I sit a lot of open houses and in doing that, not only am I happy to be there selling a client’s home but I also get to meet people from all over the world! It’s really one of my favorite parts about my business. Understanding other’s culture, experiences, food, and finding the similarities can be so fun!
What I’ve noticed among all the people that walk into my open houses is that they have a LOT of the same questions. Here are some of those questions and hopefully answers that will help you in your journey to being a Maui home owner.
1) Is this vacation-rentable?
Many homes and condos in south Maui are vacation rentable, however many are not. It’s best to work with your favorite realtor to understand the differences between which properties are and are not vacation-friendly. Maui County deems which properties are vacation rentable and which are not. Fines can be very high for those that don’t want to mind the vacation zoning rules; up to $1000 per day.
2) Are taxes and HOA dues higher in vacation rental condos than in non-vacation rentals?
The general answer is, yes. Taxes on a second home and income property are higher than a primary residence. To meet primary residency standards, you must prove you live on Maui no less than six months. In general, Home Owners Association (HOA) dues are higher as well because the maintenance costs are more for vacation rental units. For example, HOA dues in the Wailea area are an average of $1,000 a month and typically include your trash, water, yard maintenance and sometimes cable tv. Typically (but not always) this does not include your electric, tv, or internet.
3) What does it cost for a management company to rent my unit for me?
This one is hard to answer because it varies so much depending where you are on the island. In general though, management companies take anywhere from 25% – 45%. Remember, they are booking your unit, making sure people check in and check out on time, manage keys, broken light bulbs, towels, cleaning, linens, etc. Some complexes allow owners to manage their own units either through their own website or websites like VRBO, Home Away, and Airbnb. Owners can save a lot of money by managing a property themselves.
4) How can I get my family pet to the island?
I love this question because it’s of serious concern, takes a long time, and I know it from first hand experience! I had to go through this process when I moved my cocker spaniel all the way from Washington, D.C. to Maui years ago. The general answer is that it’s not the easiest thing to do in the world but it is possible. There are specific rules that the Agriculture department asks you to abide by. It’s for good reason. The state of Hawaii does not have ANY rabies, snakes, and they want to keep invasive species out. So suck it up, buttercup…follow the rules, and your pet will be running happily on the beach in no time! You can find more information here: The Hawaii Department of Agriculture
5) Which area is BEST to buy a second home in?
I also always love this question…because I can’t answer it! That is solely for you to decide. My recommendation is to visit Maui a few times before you buy and do as much research as you can. Do you love the sunny beaches of Kihei? Do you love the golf courses in Kapalua? Only YOU can answer those questions and pick your perfect spot on Maui.
6) What are the average prices in all of Maui?
According to Old Republic Title (an excellent escrow company here in Maui), here are 2016 numbers.
- Single Family Home Median Sales Price: $636,750
- Condominium Median Sales Price: $415,000
- Vacant Land Median Sales Price: $459,750
- 1,076 properties were purchased in 2016.
- The average days on market for 2016: 120
7) What are the average prices in Wailea/Makena for 2016?
- Single Family Home Median Sales Price: $2,400,000
- Condominium Median Sales Price: $1,230,000
- Vacant Land Median Sales Price: $$600,000
- Average days on market = 110
8) What are the average prices in Kihei for 2016?
- Single Family Home Median Sales Price: $$792,500
- Condominium Median Sales Price: $341,000
- No vacant land sales occurred in 2016 in Kihei
- Average days on market = 110
9) How much do I need for a down-payment and how much can I afford?
This seems to be ever-changing but some general guidelines apply here. For anything that is vacation-rentable, typically banks look for 25%-30% down. For primary homes, that are FHA approved you can typically find loans as low as 3.5% down. Some conventional loans will approve 5% down but include PMI on the loan for people that may want not want to go through the rigorous process of FHA approval and do not have a lot of “down money”.
In Maui, anything above $657,800 is considered a “Jumbo loan” and typically cannot be financed above that amount, especially for first time home-buyers. So, if you are a first time home-buyer with excellent credit, looking for anything in this price range when you’re first starting out is best. However, I always ask my clients to get pre-approved by a lender BEFORE you start the buying process. This causes less heart ache and gives you a more accurate picture of what you should be looking at and what you can truly afford.
10) Where is Maui at in the “Market”?
GREAT question. Anyone that asks me this, I know is a serious buyer. Only someone really considering purchasing a property would want to know about the market so they can decide if it’s a good deal or not. No one wants to lose money in the long run. Today is February 2, 2017 so if you read this article in five years…this information will not be current. For now, though we are in what’s called a “paper subdivision” climb. What does that mean?
Between 2005-2008, our real estate prices were at a high point in the market. And then we all know what happened between 2008 and 2010. CRASH! That was a terrible time for real estate, but a great time for flippers!
Well, the flippers have come and gone and are no longer. On Maui, you’ll be lucky to find an REO or Bank Owned property. We get maybe on average 1 every few months and they are typically listed at market price.
So, now we’ve moved into what’s called “paper subdivisions”, where new building projects are currently getting approved (on paper) and are selling out of trailers that you see around the island. Some of these right now include: Kalama Kai, Kihei Cove, Keala O Wailea, and there are a few neighborhoods in Pukalani. This is all great news! This means our market is going up!
What that means for buyers right now is that it’s A GREAT TIME TO BUY. Our prices haven’t quite reached the point where they were at between 2005 and 2006. And like in any market, the highs are always higher than the last high…so we’ve got some movement to go. Meaning, if you buy something now that is at or below the price it was in 2005, you’re likely to win. Plus, interest rates are still low.
So get out there and call me. Let me know what you’re looking for. We’ll find you a great deal!