Making the Leap from Renting to Owning

Condo Living

Living in a condominium complex offers many benefits. In Waikoloa Village on the Big Island of Hawaii, you can enjoy lush, tropical foliage without lifting a finger. The small-town community is well planned, with all of the condominium complexes bordering the 18-hole Robert Trent Jones, Jr. Golf Course.

Home Ownership

Making the leap from renting to owning can be daunting. YES! A condominium can be a HOME! Every situation is unique, but it is almost always better to own than rent, but what about owning a condo? Two major hurdles to making the leap are:

  1. Saving up a down payment
  2. Qualifying for a mortgage

In Waikoloa Village, the median price for the past 60 days for a Single Family Residence (SFR) was $518,500. 17 out of 50 sold for less than $500K.

With a 5% down payment, at 5% interest, the monthly payment would be about $3,000.

Median Sale $518,500
5% Down $25,925
Mortgage $492,575


Principal * $592
Interest * $2,052
Taxes $216
Insurance $38
WVA HOA Fees $68
Total Monthly PMT $2,966

For condos in the same time-frame, median sales price was $262,500. 10 out of 22 sold for less than $250K.

With a 5% down payment, at 5% interest, the monthly payment would be about $2,000.

Median Sale $262,500
5% Down $13,125
Mortgage $249,375
Principal * $301
Interest * $1,039
Taxes $109
Insurance $20
WVA HOA Fees $68
Condo HOA Fees $500
Total Monthly PMT $2,037

*Principal and interest noted are for the first month. With each payment, the interest goes down, and the principal goes up. The PRINCIPAL reduces the loan amount each month. This is one of the most powerful differences in owning vs. renting.

Buying a Condo Still Saves!

The condos in this study rent for about $2,300 per month unfurnished. For this comparison, the benefit of owning a condo vs. renting provides a gain of about $550 per month ($250 per month lower payment plus $300 in principal the first month). It is very interesting that the data landed with a purchase price for the condos at very close to half of the SFR’s, and the monthly payment is about two-thirds. The reason the payment is not half is those pesky HOA fees. You might have noticed the “WVA HOA Fee.” Yes, some neighborhoods also have fees. Everyone in Waikoloa Villages pays an HOA, including condominium owners.

Condo HOA Fees

Where do they go? Almost without exception, the first objection to owning a condo is, “I don’t want to pay HOA fees.” Well, if you don’t pay into an HOA…you ARE the HOA.

The chart below shows where the money goes for a typical Waikoloa Village condominium complex (for reference only).

Swimming Pools

Did I mention pools?

6 out of 7 of the condominium complexes in this study have their own swimming pools. Many have fitness centers, clubhouses, and gathering areas including community BBQs.

Only 2 of the 50 SFRs have their own swimming pool.

If your goal is to own your own home, a Single Family Residence, but the down payment and monthly payment is out of reach, perhaps buying a condo could be your next big step in achieving that goal.

Financial Benefits of Owning a Condo

  • Lower overall monthly payment.
  • Building equity by paying down your mortgage every month (principal).
  • Growth in the value of real estate over time (appreciation).
  • Landscape maintenance and tree trimming costs, as well as exterior maintenance including repairs of the roof, gutters, regular paint, stairways, lighting, etc. are covered by most HOAs.

About Waikoloa Village

Waikoloa Village is a small-town community 7 miles mauka of Waikoloa Beach Resort — home to world-class shopping, dining, beaches, and resorts. It takes about 15 minutes to drive to the resort. The aforementioned $68 per month HOA fee goes to maintain amenities such as community pool, tennis courts, and the golf course. Members and their guests receive discounted green fees. ALL of the condominium complexes in this study border the golf course with views of the course, ocean, and mountains. Most condos have one or two of the outstanding view features. There are a few rare units with views of the ocean, golf course, AND ALL FIVE PEAKS! The five peaks that can be seen from much of the Village are Maui, Kohala, Mauna Kea, Mauna Loa, and Hualalai.

If reading this blog makes an impossible dream of owning your own piece of paradise seem possible and attainable, I am at your service!

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Heidi Bogert

August 24, 2018

Great article John! Really succinct and understandable. It’s not as far out of reach as people think!
Have a nice weekend.

John Kennedy

August 27, 2018

> Thanks Heidi! Teamwork makes the Dreamwork.

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