According to the National Association or Realtors, the first step of the home buying process for forty-seven percent of home buyers was to search online. With Maui’s significant number of off island buyers, that number is substantially higher locally. Quirks of our MLS, a limited number of Post Offices on Maui and the relatively unique types of ownership in Hawaii can make the information displayed in online Maui real estate listings confusing or incomplete. Here are 4 things you should look out for when searching online for Maui Real Estate.

Figuring out the Exact Location of the Property Isn’t Always Easy

Our website and almost all real estate websites use what is called an Internet Data Exchange or IDX to display MLS listings. We use an underlying company called an IDX provider to package property data and photos into the listings you see displayed on our site. The IDX provider doesn’t just service Maui, they provide a similar service to real estate companies throughout the country. IDX providers use Zip codes as the primary means to identify the location of a listing. That works great in most areas where a town or city may have one or more zipcodes. It doesn’t work as well on Maui where zip codes can span across a large geographic area and cover multiple communities.

It’s easy to see how this can cause some confusion. This is especially the case in West Maui after the Lahaina fire. A significant portion of Lahaina Town’s residences burned. Those that were listed, but did not burn were subsequently withdrawn from the market. That said, a number of properties with a Lahaina address can be found listed for sale currently. The reason is that the Lahaina Zip code expands well beyond the fire area. West Maui runs from the small village of Olowalu down South all the way to Kapalua up to the North. All of this area falls under the Lahaina zipcode.

This challenge isn’t unique just to our site or other Maui Realtor sties. It is also true for bigger national real estate portals like Zillow and Redfin. It is evident with the screen captures that show a Lahaina address for a Kapalua Property on Zillow. You need to scroll deep within Zillow’s listing information or look at the associated map to find the Kapalua Location.

Again, West Maui isn’t the only part of the island with a Zip code that spans a big area. In South Maui, Makena and Wailea resort fall under the Kihei zipcode. Looking Upcountry, Makawao and Pukalani also share the same zipcode. All of East Maui including Hana, Nahiku, Kipahulu and Kaupo share a single zipcode. The coastal community of Ma’alaea and rural community of Kahakuloa fall under the Wailuku zipcode.

To help alleviate confusion in your search, look for the district on an IDX site or the specific location information within a portal site like Zillow. When using our site, you should note that we have community level searches available along the footer of our page. Of course, you are always welcome to send us a message if you remain unsure of a property’s exact location or need assistance honing in on a specific community.

How Much Land Area Does That Listing Really Have?

Land area is something else to keep an eye on when searching online for Maui real estate listings. There are a number of Maui listings where the area of land included with a property is less than what shows on the online listing. This stems from the growing frequency of Condominium Property Regimes (CPRs) also known as residential condominium listings.

A CPR is a type of ownership where portions of a single parcel of land may be sold off as separate units. The units have their own deed and tax map key. Each unit of a CPR can be mortgaged. In essence, this type of ownership applies the same principles of how an apartment building is turned into condos, and applies them to any piece of land that can have more than one structure. Since Residential Condo ownership isn’t common nationally, IDX providers and Real Estate Portals show the land area of the whole parcel of land and not the individual CPR unit.

For example, let’s take a two acre lot with a house and a cottage that goes through the CPR process. Unit A consists of the house and 1.5 acres of land. Unit B consists of the cottage and .5 acres of land. The underlying area of land with each unit is frequently called the limited common element. If unit B is listed for sale, most real estate sites will show the listing as having a full 2 acres rather than .5 acres of land. It doesn’t become readily apparent that it is really .5 acres until one reads about it in the detailed description of the listing.

Keep your eyes peeled for words like CPR, residential condo or limited common element in the listing description for lots and homes. That’s a pretty good clue that the land area is smaller than what is listed. A good listing description for a CPR property will specifically mention the limited common element or area of land associated with the listing. When in doubt, contact us and we would be happy to help you determine if the property is a CPR and how much land is included.

