Financial Analysis

The Dream and Why it’s Important to Me

In my future, I plan to graduate college and work toward owning my own therapy practice. In my personal life, something I would consider to be a dream of mine would be to own a vacation home in Maui.  I could rent out the home while I’m not visiting and make a profit while also keeping it lived in.

I love Maui and visit when I can but the expenses of visiting can add up quickly. If I were to already have a home there, the planning to take a trip there would be simplified and easier to make a common occurrence.  This has always been a place my family liked to vacation and I would like to continue this tradition while also adding a new dynamic with having a home away from home in place.

How Others Accomplished the Same Dream

There is a lot of information and advice out there about buying a home in Maui; personal testimonies are less common to come by. When it comes to buying a home in Maui, key factors revolve around finding the right realtor, understanding the location and finance options, budgeting for what you can afford and buying at the right time.

When looking at realtors, it’s essential to research their past successful sales for situations and locations similar to yours. Specifically mentioned in Buying Maui Real Estate Tips, Dano Sayles Team (South Maui) and Maui Real Estate Team (North, Central or Upcountry) are recommended as the go-to realtors for Maui. It’s important to understand the location what’s nearby to offer to renters or for your own convenience when staying there. In addition, knowing what natural disasters are possible for your specific area as a preventative measure and for the right insurance steps to take is a very good idea. For instance, if the location is likely to be more affected by a tropical storm than other parts of the island, that should be taken into consideration when making renovations and choosing the right insurance packages.

For the finance options on the island, it should be known that local banks are the way to go as many mainland (what the states that aren’t Hawaii are called) banks are not available in Maui, such as Wells Fargo or Bank of America. When speaking to your local Hawaii realtor, it’s a good idea to listen to their financing advice as they will have a good idea as to who can offer the most efficient process.

Advice for budgeting revolves around taking all expenses into account, such as furnishing the house, making renovations, monthly mortgage payment that you can comfortably afford, down payment and closing costs. It is also mentioned that it’s important to stay within your budget and not be pressured into going over it in a bidding war for a house you really want as there will always be another home but not being able to afford a home you buy will lead to unnecessary stress and possibly losing the home anyway.

Barriers and Support Systems

The main obstacle to fulfilling this dream for me personally would be to actually stick to a savings plan without pulling out amounts here and there for other expenses. In addition, not being a full time local resident could affect the maintenance of the property.  I could hire a property manager to watch and maintain the home while I’m not there. To help myself stick to a savings plan, I could open a savings account with terms that prevent withdrawals before a specific amount is reached.

Current Finances

Budget for the Dream

Conclusion

In comparing the monthly discretionary amount with the savings plans for years 1, 2 and 3 above, either the buying with a romantic partner or buying with a friend would be feasible with a 3 year savings plan if my income and expenses were to remain the same.  

My income/expenses would be able to compensate the 3 year savings plan if I were to do this with another person and cut my costs in half.  If I wanted to do this alone, I would need to make adjustments; however, since this is not necessary, doing this with another person would be my first choice here.  I could decrease the amount needed for renovations by buying a newer home, doing research on the property and making sure the home will not be in immediate or dire need for upgrades.