Thank you all so much for your great answers. I was just idly dreaming about the islands when I wrote this, but now I'm thinking about a blog post on the same subject, only with more areas than Kauai. I will be posting more questions soon, gathering info for the blog post.
thanks

Aloha Mike

Everything Jayney explained to you is very important. Like she suggested, my first piece of advice would be to speak with a lender and determine how much you can qualify for, what kind of payments you can afford, etc. Both Wells Fargo and American Savings Bank have offices on Kauai. If you'd like the names of representatives in those offices, let me know and I'll be happy to provide them. You can also visit http://kauaihawaii-realestate.com/kauairesources.html where you'll find the names a few Kauai lenders along with other helpful information.

If you're interested in owning a property that you'll use as a vacation rental, you need to be aware of Kauai's latest ordinance (#864) regarding vacation rentals. You can find that information at http://kauai.gov/ (look under "What's New" for "Transient Vacation Rental Application" and you should also visit the site for the "Kauai Alternative Vacation Accomodation Association" at http://www.kavaassociation.org/

To the best of my knowledge, this ordinance says you can vacation rent your property if it's in one of the Visitor Destination Areas (VDA) on Kauai (i.e. Poipu, Princeville, part of Kapaa known as the "Coconut Coast"). If the property is not in the VDA, and is currently a vacation rental, current owners have to apply for a non-conforming use permit BEFORE October 15, 2008. If they're approved for the permit, they can continue to vacation rent their home (and a new owner could continue). They have to renew their permit each year. If the property you buy is outside the VDA and has never been a vacation rental then, you'll be out of luck in trying to vacation rent it. Also, homes that are on agricultural land (unless they were built before 1976, I believe that's the year, but check the ordinance) do not qualify to be vacation rentals any longer.

For those properties (condos, homes) that are in the Visitor Destination Area, the owner has to register the unit as a vacation rental but does not have to apply for a non conforming use permit.

So, I know that's a lot to absorb, but if you're considering buying & vacation rentaling a home or condo on Kauai, you need to be aware of this important change (the revised ordinance was signed in March 2008). Check out the web sites I suggested. If you're considering a property and don't know if it's in the Visitor Destination Area, you may call the Planning Dept. at (808) 241 6677 or the Real Property Assessment office at (808) 241 6222.

Hope you find this helpful and have a great day.
Debra

Debra A. Jason, RA, ABR
When paradise is calling you, call me!
Vision Realty All Islands Kauai http://www.kauaihawaii-realestate.com

Aloha Mike,

These islands do get under your skin! Moving here is a huge undertaking, with many angles to consider. I agree with Patrick, choose your island first, then you need to find a good realtor and a good lender. Finding a good lender right now is more difficult than finding a good realtor. With the current financial mess going on nationally with home loans, you really need to sit down with a local lender, American Savings Bank and Wells Fargo are both very good and understand the challenges of lending here. They will analyze your income level and be able to best advise you as to what you can honestly afford to purchase here in Hawaii. The guidelines have really tightened up across the country, but with decent credit and a down payment set aside, you should be able to realize your dream of Hawaiian homeownership. Let the lender recommend to you a price range that will work with your budget. They know best right now how to proceed in these challenging times. Guidelines and new issues are cropping up on a daily basis. There are several options open to you that the a good local lender will be on top of.

That being said, Its a great time to buy in Hawaii, prices are TERRIFIC right now! There is ample inventory statewide of really fine homes in all price ranges. Another option you may want to consider is purchasing a condominium and going into the rental pool at that complex. Look for units that have a good solid rental history. That way the rentals help offset the costs of your mortgage, taxes and HOA maintenance fees. Keep the weeks out of the year that you want for yourself and rent it the rest of the time. There are excellent property management firms available or you could consider VRBO (Vacation Rental By Owner) that many owners have very good success with.

If you decide to have a look at the Big Island, I'd love to help you out! And if you do make the move, email me privately and I'll send you a link to my "Moving to Hawaii Toolbar". It has all the links you need to make a successful and painless move here: shippers, freight, utilities, media, pets, banks, airports, etc.

Good Luck and let us know how it all turns out!!

Mahalo,

Jayney Sharpe

As a person who moved 6,000 miles to get here, I completely understand. Every visit I made to the islands made me love this place more and more and it made going back to the Jersey shore more difficult every time. Finally my family made the move. We made our move based on affordability and I think I found the best place on Earth. As far a second home, choose your island, choose your dollar figure and go from there. Use an agent who is in the area you choose. If you find yourself interested in the Big Island, check out my site. http://www.patrickjlambert.com