Listings Don’t Always Show All Monthly and Quarterly Fees

It goes without saying that determining the cost of ownership plays a big part in the typical search for real estate. That includes both the purchase price and any monthly fees associated with a property. There are a few types of properties on island where all monthly fees aren’t clearly spelled out in IDX and other online listings.

Leasehold condos are at the top of the list of properties that don’t show all monthly fees in their online listings. The monthly condo association fee is clearly listed, but the monthly and quarterly lease payments seldom make it on IDX sites. IDX providers use standardized display fields so they can work across markets across the country. With leasehold ownership less common, that field is omitted from most idx providers.

The monthly lease payment does show on Zillow, but good luck finding it and figuring out what it means. Deep in the bowels of the listing detail is a field called total actual rent. The way it is presented looks more like income than a fee.

Two other expenses that don’t always make it into an IDX feed are homeowner’s association fees and resort fees. There are a couple of fields in the MLS that cover homeowner association fees for single family homes. Depending on what field the listing agent uses, it may or may not show up on the IDX search results. Some of the resort areas also have quarterly resort fees. Those help to maintain landscaping in the resort as a whole. Since it isn’t a required field to list a property, some agents omit those fees when listing resort properties.

When inquiring about a condo, lot or a home located within a subdivision, it is worth asking if all fees are included on the MLS listing. Contact us if you have any questions.

Not All Condos Allow Vacation Rentals

A significant portion of people searching online for Maui condos for sale are looking for potential vacation rentals. Be aware that not all condos on island allow vacation rentals. Whether a condo allows vacation rentals isn’t always clear when looking at Maui listings online. There are no specific fields for vacation rentals on most IDX sites, and Zillow does not display whether a condo development allows vacations rentals.

If confused about whether a Maui condo that you are looking at can be vacation rented, here are a few things to look for. Focus on the remarks. Listing agents may mention the ability to vacation rent in the listing remarks. It is an attribute that agents will try to highlight.

Amenities and maintenance fee may also offer another clue. If there is no pool and the maintenance fees are comparatively lower, chances are that the development does not allow short term rentals. Most but not all condos that have more amenities and higher maintenance fees allow vacation rentals. There are some high end condos with numerous amenities that prohibit vacation rentals.

Last but not least, look at price. With the exception of a few leasehold condos, vacation rentals currently start over $600,000. Most condos below this price point, prohibit rentals. Again, It is also worth noting that not all high end condos allow vacation rentals.

When in doubt, ask us! We are happy to let you know what you can and can’t rent short term. Our Kihei, Wailea, Ka’anapali and Kapalua Condo listing pages also list which developments allow vacation rentals and which prohibit vacation rentals.

Last Thoughts

The points above should improve your experience when searching online for Maui Real Estate. MauiRealEstate.com offers the option to review inventory at a more granular level. We have listing pages at the community, condo development and neighborhood level. As mentioned above, we also welcome any chance to be of assistance and answer questions as they arise.

The County of Maui announced property tax rates for the upcoming 2023/2024 fiscal year. After a number of significant changes in both rates and classifications in recent years, the Mayor and County Council opted for more limited change for this coming fiscal year. The complete set of rates for the upcoming fiscal year can be found below.

2023/2024 Rates

Here are the updated rates for Maui County in 2023/2024. If there is any change in rates, last years rates are noted for reference. All rates shown below are per $1,000 of assessed value.

