When buyers are looking for Hawaii properties, there is usually one thing they overlook – the association or HOA monthly fees of the property. When talking with a lender, especially one on the Mainland, you have to factor in the cost of the monthly association/HOA fees.
Often times, homes on the Mainland do not have a monthly fee. This is not the same for most properties in Hawaii. This applies to condos, townhouses, and many single family homes. The monthly fee can also dramatically differ from condo to condo or single family home communities.
Just for example, in Ewa Beach, you can have the same developer in different phases of communities have a wide range of monthly fees. For example, in Ka Makana at Hoakalei, the monthly fee is $211 for a single family home; the same development’s townhouses run $537.
It is also important to see what these monthly charges cover. Many older condos might have higher charges due to equipment replacement and reserve accounts needing to be higher in anticipation of the equipment end of life. For some properties or communities, it covers insurance, common area maintenance, or clubhouses. Some associations budget the fee to include cable, phone, internet, water, sewer, or a portion of a utility.
Something To Keep In Mind
In short, there is a wide range of charges and these can all impact your borrowing ability. Check with the lender and make sure when they tell you what you qualify to borrow that it includes that possible monthly association or HOA fee. Your limit may be much higher with a property that has no or a very low fee versus a possible full-service condo in Kakaako with full amenities that might lower your purchase price power.
This is when a good real estate agent comes in handy. We have the ability to see the charges and let you know what you are or possibly are not receiving with that monthly fee. It is possible that the same area has multiple communities that all have different fees.
If you would like more information on any of the above, please feel free to reach out and I can explain in more detail, or analyze a specific area or building on your behalf.