Pros and Cons of Buying a Condo in Hawaii - Should I buy or Rent?

Whether you are trying to finally get out of your parents home or you’re thinking of moving to Hawai, here are some details you might want to consider before buying a condo here on Oahu.

Before we get into the meat of this blog, I will spoil the ending for you. The pros outweigh the cons in the long run. However, each individual situation is different and you need to make your decision based on those current factors. If you have any inkling to buy a condo here on Oahu, shoot me an email at mai@maihomeshi.com or simply press “Contact Me” located on the upper right corner of this page.

So let’s get started with the Cons:

CON #1: You are responsible for any repairs and assessments

No longer are the days when you could call your landlord or leave it to your parents to fix the flooded bathroom. As a homeowner, you will need to take care and maintain the home in a timely manner. That is why it is important to have adequate homeowners insurance and a rainy day fund for those unexpected moments.

Not only will your own unit need unexpected repairs, your building may have those urgent issues as well. This is when “assessments” may arise where the building’s association will require all homeowners to essentially “pitch-in” for the large repair. They’re not common, but buildings that have deferred maintenance for years or spent money in all the wrong places will most likely run into this issue. Not only will it hurt your wallet now, it can have long-term effects on your property’s value.

CON #2: New responsibilities - paying taxes, electricity, etc.

Once you own a home, you will be getting a lot of mail - or I should just say “bills!”

Most condos in Hawaii will have sewer and water included in the monthly HOA fees. However, you will be responsible for the rest of the utilities like electricity, cable, wi-fi, etc. Luckily we live in a year where "Auto-Pay” exists! Once you have settled into your new home, you will need to contact your service providers to activate an account and set up auto-pay. Set it and forget it.

Also expect a letter from the Honolulu City and County asking you to pay up your “property tax” once every six months. The amount due is based on your property value, which can change year after year, but apply for the “Home-Owner Exemption” to lower that amount!

The list of responsibility will indeed grow, but if you do not feel like you can handle thees tasks, I DO NOT recommend purchasing a condo. There are a ton of benefits to owning a home, which we will get into later, but there are also many consequences in deferring these obligations.

CON #3: Buying costs way more than renting

Let’s be honest, Hawaii prices are ridiculous. Trying to purchase the same condo you were renting for $2,000 would cost you $4,000… Make it make sense! With all of the monthly fees and high prices right now, it is really unfortunate that the gap between buying and renting has come to this here in Hawaii.

You may find yourself actually having to down-size and search in a different area to find something with a manageable monthly payment.

“Why would I want to buy when I can rent a bigger place for half the price!”

True, you can keep on renting, but it will continue to be your crutch that keeps you away from your bigger financial goals. You need to see this as just the first step in your climb in real estate. Think of that first home not just as a place you can live in, but a new pawn you can one day trade in for a knight and then so on. You will not be sorry you started early.

By the way, if you have specific numbers you would like to compare, use this rent vs buy calculator.

OKAY, finally we can go on to the PROS:

PRO #1: OWNING YOUR OWN HOME

Probably the easiest to explain. You own a home in paradise! That comes with a lot of bragging rights.

For those who grew up in a household that always rented, you had to always have that lingering idea that the landlord could just kick everyone in a month’s notice. When you own, you can confidently know there are no surprises coming your way.

PRO #2: Tax Advantages

As you pay off your home, your mortgage payments will be mostly going towards paying off the interest. You can claim the interest paid that year as your tax deduction.

PRO #3: Gained equity

Equity refers to the difference between the market value of the property, and the amount you owe on the home loan. As time goes on, you will pay off more of your loan while the value of your home increases. Historically, homes prices have been in a steady incline here in the US. Even better, Hawaii has one of the strongest housing markets due to the limited supply of homes and land.

PRO #4: Your mortgage payments will only ever lower, but rental payments will only ever rise.

Long-time renters might know the feeling when the lease is almost over the landlord emails you about another price increase. You might hate them for it, but they have the right to do so once your contract is over.

According to a KHON2 article from April 2024, rents in Honolulu, Hawaii have increased by 11%.

On the flip-side, you are locked in with the loan interest you purchased the home with (with a fixed loan). The only time it would ever change is if national interest rates become lower than your the rate you hold and you refinanced your loan. It was an awesome opportunity in 2021 when interest rates dipped to 2%. Some people who started with a 15% interest rate were able to refinance in 2021 and cut their monthly payments significantly.

PRO #5: Customize your home the way you want it

When renting a space, you are expected not to make any holes in the walls, alterations, modifications. It leaves creative tenants to be stuck in a plain, white box with limited options for decorating or reconfiguring. Owning your own home allows you to redesign the space to exactly your style. Say goodbye to Renter friendly DIYs on Tiktok.

So what do you think? Are you ready to take that step?

Schedule a consultation to see what makes sense for you.