Owner Occupied

• Tier 1: up to $1,000,000 Formerly $2.00 now $1.90
• Tier 2: $1,000,001 to $3,000,000 Formerly $2.10 now $2.00
• Tier 3: more than $3,000,000 Formerly $2.71 now $2.75

Non Owner Occupied

• Tier 1: up to $1,000,000 Unchanged $5.85
• Tier 2: $1,000,001 to $4,500,000 Unchanged $8.00
• Tier 3: more than $4,500,000 Unchanged $12.50

Apartment

• Unchanged $3.50

Hotel and Resort

• Unchanged $11.75

Timeshare

• Unchanged $14.60

Short-Term Rental

• Tier 1: up to $1,000,000 Unchanged $11.85
• Tier 2: $1,000,001 to $3,000,000 Unchanged $11.85
• Tier 3: more than $3,000,000 Unchanged $11.85

Long-Term Rental

• Tier 1: up to $1,000,000 Unchanged $3.00
• Tier 2: $1,000,001 to $3,000,000 Unchanged $5.00
• Tier 3: more than $3,000,000 Unchanged $8.00

Agricultural

• Unchanged $5.74

Conservation

• Unchanged $6.43

Commercial

• Unchanged $6.05

Industrial

• Unchanged $7.05

Commercial Residential

• Unchanged $4.50

Check out the county’s description of different property type classifications if there is any confusion on what category your current property or future property might fit into.

Maui Homeowner and Long Term Rental Exemptions

If you have a primary residence on Maui or own a property that you rent long term, you may be eligible to reduce your tax bill. Under the homeowner (primary residence) exemption, residents are eligible for a $200,000 reduction on their assessed value. The long term rental exemption also provides a $200,000 reduction on the assessed value if your tenant has a year lease or longer. If you have a long term rental on the same property as your primary residence, you may be eligible for a $300,000 total reduction on your assessed value.

The deadline to file for the homeowner or long term rental exemptions for this coming fiscal year passed. If you file by the end of 2023, you would be eligible for the exemption and tax rate for the 2024/2025 fiscal year. Here is the link to the Long Term Rental Exemption and the Home Owner Exemption forms. The rules for eligibility for the homeowner exemption can be confusing. It is worth reading the county Exemption FAQ to better understand eligibility requirements.

Maui Property Tax Timelines

The new rates go into effect at the start of the new fiscal year on July 1st, 2023. Property taxes are due in two separate installments. The first installment is due in August 2023 with the second installment in February 2024. Owners should have received notification of their new assessed values in March of 2023.

After over a decade of collaboration between the community and the county, Maui County’s Planning Commission approved updates to the Special Management Area (SMA) and Shoreline Rules. The updates bring more balance and flexibility for homeowners, while also improving coastal resilience for the environment. On March 28, the Maui Planning Commission voted 8-0 to approve significant changes to the rules.

Maui County originally established SMA and Shoreline Rules in the early 1970s to create shoreline building setbacks in sensitive coastal areas. However, the existing setback formula only considered historical erosion rates and did not factor in worsening conditions due to sea level rise.

The updated SMA and Shoreline Rules reflect many years of work from the Maui County Planning Department, the Maui Planning Commission, and community working groups. The new rules incorporate the best available science on sea level rise to bolster coastal resilience. When the new rules take effect, the public will be able to access the shoreline map on the Planning department’s website. The department will also hold public outreach to inform and train residents on the changes.

Highlights of the New Rules

• Creates categorical exemptions, allowing people to bypass submitting an SMA assessment or permit application if proposed work has minimal to no environmental impact. For example, repairs and upgrades to the interior of homes, with a valuation of less than $500,000 in any 24-month period, within the special management area including the shoreline area are allowed, unless they are seeking expansion or intensifying the use.
• Removes the mandatory requirement of certified shoreline surveys, which cost thousands of dollars, and instead leaves the decision to the discretion of the department.
• Reduces the permitting burden for state-required conversion of cesspools.
• Requires hazard mitigation plans that consider realignment of structures away from the shoreline if existing structures are exposed to coastal hazards.

The new rules are more balanced and flexible for homeowners, while incorporating the best available science on sea level rise to bolster coastal resilience. This represents the second major update since 2003, with future reassessments based on erosion rates and the best science available planned every decade.

