How to Buy a Vacation Home in Big Island, Hawaii

How to Buy a Vacation Home on the Big Island, Hawaii

Owning a second home in Hawaii conjures visions of turquoise waters, lush tropical landscapes and dramatic volcanic backdrops. The Big Island, officially named Hawaii Island and the largest in the archipelago, offers ever-changing terrain and a rich sense of natural wonder, where white sandy beaches meet stark black lava fields. The island’s cultural heritage makes it one of Hawaii’s most intriguing destinations.

The dream of a vacation home here comes with practical realities: ongoing maintenance, security concerns, and significant property taxes. In this guide, we’ll walk you through the real estate landscape on the Big Island, outline the step-by-step process for purchasing a second home, and break down the financial considerations and lifestyle benefits involved in buying Big Island vacation homes.

(To get a sense of what life here can look like, explore our guide, Three Perfect Days on the Big Island!)

Top Reasons to Buy a Vacation Home on the Big Island

For affluent buyers exploring vacation homes on the Big Island, this island offers a rare blend of natural beauty, privacy, lifestyle diversity and understated luxury. Owning a vacation home here is more than a real estate investment; it’s a lifestyle investment with many perks unique to Hawaii.

Diverse Climate: As the largest and most ecologically diverse of the Hawaiian Islands, it’s home to 10 of the world’s 14 climate zones. In a single day, you can experience the lush rainforests in Hilo, the sunny, dry coastlines of Kona, and even chilly snow-capped volcanic peaks. Most island vacation homes are limited to only one or two climate zones, making the Big Island appealingly unique in this sense.
Gorgeous Scenery: Embodying a naturally luxurious feeling, the Big Island features vast green open fields, pristine beaches, soaring mountains, cascading waterfalls, dramatic lava flows, spectacular sunsets, and rich tropical landscapes.
Fewer Crowds: Compared to some of its sister islands like Oahu and Maui, the Big Island’s lower population density preserves a sense of stillness and seclusion, allowing for a more peaceful experience with fewer crowds.
Laidback, yet Luxurious, Adventurous Lifestyle: The island’s natural beauty fosters a laidback lifestyle embraced by both travelers and locals. This is a place where wellness meets wonder. Whether you’re decompressing on a secluded beach or hiking through Volcanoes National Park, the island invites you to slow down and reconnect. Think swimming beneath waterfalls, whale watching, playing world-class golf, snorkeling with manta rays, stargazing from the observatory or enjoying gourmet cuisine at one of the island’s many fine dining restaurants.
Vibrant, Rich Culture: The Big Island played a significant role during the 1800s when one of its legendary residents, King Kamehameha I, united all the Hawaiian islands into one royal kingdom and governed it from Hilo. This island is like a living museum, with multiple historical and culturally significant sites to visit, like fishponds, petroglyphs, temples and parks.
Increasing Property Values and Rental Income Potential: The Big Island’s real estate market remains strong, and homes here often appreciate, yielding significant returns. Hawaii is an enormously popular vacation destination, so if you’re planning to rent out your second home, the rental income potential is high.

Big Island Real Estate Snapshot: Best Neighborhoods

From mountainside residences to beachfront villas, vacation homes on the Big Island boast unrivalled privacy and exclusivity, while still offering impressive access to Hawaii’s incredibly diverse geography. You can find small communities on the Big Island’s southern and northern coasts, but we’ll focus on the two most popular regions for vacation homes:

West Coast: Kohala Coast and Kailua-Kona Region

West coast areas like Kailua-Kona, the Kohala Coast, Hualalai, Mauna Lani, Hapuna and Kukio are especially in demand due to the sunny year-round weather. Kona means “dry side” or “leeward” in Hawaiian, and much of the Big Island’s population lives in this region. The south end of Kona is known for its quaint coffee plantations and the town of Captain Cook, where the legendary sea captain made landfall in 1778 and was killed a year later. The island’s largest airport, Kona International Airport, lies here and provides easy access to the region.

The Kohala Coast, north of the airport, offers a plethora of luxury vacation and resort communities along the beach or overlooking golf courses. Demands for luxury are resulting in many homes with high-end amenities and sleek, modern architecture.

East Coast: Hilo Region

Hilo, located on the “wet” or “windward” side of the island, has the island’s second-largest population and serves as the island’s capital. Lush and tropical due to high rainfall amounts, Hilo is home to the University of Hawaii at Hilo and the island’s second-largest airport. In downtown Hilo, you’ll find shops, galleries and vintage Hawaiian gifts and souvenirs. Hilo’s real estate market may appeal to buyers looking for hidden gems, tucked away in the region’s abundant greenery. This area is experiencing growth, so investing here could yield attractive long-term capital appreciation and rental income opportunities.

Steps to Buying a Vacation Home on the Big Island

As with any real estate investment, you’ll want to work with trusted local partners who understand the island’s processes, fees and legal considerations.

