5 More Tips Canadians (or Any Foreign Buyer) Need to Know Before Buying Hawaii Property
Part one of this series talked about the first five things Canadians or other foreign buyers should know before buying real estate in Hawaii. It is actually fairly easy for a foreign buyer to purchase property, but if the buyer knows in advance what to look for, the process will be even smoother. In this part, the next five tips for buyers are presented.
Incredible tropical scenery is calling to many Canadians and other foreign buyers
So, here’s a look at the next 6 out of 10 things you should know before you buy:
6. You Can Obtain a Mortgage If You Live Outside the U.S.
If you are going to carry a mortgage on the property, you can obtain a mortgage if you live outside the U.S., but there are some special points to consider when getting a loan:
- You will need to work with a lender that is licensed in Hawaii. If you are getting a loan on a property here on the Big Island, experience teaches that it is best to work with a local lender. Ask your agent for some recommendations of lenders here on the island.
- You will have to pay a higher interest rate if you are a foreign buyer and you may have to put down up to 40%.
- All cash to close must be deposited into an existing U.S. bank account.
7. Your Closing Paperwork Will Have to be Notarized
This will mean either having it done in the U.S. or going to a U.S. Embassy in your country. Luckily, there are eight embassies located in Canada. If you need the location of one, here is a link with all embassies around the world.
8. Thinking of Using Your Property as a Vacation Rental?
There are 3 points you should know about renting your property out as a vacation rental:
- Not all islands are open to vacation rentals. Laws on short-term vacation rentals are set by the laws of the local county government, so be sure to check local laws before making an offer.
- Condos are very popular as a vacation rental, but some condo projects restrict the use as a vacation rental, so again check before putting in an offer.
- There are special Hawaii state taxes that apply to short-term rentals, such as a vacation rental.
Condos are very popular to use as a vacation rental, as this use leaves the condo open for “Snowbird” owner occupancy
9. What About Taxes?
And, on the subject of taxes, you should know that if you decide to sell the property, 2 special taxes come into play:
10. If You Stay Too Long, You Will Be Subject to Double Taxation
The number of days you spend living in Hawaii and enjoying paradise is restricted.
Can’t I just stay forever?
Happy House Hunting!
And, that’s the list of 10 things foreign buyers should be on the look out for when buying their special part of Hawaii. And, as you can see, nothing on the list is overly difficult, just something to work on in advance of your purchase. So, now you’re all set to go out and buy your Hawaiian dream property, eh?
If you have any questions about buying real estate in Hawaii, please contact us.