Military buyers - You should buy a home in Hawaii, but you need just a little more than just your BAH

There are over 50,000 military personel in Oahu, most of whom are stationed here for about 3 years at a time. The minimum Basic Allowance for Housing (BAH) all military personel get is $1925/mo as an E1, all the way up to $3419 if you're an O7. At E1 paygrade, you're likely to get a small condo.


For 2007, the Hawaii BAH rates for military with dependents are

• E1-E4 $1925


• E5 $2035


• E6 $2412


• E7 $2553


• E8 $2584


• E9 $2892

For officers:

• O1 $2286


• O2 $2305


• O3 $2668


• O4 $2938


• O5 $3352


• O6 $3380


• O7 $3419

Also in Hawaii, the military pays overseas COLA (cost of living allowance) which can often be around $600-1000/month.


Since the BAH is non taxable, using it buy a house is like double dipping with the government. They give you tax free income and you use it to buy something that gives you a tax deduction on the rest of your income.

No matter what your BAH in Hawaii is, and whether you have dependents or not, and even if you have 20+ years of service, you're most likely going to use a little more than just your BAH to buy a house in Oahu. That's because prices in Hawaii have grown a lot faster than the BAH rates have.

But don't be discouraged, you can definitely buy something. For single people, it's common to buy a home for as much as you can possibly qualify for, and then rent out a room or two. Rooms rent for about $700-1000/month. I've also seen young guys get together and buy a house together, pooling their BAH so they all get some profit when selling. This usually works great if you know people on your post, but that's uncommon.

Every military family that I have worked with has made money on their home. I've handed people as much as $150,000 when they leave Hawaii, and while there is no guaranty for the future, the market certainly has been great up til now. Even if your home value is flat the entire time you're here, you've received a huge tax write off and hopefully you will have paid down your mortgage enough to have some equity.

If you're coming to Hawaii in the military, you should be buying real estate.