The SMA and Shoreline areas, managed by state and county laws, are the most sensitive parts of the coastal zone. The Special Management Area is the area of the island that is close to the shoreline, generally beginning at the shoreline and extending inland to the nearest highway. The Shoreline area is the land between the shoreline and the shoreline setback line.

The updated rules provide a foundation for further progress and a step forward in balancing the needs of homeowners and protecting the environment. The Hawaii Sea Level Rise Vulnerability and Adaptation Report, a guiding document for coastal planning around the state, urges people to plan for 3.2 feet of sea level rise now and adjust the projection upward in years to come. The updated SMA and Shoreline Rules represent a significant milestone for Maui County in addressing the challenges of coastal resilience and planning for the future.

This should also of course provide additional clarity for buyers interested in purchasing oceanfront land or remodeling or expanding on an existing oceanfront home.

Let’s be real. The increase in prices over the last couple of years combined with current interest rates makes the cost of home ownership as high as ever. New owners who are getting into the market are allocating a lot of their savings for down payment, and a significant chunk of income to their mortgage. With that in mind, it is important that you still keep some money in reserve for unexpected home expenses. The last thing we want to see is for your home ownership become a true financial hardship. Here are five big ticket expenses to look out for:

1. Roof repair: Hawaii’s climate is warm and humid, which can cause damage to the roof over time. The sun’s UV rays can cause the roof’s material to deteriorate, while heavy rains and winds can damage shingles or cause leaks. Regular roof maintenance and repair are crucial to preventing costly damage.
2. Appliance Repair and Replacement: In the last seven years, I’ve replaced one dishwasher, repaired a refrigerator and repaired our range twice. When the appliance repairman came to fix the refrigerator, he said appliances just flat out deteriorate faster on Maui. Maybe it is salt air, maybe it is something else. Just expect your appliances to wear out faster than you expect. As an added tip, some brands are harder to repair than others. The same repairman recommended GE and Kenmore.
3. Plumbing issues: Water damage from leaky pipes, clogged drains, or malfunctioning fixtures can lead to costly repairs. Regular plumbing maintenance and addressing issues promptly can prevent more extensive damage and expenses.
4. Septic and Cesspool Issues: Not all areas of Maui include sewer services. A number of homes on island rely upon septic systems or even older cesspools. These waste management systems require both maintenance and care when it comes to inputs. Poorly maintained septic systems can fail. Cesspools can fail due to improper maintenance or old age. Replacement of cess pools and septic systems is expensive!
5. Wood damage: The local climate can beat up on wood siding and trim. Our climate is conducive to dry rot. Homeowners should definitely monitor siding for dry rot particularly on the sides of the house exposed to the prevailing weather. It’s better to repair and replace dry rot before it spreads. Of course, Maui’s climate is also hospitable to termites. While many newer homes use termite treated lumber, it is still possible to get wood boring insects in trim and cabinetry. Inspection and even periodic tenting may be necessary.

Home inspection during the purchase process can help identify potential issues and near term maintenance items. That said, no home inspection is perfect, and things like appliance issues can pop up pretty quickly. Other things like septic systems and cess pools are outside the scope of traditional home inspections. We advise clients to do a septic or cess pool inspection in addition to the regular home inspection. Regardless of the extent of your mitigate efforts, it is important to keep cash reserves for those unexpected maintenance issues.

Three months into the year and interest rates continue to fluctuate. In January it seemed like rates were heading downward steadily. February saw an increase in rates. The banking crisis earlier this month caused rates to adjust downward again. Last year, there was a lot of ink spilled and key strokes dedicated to predicting rates. Most predictions proved to be wrong. At this point, prognostication on rates seems like a fool’s errand. That said, I wanted to talk about one of the better bellwethers for mortgage rates, the ten year treasury bond.

