Archive for February, 2009
Should Military Buy Or Rent When PCS’ing to Oahu?
February 12th, 2009 categories: Military
Given the amount of the high amounts of Basic Allowance for Housing (BAH) available for military transferees to Honolulu, there can be a dilemma concerning whether it is better to rent or to buy. Having had the chance to sell homes for many veterans that purchased while stationed here, I can tell you that a Honolulu home or condo turned out to be one of their best investments.
Let me explain. While they lived here they purchased a home using the monthly BAH to cover their monthly mortgage payments. When it was time to move, a property manager was hired and the unit was rented out. Initially, the cash flow may have been negative, but overtime, because of raises in rents, the property began creating a monthly positive income. Most of these former military people kept the home 20 to 30 years and at the time I sold the home for them, their Hawaii property represented one of the largest assets in their retirement investment portfolio!
Here is the downside to renting versus buying. While you live on Oahu you will be able to rent a much nicer home than if you purchased (the rental dollar goes much further than the buying dollar). The BAH makes you the Federal Government your partner in your home carrying costs for the term of your PCS on Oahu! So why not use this money to your advantage? By using the BAH at each of your PCS locations, over a 20 year career you could own 5 or 6 rental properties upon retirement! By purchasing while stationed on Oahu and again at your other postings, you could own over a $1,000,000 in real estate when you return to the private sector.
So, should you rent or buy? I know I am biased, but my recommendation is that you absolutely should buy! If you would like to discuss purchasing, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net too.
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Economist Views 2009 As Bottom For Hawaii Real Estate
February 12th, 2009 categories: The Market
Bank of Hawaii senior veep and chief economist, Paul Brewbaker, spoke to the Maui Chamber of Commerce this past Friday. Over the 17 years I have been following Paul he has been dead on with his predictions. He called the early 90’s recession and a median price for Honolulu homes in the range of $650,000. Brewbaker thinks 2009 is the bottom of our woes.
“The economy is sickly for now, but it could pick up in the second half of this year and continue on the upswing in 2010, economist Paul Brewbaker said Friday.
That rebound could come sooner if Congress quickly passes an economic stimulus plan meant to speed up the nation’s recovery, he said. A deal on an economic stimulus measure was announced Friday after Brewbaker’s talk.
“I’m pretty sure 2009 is the bottom,” he said. Brewbaker, senior vice president and chief economist for Bank of Hawaii, spoke at the Maui Chamber of Commerce’s annual Paul Brewbaker Ph.D. Economic Forecast Luncheon, sponsored by Bank of Hawaii.”
CLICK HERE TO READ THE MAUI NEWS ARTICLE.
Note that in the past Honolulu has led the Oahu real estate market out of economic down turns.
If you have thought about making a move in the Honolulu real estate market, call me at 808-737-2093 or toll free at 877-737-2093, to discuss your needs. Email works too and you can send it to keahi@lava.net.
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Two Honolulu Houses On A Lot for $759,000!
February 11th, 2009 categories: For Buyers, Homes For Sale
As usual, I was out looking at new listings this morning and I ran across this excellent opportunity in Palolo. For those who don’t know, Palolo is a central to everything in Honolulu. 10 to 15 minutes from University of Hawaii, Chaminade University, Punahou, Iolani, Ala Moana, Waikiki and most of core Honolulu.
There are two houses on this 5,200 square foot lot. Each home has its own entrance from a different street (the lot runs from street to street). In other words, the lower house is accessed from Myrtle and the upper house from Jasmine. This gives you a level of privacy that is not often found in this type of property. You can live in one and rent out the other or put relatives in the upper home and live in the lower. There are many different ways to take advantage of the opportunity.
CLICK HERE FOR AN MLS FACT SHEET.
If you would like to see this property, feel free to call me at 808-737-2093 or 877-737-2093. I can be reached via email at keahi@lava.net.
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Billionaire Is Buying Honolulu Real Estate
February 11th, 2009 categories: The Market
When a person with a billion dollar net-worth speaks about Honolulu real estate, I listen! Jay Shidler is one of those billionaires who was recently interviewed by Pacific Business News. Below is a clip, but the entire article is very educational and worth reading.
“We’re investing in this market. These last two months we’ve probably made offers on almost $100 million [of property]. The point is, we think it’s a good time to buy, but we’re really trying to make our investment in reaction to where we think the market’s going to be and the mitigants we can bring to that.”
CLICK HERE TO READ THE ENTIRE PBN ARTICLE
In a nut-shell, Jay thinks this is a terrific time to buy Honolulu commercial real estate and I think that thought translates to home and condos.
If you have a budget of a billion dollars or less, call me at 808-737-2093 or toll free at 877-737-2093 to discuss your real estate goals. You can email me at keahi@lava.net too.
