know pets are family too, but most rentals are not pet friendly in Oahu. Often, landlords don’t want to risk the potential damage of having pets on their property. If they do, it probably comes with a fee. Usually it is a full month’s rental amount as a deposit. Contact us to help you find a pet friendly rental.
  • Your BAH is a total loss – You have paid a landlord’s mortgage instead of your own and will have no tax benefits to claim. You may have also lost anywhere between $30,000 to $42,000 that year in BAH money paid out to the landlord instead of paid into your own home.
  • Rentals go fast – The demand for rentals is so high that property managers prefer to deal with the prospective tenant directly. Therefore, you will have to find and make appointments for showings directly with the property manager or landlord. You will also need to submit rental applications, which can be costly if you are not selected!
  • Property manager availability – The availability and attentiveness of your landlord or property managers will be important when you’re in need of something and they are in charge of what is allowed in your space.
  • You can be forced to move or possibly face a yearly increase in rent– A landlord or property manager can decide not to allow you to continue to reside there once the agreement period is over, or even raise the rent amount.
    Whether you choose to rent or buy, make the best decision for your goals. Do you want to become a homeowner and build wealth? Reach out for support - glad to educate and support you!

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