Consider your needs and desires: The Big Island offers a wide range of vacation homes, from modest condo complexes to quaint single-family cottages, oceanfront villas, golf course communities, and mountainside estates. Of course, your budget will be a factor, but also consider how much space and which amenities are nice-to-have vs. must-have. Your needs may be different depending on whether you’re buying the home for personal use only or planning to rent it.
Secure financing: Unless you’re paying cash, it’s best to get pre-approved for a mortgage. This will speed up the buying process, and you’ll have a clear understanding of what you can afford. You might do better working with a local lender who understands the island’s unique risks and investment potential.
Hire a local real estate agent: The Big Island vacation home real estate market has many niche neighborhoods and communities. Work with an experienced real estate agent who understands these nuances, as well as local restrictions, zoning, and potential risks such as lava or tsunami zones.
Make an offer: Your agent will help you determine a fair but competitive offer, typically through a Purchase Contract that clearly defines details. Most buyers include an earnest money deposit of about 1% to 3% of the purchase price, which makes the offer more attractive and demonstrates the buyer’s firm intention to the seller. The earnest money remains in escrow until the home sale is final.
Conduct due diligence: Hire an attorney to research the property and community. Review HOA or community rules, particularly in gated areas where rentals or renovations might be restricted. Check zoning laws and pay attention to hazard zones, as properties within these higher-risk areas often face stricter building codes and limited insurance options. You’ll also want to have the home inspected and appraised to ensure there are no potential issues.
Close the deal: Expect the entire closing process to take 30 to 45 days. Unlike on the mainland, state laws here prohibit closing and signing on the same day, so this part of the process typically takes two days. You’ll pay closing costs such as title insurance, lending fees, and taxes, typically around 1% to 4% of the purchase price.

Big Island Vacation Home Ongoing Ownership Costs & Management Considerations

Owning a vacation home in Hawaii comes with ongoing costs and some hidden responsibilities that you’ll need to consider:

Taxes and insurance: Be prepared to pay property taxes and insurance, which can be high depending on the home’s exposure to risks such as lava flows, tsunamis, and hurricanes.
Utilities: You’ll need to pay for gas, water, electricity, and WiFi, even when you’re not using the home. Utilities tend to be higher here than on the mainland, particularly electricity.
HOA fees: Most planned communities and condos charge HOA fees that cover maintenance, landscaping and security around the property.
Property management fees: Even in a planned community with HOA fees, you will need to hire a property manager to help with maintenance and housekeeping within your home. Plan for seasonal maintenance and potential repairs, especially in risk-prone areas.
Local permits and tourism registry fees: If you rent your home, be aware of short-term rental restrictions and be prepared to pay for local permits and taxes.

These hidden costs and responsibilities can offset the joy of owning a Big Island vacation home. For examples of beautiful, luxury homes in well-managed communities with these services already in place, see one of our Big Island residences.

Vacation Home Ownership vs. Flexibility: Which Matters More?

When considering buying a second home in Hawaii, assess your true intentions. Are the burdens of ownership worth the benefits, or do you simply want to enjoy the vacation home lifestyle? For many buyers, the goal isn’t financial return but creating lasting memories and enjoying time with family in a beautiful place.

Full ownership has its perks; you may befriend your neighbors, personalize the space, come and go as you please, and potentially build equity over time. However, it also ties you to one destination, comes with ongoing maintenance costs and hassles, and often ends up underused, even by the most enthusiastic buyers.

Modern solutions like Equity Estates offer a different kind of freedom.

Instead of managing one high-end property full-time, you can gain access to a collection of luxury homes around the world. With Equity Estates, you may also gain access to higher-end, more upscale villas and estates beyond what you could afford to buy on your own.

Why Equity Estates May Be a Better Fit for Vacation Home Ownership

The Big Island is an appealing destination to own a vacation home, but traditional ownership can be complex, costly and fraught with hassles. With a curated portfolio of Big Island vacation homes, you can enjoy the beauty and exclusivity of luxury island living without the burdens of full-time ownership. We place exclusivity and ease right at your fingertips.

Equity Estates Fund offers a fully managed luxury real estate fund alternative at a fraction of the cost of traditional second-home ownership. Instead of being tied to one property, fund members enjoy an investment in a diversified portfolio and experience global travel (with personal concierge services and daily housekeeping) without the burden of property upkeep. And when the homes are sold ten years later, investors receive their investment back plus appreciation, assuming the market continues to increase in value.

From skiing in Colorado to exploring museums in Paris, wine-tasting in Tuscany, golfing in Scottsdale, snorkeling in Belize and sportfishing in Los Cabos, you can enjoy second-home ownership benefits without the headaches.

Equity Estate Fund investors enjoy:

Access to 65+ stunning residences in the world’s most sought-after destinations, including Kohala Coast and Mauna Lani
No property management responsibilities, including no landscaping, pool/spa upkeep, housekeeping, snow clearing, repairs or other maintenance concerns. The Fund manages it all seamlessly
Designated residence managers who provide resort-style concierge services
Flexible travel options, including bringing family or friends along
Investment returns when homes are sold

Choosing Equity Estates Fund over second home ownership is ideal if you want to experience luxurious vacation homes like an owner without being tied down to a single location or dealing with the associated hassles.

Discover the more innovative way to travel the world with Equity Estates today!