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 Post subject: Building a custom home in Kona ;) ???????
PostPosted: Mon Oct 12, 2015 4:36 pm 
Kama

Joined: Mon Oct 12, 2015 3:34 pm
Posts: 4
Aloha, I have bought a piece of paradise in kona and I'm sticker shocked. Why is building labor rates so high here? I know everything is shipped in here but I feel like building codes and the fact that people can charge what they want in a sense have made everything ultra pricy. Im planning on building a slightly higher end home with all nice finishes but only 2000 sf. Im in no hurry I will take years if needed. I just want to make sure I do things right and for the best possible price. Will need everything from start to Finnish. Any advise will be much appreciated! Mahalo - Big island Brett HA HA


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 Post subject: Re: Building a custom home in Kona ;) ???????
PostPosted: Tue Oct 13, 2015 7:21 am 
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bigbrettb wrote:
Aloha, I have bought a piece of paradise in kona and I'm sticker shocked. Why is building labor rates so high here? I know everything is shipped in here but I feel like building codes and the fact that people can charge what they want in a sense have made everything ultra pricy. Im planning on building a slightly higher end home with all nice finishes but only 2000 sf. Im in no hurry I will take years if needed. I just want to make sure I do things right and for the best possible price. Will need everything from start to Finnish. Any advise will be much appreciated! Mahalo - Big island Brett HA HA

Aloha Brett,

Welcome to the forum. Besides the cost of goods being much higher, you also have a lack of competition and an abundance of work on the island. There are other factors but basically that is the reason for the higher costs. Some of the other things may include the cost of doing business in Hawaii, the cost of paying off the building department, the political climate and maybe even the social climate. My advice to you is to get starts ASAP and to complete the home ASAP. The longer you wait and the longer you take the higher the cost to you. Prices can go up quite quickly over here and if the building boom continues the prices will continue to go up as well.



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 Post subject: Re: Building a custom home in Kona ;) ???????
PostPosted: Tue Oct 13, 2015 7:08 pm 
Malihini
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I agree with Dave and would also add that your only defense against high labor costs are DIY and networking.

DIY: in Hawaii, the more things you can do yourself, the better.

Networking: You need to get true "good guy" prices by finding tradesmen who can do you a favor and get one in return. If you are fresh off the boat, this is probably not going to happen. It takes time to establish relationships, and the quality tradesmen have all the work they can handle without advertising.

Good luck though!


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 Post subject: Re: Building a custom home in Kona ;) ???????
PostPosted: Wed Oct 14, 2015 5:56 am 
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Another suggestion would be to build a smaller, more basic home with only the features you need and none you don't. Most people who live on the island, basically live outside. Unless you have a very large family that you are housing I guarantee most of that 2000 sq ft is going to not be used much if at all. I currently live in a 3 bedroom 1,300 sq ft home. One bedroom I never use. The second bedroom is used as an office for my business but I could as easily use a portion of my living room for this purpose. Living small and living a basic lifestyle goes a long way here.

Good luck with your project and keep coming back and let us know how things are coming along with your home building.



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Dave Brilliant (S)
Real Estate Agent RS-77348
(808) 366-8714
Dave Brilliant
Proudly Serving Both Oahu and the Big Island!!!
Kona Ka'u Realty
75-143 Hualalai Road, B-205
Kailua-Kona, HI 96740

Da Kine Web Design
Pohue Bay
Kona Forum
Koko Head Shooting Complex
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 Post subject: Re: Building a custom home in Kona ;) ???????
PostPosted: Thu Oct 15, 2015 6:09 am 
Da Kine
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Location: Puget Sound
Also, try building the minimum house you need, but lay it out so that its easy to build an addition without looking odd. I know a couple of guys who have done this and are very happy with the results.



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 Post subject: Re: Building a custom home in Kona ;) ???????
PostPosted: Thu Oct 15, 2015 7:33 am 
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New Daddy wrote:
Also, try building the minimum house you need, but lay it out so that its easy to build an addition without looking odd. I know a couple of guys who have done this and are very happy with the results.

