Resort Condo Versus Single-Family Home – Costs to Maintain a Second Home in Hawai'i

NOTE: This post, originally written in August 2011, was updated in August 2016 to use currently listed properties as the examples. The conclusions remain the same.

One of the questions I’m asked most frequently by prospective buyers of Kohala Coast Resort condos is why the monthly dues seem so high. Wouldn’t the carrying costs be less if they simply bought a luxury home at Kohala By the Sea, or Bayview Estates in Kona?

The Maile floor plan at Villages at Mauna Lani has dues of $1,272/mo (MLS# 299162)

What’s Included in Resort Condo Monthly Dues

When you buy a resort condo in Hawai’i, there are costs paid collectively by the homeowners through your monthly dues that your condo association back home on the Mainland doesn’t need to address:

• Insurance might include hurricane, earthquake, and even flood/tsunami
• That lush tropical landscaping: the Kohala Coast gets 10 inches of annual rainfall, so you water like crazy to get it to grow, then pay an army of landscape workers to maintain it when it does

 
Of course, your monthly dues cover water, sewer, trash, security, property taxes on the common areas, exterior maintenance, and the condo pool and amenities.

Associations are also putting away substantial sums every year towards future capital expenditures to maintain your condo’s exterior and amenities in the condition they were in when you purchased. With annual reserve studies, the hope is that special assessments will be a thing of the past.

Your out-of-pocket costs for a condo will include:

• Property taxes on your unit. The website HawaiiPropertyTax.com shows current tax rates in different categories. (Will this be a second home, or are you going to be a full-time Big Island resident?) Second home owners in the resort should figure 1% of their purchase price in annual taxes.
• Electricity. Don’t forget, we pay some of the highest rates in the nation. Luckily, many resort owners find they are perfectly comfortable with ocean breezes and ceiling fans instead of air conditioning. $200-$500/month should do it depending on the size of condo you buy.
• Cable TV and Broadband Internet are essentials of modern life, even on vacation. Some condo communities include basic cable in the dues. Figure about $100/month for your package.
• Contents insurance depends on how valuable furnishings and art might be, and whether you rent when you aren’t using it yourself. Could be as little as $300 per year!
• You might need to pay a housekeeper or property manager to check on the condo when you aren’t using it, and clean before and after your visits.

Kauna’oa has amazing amenities. The paired homes like (MLS# 280826), offered for $3.2 million, are 3,122 – 3,577 sq. ft. with monthly dues of $2,250 for the amenities, $2,891-$3,302/mo. for the townhome, plus your chosen level of the Mauna Kea Resort Amenity Program

Shared amenities are handled differently at the different resorts. At Waikoloa Beach Resort, while you pay a small amount either through your HOA dues or directly, you are paying for security, roads, landscaping, and a bit towards maintenance of the beach at Anaehoomalu Bay. At Mauna Lani Resort, owners enjoy the Beach Club amenities. At Mauna Kea Resort, you will pay separately for one of three levels of recreational amenities offered in conjunction with the two hotels.

Monthly Costs For a Single-Family Home in a Gated Community

The monthly HOA (Home Owners Association) dues are lower for upscale gated communities than for resort condos, generally in the $200-$300/mo. range. Once a second-home buyer ventures beyond the Kohala Coast resorts, they typically consider homes for sale in nearby Kohala By the Sea and Kohala Ranch in North Kohala, or Keauhou Estates and Bayview Estates near Kailua-Kona.

One advantage to a single-family home is your own pool rather than the shared pool at a resort (MLS# 296751)

Your costs to maintain a 3,000 sq. ft. private home, in addition to your property taxes, might look like this:

• Insurance: $3,300 per year (almost $300/mo. versus $300/yr. in a condo). This is for a second home, and assuming you have a security system installed.
• Electricity: $500 plus or minus a month, unless you have photovoltaic…in which case it could be $20/month
• Pool service: $275/mo.
• Water on private system: $400/mo…in County water neighborhoods, could be $50/mo.
• Trash: $30/mo.
• Gardener: $350/mo.
• Cable/Internet/Phone: $100/mo.
• HOA dues: $260/mo.

Is it Cheaper to Own a Condo or a Single-Family Home in Hawai’i?

Let’s do the math, assuming you pay cash. The 2,714 sq. ft. Villages at Mauna Lani Maile floor plan (MLS# 276728) above is listed for $1,195,000. I come up with around $3,100/month in carrying costs, including property taxes and all the items above.

The 2,712 sq. ft. Kohala by the Sea home (MLS# 296751), whose pool is pictured above, is listed for $1,450,000 and has current property taxes of $10,394/yr., although yours could be higher depending on sales price, which will up the assessed valuation.

Using a second home tax rate, I come up with a total of $6,081/month in carrying costs, again including similar items except — and this is a big except — that this number does not include any contribution to a savings account for the day you need to replace the roof, freshen up your paint, or repair your pool. A condo association has to build reserves monthly.

Maybe the resort condo doesn’t look so expensive after all!

A hui hou,

Beth Thoma Robinson, R(B)
Direct: 808.443.4588
Email: beth@hawaiilife.com