More Military means good news for Oahu Real Estate!

The army announced this week that they want to bring several thousand more soldiers to Schofield Army base, which is great news for everyone that owns real estate within 15 miles or so. There are already over 10,000 people working at and living at Schofield, and 2000-3000 new soldiers would greatly increase the need for housing in Mililani, Wahiawa, Royal Kunia, Kapolei, Waikele, and Ewa Beach.

Even those who are young enlisted guys can afford a nice condo in Mililani, and anything is better than living on base. The officers that come to Hawaii usually bring a good sized family with them, and a huge housing allowance around $3000. In Central Oahu, that’s plenty to buy a great house, especially in Royal Kunia.

Royal Kunia has a great back road access to Schofield that nobody else really travels. It’s about 20-25 minutes up Kunia road to Schofield, and the homes in Royal Kunia are great. Built after about 1995, all the homes in the area are nice and large, well built, and have a nice yard for the kids or dogs, or just lounging around.

Oahu has over 50,000 soldiers living here, and many of them buy homes and sell them a few years later for a great profit. With massive Hawaii basic housing allowances, the government is basically buying them homes here.

Right around Schofield there are some nice areas too. Mililani is one of Hawaii’s most desirable areas, with newer homes, older trees, and beautiful ocean and mountain views. Yes you can see the ocean from the center of Oahu, because it’s quite elevated.

In Mililani Mauka, you can buy a nice single family home for around $650k, and just one freeway exit north, you can get one for about $550k in Launani Valley, in Woodcreek. I recently sold 2 homes in Woodcreek that were both about that price, and both 4 bedrooms with a great little yard.

The military housing at Schofield is awful, so the opportunity to buy a home in nearby communities is a great option for anybody there. Now, the main point is that this is all very good for Oahu real estate in general.

Think about what would happen if just 5% of the 2000 new soldiers decided to buy a home here! That’s 100 new buyers in a market where only a few hundred homes sell each month on the entire island. Our market is greatly impacted by just a few new buyers.

If you’re coming to Oahu with the military, contact me and buy a home now!

Using VA above the conforming limit

Did you know that VA will allow you buy above the conforming limit of $625,500?

I was just told yesterday that you can buy a house over that amount, if you have 25% down on the amount over the limit. So if you are buying a house in Kailua for $700k, you just have to have 25% of the $74,500 by which you have exceeded the limit. In this case it would be $18,625.

Of course you'll have closing costs on top of that, so it's not quite as easy as the zero down VA loan which so many military families love. But if you want to live in one of the more expensive areas like Windward Oahu and Hawaii Kai, this option may be the best thing for you.

Usually, military families buy homes in cheaper areas like Mililani, Waikele, Royal Kunia, Kapolei, and Ewa Beach. But some of the higher ranking guys get a very nice housing allowance, which means they can afford the payment on a great house in either East Oahu or the Windward side. In that case, I would recommend either talking with Navy Federal credit union about their Veteran's Advantage program, or using the VA jumbo loan.

In places like Royal Kunia and Mililani, houses can be well over the VA loan limit, so having alternatives is important. A nice house in Mililani these days is running right around the $650k mark and looks like this.

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.