This is a good point. I am considering building on to my current home and it is going to be hard to match the existing.



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Dave Brilliant (S)
Real Estate Agent RS-77348
(808) 366-8714
Dave Brilliant
Proudly Serving Both Oahu and the Big Island!!!
Kona Ka'u Realty
75-143 Hualalai Road, B-205
Kailua-Kona, HI 96740

Da Kine Web Design
Pohue Bay
Kona Forum
Koko Head Shooting Complex
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 Post subject: Re: Building a custom home in Kona ;) ???????
PostPosted: Fri Oct 16, 2015 8:03 am 
Kama

Joined: Mon Oct 12, 2015 3:34 pm
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Mahalo, Well that is all good advice. I will take all that into consideration. Does anyone have experience vacation renting their property and if so did they make enough to justify the rental as a rental. It seems after I build and I won't be able to move for a few more years I can rent the home and at least cover most if not all the mortgage. thoughts? Brett


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 Post subject: Re: Building a custom home in Kona ;) ???????
PostPosted: Fri Oct 16, 2015 10:56 am 
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bigbrettb wrote:
Mahalo, Well that is all good advice. I will take all that into consideration. Does anyone have experience vacation renting their property and if so did they make enough to justify the rental as a rental. It seems after I build and I won't be able to move for a few more years I can rent the home and at least cover most if not all the mortgage. thoughts? Brett

Depending on your location and your pricing along with having a good management company it may be financially feasible for you. It is VERY expensive to rent out vacation rentals out here. For vacation rentals, not including your regular cost of wear and tear on your place, you will be paying a management company up to 50% to take care of the place and manage it for you. Then there is the 4% GET tax (Hawaii) and then there is the 9.25% TAT tax you will pay for the privilege of doing business in Hawaii. If you can gross $100k a year I would do it. But again, vacation rentals are a crap shoot in my opinion.

I rent my home in Ocean View on a permanent basis. I prefer to have a steady stream of lower income amount that is taxed lower than to risk getting larger sums here and there and having to pay an exorbitant amount of taxes. I pay my manager 10% a month and the GET Tax of 4% (Hawaii). The difference in taxes and fees is due to vacation rental compared to full time rental. Also, the renters I have in there take better care of the place since that is where they are living compared to vacation renters who really don't give a shit about your place.

What you might want to do is check out VRBO.com (Vacation Rentals By Owner) and see what a comparable place is renting for. But also check out how many places are competing against you as well. There might be a lot or there could be a few. The larger the place and the higher the price the less often it will be rented out and just sitting there. The hard part is trying to figure out if your house will be rented out 10%, 20%, 30% or 75% of the time.

The choice is yours as to what you want to do. I don't like to leave my house vacant for any long period of time. So long term renters is preferable to me. But vacation rentals can make you a lot of money. You have to weigh your choices. Let me know what you decide to do.



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Dave Brilliant (S)
Real Estate Agent RS-77348
(808) 366-8714
Dave Brilliant
Proudly Serving Both Oahu and the Big Island!!!
Kona Ka'u Realty
75-143 Hualalai Road, B-205
Kailua-Kona, HI 96740

Da Kine Web Design
Pohue Bay
Kona Forum
Koko Head Shooting Complex
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 Post subject: Re: Building a custom home in Kona ;) ???????
PostPosted: Mon Oct 19, 2015 2:47 pm 
Malihini
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bigbrettb wrote:
Mahalo, Well that is all good advice. I will take all that into consideration. Does anyone have experience vacation renting their property and if so did they make enough to justify the rental as a rental. It seems after I build and I won't be able to move for a few more years I can rent the home and at least cover most if not all the mortgage. thoughts? Brett
Make sure your property is zoned for transient (vacation) rentals. We learned the lesson in a hard way. All you need is one asshole neighbor -and it seems there are more of them here than anywhere else- to turn you in and you are screwed.



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