Is Buying a Home in Hawaii Smart for Active Duty Military?

You just got orders to paradise—Hawaii. The beaches, the sunsets, the endless supply of poke (pronounced “po-kay”). But before you start dreaming of backyard luaus, there’s a big question you’re probably asking: Should I buy a home here?

For active duty military, buying a home while stationed in Hawaii can be both exciting and overwhelming. Here’s the deal: Hawaii’s real estate market is unique. Prices are high, the market moves fast, and the cost of living can catch you off guard. But with a VA loan and some strategic planning, owning a piece of paradise can be a smart financial move.

The Pros

1. Building Equity: Instead of throwing money away on rent, you’re putting it back into your pocket. Hawaii’s market tends to appreciate over time, so it could be a win. Historically, the median sales price of homes doubles every 11-15 years.
   
2. VA Loan Perks: No down payment? No private mortgage insurance (PMI)? Lower fees.  Lower rates. That’s huge in Hawaii’s high-cost market.
   
   
3. Rental Potential: If you PCS (Permanent Change of Station) later, your home could become a cash-flowing rental property. Time is your best friend here!  The longer you own your home, the more passive income and appreciation you will get. 
   
   
4. Tax Benefits of Home Ownership:  Your BAH is tax-free money the government is giving you for housing.  That is nearly $50K per year, tax-free, in housing income. When you buy, the interest you pay is deductible from your income at the end of the year.  You get zero tax benefits for renting.  If you pay a funding fee (which gets rolled into the loan), that is deductible in the first year, as well.
   
   
5. The military drives the economy in Oahu.  All services are in Oahu.  There are four 4-star commands with their staffs.  The largest employer in the state is the shipyard. What this means for a buyer is there is always movement in the market and a turnover of population. Inventory on island is in short supply.  It is hard to buy a home but it is even harder to rent a home.  If you have a pet, it is even more expensive to rent.

The Challenges

1. High Costs: Homes in Hawaii don’t come cheap. Even with a VA loan, you’ll want to crunch the numbers to make sure it’s sustainable.  
   
   
2. Homes are Smaller:  Unrealistic expectations on what you can buy will derail your search.  For most, remember, this is not your forever home but if you play it right, it could help you get that forever home in the future.  Don’t let your large bedroom furniture dictate whether you should buy a home!  Put it in storage.
   
   
3. PCS Risks: If you get stationed elsewhere before the market appreciates, you might face a tough decision about selling or renting.  In general, if you are going to be stationed in Hawaii for less than 3 years, buying a home is risky.  Get with a lender and run your numbers.
   
   
4. HOA Fees and Maintenance: Hawaii’s natural beauty comes with extra upkeep—think saltwater damage and higher HOA fees.

So, What’s the Verdict?

For military families, buying a home in Hawaii can be a great investment if you plan wisely.

Work with a knowledgeable real estate agent and lender, lean on your VA loan benefits, and be realistic about your budget and future plans.

It’s not just about buying a house; it’s about creating stability for your family—whether it’s for a few years or a lifetime.