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A Plan for Military Transferees Moving Honolulu
February 10th, 2009 categories: For Buyers, Military
If you are in the military and your orders have you moving to Honolulu, here is an 8 step plan to help you make your move smooth and easy.
1. Select a real estate broker. This selection is really important. Your agent will become your eyes and ears on the ground. An experienced Realtor can help with advice as to neighborhoods and available housing that are going to best meet your current budget and home needs. Part of the advice will be an eye to the future as most transferees will move again, and buying right on the front end will be the key to being able to sell on the back end.
2. Confirm the amount of your Basic Allowance for Housing (BAH). You may be surprised by the amount available to you! The lowest amount without a dependent is currently $1,555 and the highest amount with a dependent is $3,401. At an interest rate of 5.5% and an amortization term of 30 years, the payment for every $100,000 in loan is approximately $567.00 per month. So the minimum BAH will carry a loan of $274,000. Be sure to check if you qualify for a VA loan too. CLICK HERE TO CHECK YOUR BAH. Read the rest of this entry »
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Honolulu House At Wall Street Journal Website!
February 9th, 2009 categories: For Buyers, Homes For Sale
The Wall Street Journal website has a beautiful set of pictures of a just completed $10,500,000 home at the foot of Diamond Head. CLICK HERE TO BE TAKEN TO THE SLIDE SHOW!
CLICK HERE FOR A COPY OF THE MLS FACT SHEET.
Call me at 808-737-2093 or toll free at 877-737-2093, if I can answer any questions. I can be reached via email at keahi@lava.net.
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Charitable Remainder Trust & Honolulu Real Estate
February 6th, 2009 categories: For Sellers
When a rental property has been owned for an extended period, especially in Honolulu, it has probably appreciated an incredible amount. For many, this property may represent a major portion of their investment portfolio. The sale of this type of property could be a significant tax event! If a property were purchased 40 years ago, the owner may have paid a $100,000 for it and it could be worth $1,200,00 today. It is safe to assume that the entire $1,200,000 could be exposed to a combined Federal and State capital gains tax of 22.25%. This means an outright sale without prior planning could require a seller to pay a tax of $267,000! What options are available to a seller? Read the rest of this entry »
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Honolulu Home For A Book Worm!
February 6th, 2009 categories: Homes For Sale, Neighborhoods, Rants & Riffs
I’ve seen them on T.V., you know, those “Ellery Queen” book shelves with ladders that go to the ceiling. A few weeks ago, I was previewing properties in one of Honolulu’s more prestigious neighborhoods Kahala. I found this home in the gated community of Nohona Kahala. It is listed at $995,000, 3 bedrooms with 2.5 bathrooms and a total interior area of 2,297 square feet. The book case below is what caught my eye! I am an avid reader and it was fun to ponder a person reading all of the books. Alas, the home is under contract, but if you would like a fact sheet on it, just click here.
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Low Down FHA Financing For Honolulu Real Estate
February 6th, 2009 categories: For Buyers, Mortgages & Financing
Conventional lending guidelines in Honolulu have tightened dramatically. Below is an outline of current conventional lending rules.
1. When using less than 20 % down, the owner occupancy of a building must be 70% or more (up from 51%).
2. Most conventional lenders are requiring a minimum of a 10% down payment.
3. Conventional appraisers have become much more conservative with their appraisal values.
4. Maximum loan amounts are $625,500. There are higher balance loans with tougher lending guidelines up to $791,250.
5. Maximum credit from seller toward closing costs 3.0% of the purchase price.
6. Loans are not assumable.
Thank goodness that the tried and true Federal Housing Administration (FHA) loan programs are still available for Honolulu real estate. Here are the generally available terms. Read the rest of this entry »
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Proof Honolulu Real Estate Is Stronger Than Thought
February 6th, 2009 categories: For Buyers, Homes For Sale, The Market
This past Wednesday, I was excited about seeing this Saint Louis Heights home priced at $1,050,000. It is a clean 4 bedroom 2.5 bathroom home and it was built in 1963. If it had been remodeled, it was done sometime in the distant past. Even though it has incredible views, the lot is a flag lot. Flag lots are generally not as desirable as a regular rectangular parcel.
Anyway, when I got to the brokers open house, the listing agent informed me that the seller had accepted an offer! The home was on the market less than 12 days and it sold to a local buyer with a big down payment! This is further evidence that a well located, clean and properly priced property will sell fast. Given the short market time, I’ll bet the sales price is very close to the list price.
CLICK HERE FOR AN MLS FACT SHEET.
Feel free to call me at 808-737-2093 or toll free at 877-737-2093 if I can answer any questions.
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