In the financial world, a bellwether is an indicator of something bigger. For the bond market, the ten-year Treasury bond is the go-to indicator of how things are going. When investors are feeling good about the economy, they tend to buy more bonds, which drives down the yield (i.e., interest rate) on the ten-year Treasury bond. Conversely, when things are looking a bit shaky, investors tend to flock to the safety of Treasury bonds, which drives up the yield.

So, what does all of this have to do with mortgage rates? Well, the yield on the ten-year Treasury bond is a key indicator of where mortgage rates are headed. When the yield on the ten-year Treasury bond goes up, so do mortgage rates. When the yield goes down, mortgage rates tend to follow suit.

Think of it like a game of follow the leader, but with money. When the leader (the ten-year Treasury bond) goes up, the followers (mortgage rates) try to keep up. And when the leader goes down, the followers slow down too.

What Does This Mean for Buyers?

Consider this as more of how does this work vs a how to post. I’ve read in some places that following the ten year treasury closely may give buyers a sense of when to lock their mortgage rate. I have to say, I am a little skeptical about that. While the two are closely correlated, there may not be enough lag between the change in treasury bond yields and the change in mortgage rates. It’s a pretty busy world out there and unless you work in finance, you also may not have the time to closely monitor treasuries. This is where I would lean on a knowledgeable mortgage professional rather than tracking things yourself. Let your mortgage professional give you guidance on when to lock your rate.

The scarlet letter of Hawaii Real Estate isn’t A. It’s the letters LH. Seeing the land tenure leasehold on a listing causes many buyers, and agents for that matter, to bypass a property. Just as the puritans wrongly ostracized Hester Prynne, leasehold properties don’t deserve to be shunned. For the right buyers, leasehold ownership provides a great opportunity. This is particularly the case in an era when inventory and options remain limited.

Lower Acquisition Costs

First and foremost, it’s worth highlighting the biggest advantage of leasehold. Acquisition cost. Leasehold properties cost significantly less than comparable fee simple properties. Plain and simple, you get more bang for your buck. Higher monthly fees are the tradeoff for lower acquisition costs. In addition to the maintenance fee, leasehold properties come with a monthly lease fee. If you have less cash in reserve for your purchase, but strong monthly income, leasehold could be an interesting option.

A Few Other Things To Consider With Leasehold

There are some other factors that can enhance the appeal of a leasehold property.

• Does the property offer something unique? There are a handful of leasehold properties that offer something unique or at least less common in the Maui market. Alaeloa is a truly one of a kind development in the Napili area. The combination of low density, a beautiful shoreline and the mix of stand alone and duplexed beach cottages is unlike anything else on Maui. Maui Eldorado in Ka’anapali has its fantastic beach cabana. Kamaole Nalu is one of a handful of direct beachfront condos in South Kihei.

• Does it have a longer lease term? A longer term lease is particularly appealing. It takes away uncertainty about the future of your property and it opens financing options. If it is in excess of 35 years, it allows for a conventional 30 year mortgage. More than twenty years left on a lease means you can get a fifteen year mortgages. You need five more years on the lease than the term of the mortgage to get financing. Once a lease term shrinks to less than 20 years, both the smaller pool of buyers and increased uncertainty may impact resale value.

• Can it be converted to fee simple? In some cases, the lessor shows a willingness to convert the property to fee simple. That could enhance the condos value over the long term. The caveat here is that fee conversion costs money. In almost all cases, the financial outlay for lessees is significant. Typically, somewhere in the six figures significant.

Discover New Options

Again, leasehold isn’t for everyone and not all leasehold is the same. It requires some extra due diligence and there is a reason that leasehold properties come with their own unique disclosures. That said, there are some great leasehold properties on Maui and that list extends beyond the three developments referenced above. Don’t stigmatize a condo just because of its land tenure. Any condo on island whether its leasehold or fee simple is going to have its strengths and its weaknesses. If you evaluate the condo development on the plusses and minuses as a whole, you might just find leasehold fits your needs. We look forward to assisting you with the evaluation process.