PCS to Hawaii: What Active Duty Service Members Need to Know About Buying a Home

Relocating to Hawaii during a Permanent Change of Station (PCS) is both exciting and challenging. The idea of living in paradise is appealing, but navigating Hawaii’s real estate market requires careful planning. Property values are high, demand is strong, and the local market operates differently from those on the mainland.

If you’re considering buying a home in Hawaii, it’s important to approach the process with the right strategy. Having been stationed at Schofield Barracks, I’ve seen firsthand the opportunities Hawaii real estate can offer—if you know how to buy wisely. This guide will help you understand the market, the risks, and the benefits of purchasing a home in Hawaii with a VA loan.

Understanding the Hawaii Real Estate Market

Hawaii’s real estate market is unique, and there are two major misconceptions service members often have when considering a home purchase:

• Buying a home in Hawaii is always a guaranteed investment
• Hawaii is too expensive to buy into

Both of these assumptions can be costly mistakes if not approached correctly.

Real estate appreciation is not guaranteed. Many homeowners saw substantial gains from 2019 to 2020, but property values fluctuate. If you buy at the wrong time without a long-term plan, you could face financial losses.

Hawaii’s high costs don’t mean buying isn’t possible. While real estate is expensive, the cost of not buying could be even higher. With the right approach, homeownership can be a valuable long-term investment—especially if you factor in rental income potential.

The Case for Buying a Home in Hawaii

Here’s a real example: We purchased a home in Haleiwa in 2014 for $650,000 and sold it in 2021 for $1,140,000. We also own a multi-family home in Waialua, where rental income covers our mortgage and utilities, allowing us to live near the ocean at no cost.

This lifestyle is possible, but only if you buy with a strategy. If you purchase a move-in-ready home in a declining market, you may struggle to break even when it’s time to sell. However, if you buy a fixer-upper in a good neighborhood, you can increase the value and build equity over time.

Key Considerations for Buying a Home in Hawaii

If you’re thinking about buying a home when you PCS to Hawaii, here are three critical factors to keep in mind:

Have an Exit Strategy

• If you need to sell during a market downturn, you may not make a profit. Plan ahead by evaluating rental options and understanding the financial impact.

Buy Wisely

• Look for homes in good neighborhoods that need minor renovations rather than fully updated properties. This gives you instant equity and increases resale value.

Consider Rental Potential

• A home with a separate rental unit (like an ohana unit or a studio over the garage) can generate income and help offset mortgage costs.

The Reality of Renting Out Your Property

Many service members assume they can rent out their home if they PCS without selling. While this is true, most rental properties in Hawaii operate at a loss unless they have additional rental units.

Without separate rental space, you could lose between $500 and $1,500 per month after factoring in property management fees and Hawaii taxes.

Legal and Tax Considerations for Homeowners

Hawaii has two unique laws that significantly impact property owners:

Short-term vacation rentals are illegal on most of Oahu.

• Airbnb and VRBO rentals of less than 30 days are heavily restricted. New permits are not being issued, and violations can result in fines of up to $10,000 per day.

HARPTA Withholding Tax (7.25%)

• If you are not a Hawaii resident when you sell your home, 7.25% of the sale price will be withheld under the Hawaii Real Property Tax Act (HARPTA).
• This withholding can be waived or refunded under certain circumstances, but it requires proper planning and working with a real estate expert familiar with local laws.

Is Buying a Home in Hawaii the Right Move for You?

If you’re considering homeownership in Hawaii, planning ahead is essential. Ask yourself:

• Can I afford the mortgage even if I have to rent out the property later?
• Does this home have rental potential to help cover costs?
• Do I have a long-term exit strategy in case the market declines?

If you’re not sure, working with a real estate expert who understands military relocations in Hawaii can help you navigate the process with confidence.

Get Expert Help with Your PCS to Hawaii

If you’re moving to Oahu, my team has helped hundreds of military families navigate their PCS transitions. We’ve created a comprehensive PCS packet that includes:

• Information on military housing areas
• Details on command sponsorship
• Recommendations for restaurants, hikes, and activities
• A complete list of TLA-approved hotels
• A breakdown of Hawaii’s regions and best places to live
• A checklist of important paperwork for your move

If you’d like a copy, reach out today!

Frequently Asked Questions

1. Can I use a VA loan to buy a home in Hawaii? Yes, VA loans are widely used in Hawaii and offer benefits such as zero down payment and no private mortgage insurance (PMI).

2. Is buying a home in Hawaii a good investment? It can be, but it depends on market timing, location, and whether the property has rental potential.

3. What is HARPTA, and how does it affect me? HARPTA is a 7.25% tax withholding on the sale price of a home for non-Hawaii residents. It can often be waived or refunded with proper planning.

4. Can I rent out my home if I PCS? Yes, but without additional rental units, you may experience a monthly financial loss.

5. What are the risks of buying a home in Hawaii? Market fluctuations can impact resale value, and high property taxes can make owning a home expensive.

Final Thoughts

Buying a home in Hawaii during a PCS move can be a smart financial decision—but only if approached strategically. With the right property, rental potential, and a solid exit strategy, you can turn homeownership in Hawaii into a long-term asset.

If you’re considering buying a home in Hawaii, let’s talk! I can provide expert guidance, a PCS packet, and real estate insights to help you make the best decision for your future.

Related Hawaii PCS Guides

For more on making the move, see our overview of the military bases in Hawaii and our guide on whether active duty military should buy a home in Hawaii. Moving with animals means planning early, so read PCS to Hawaii with pets. Because Hawaii is an OCONUS move, our guide to what to do with your home when you PCS OCONUS is worth a look, and if you plan to finance, review the benefits of a VA loan.

To talk through your options on Oahu, you can connect with a VeteranPCS agent in Hawaii.