Akoko Hoopili New Release

Usually 5% return on cap rate is already considered pretty good on Oahu. For those looking for higher return, it might be quite difficult. If you have a million dollar and would like to get better rental return, you can consider buying 2 properties instead of 1 property to product a better rental return. However if you are looking for a comfortable home for your future use, you may want to get a higher price home for personal enjoyment because in that case you are not just looking for rental return.

Here is the breakdown of what Oahu looks like. East Oahu is the most populated area. So where would you like to live? Hawaii Real Estate

Many have asked that if the interest rate keep going up this year, wouldn't it affect the home price eventually? I think last time we discussed about the demand and supply as related to the interest rate on Oahu in particular. We said that because the demand remains high while supply remains low, the price of the home will not have too drastic impact due to interest rate. Now let's look at another scenario as seen on the picture at the right hand side. A house that is priced about 300K if you buy at 3.25% interest rate with 20% down payment, your monthly payment would be around 1044 USD. In the length of 30 yrs loan you will be paying $375842. Let's then see what happen if you wait to buy when the interest rate goes up to 5% and the listing price drops to 289K. You will be paying $1242 monthly and for 30 yrs you will be paying $447.120. So as you can see, if you wait to purchase a home at a higher interest rate, even though the listing price is lowered, you will still end up paying much more than you would now. The cost for waiting in this case is $71278.