Has anyone ever considered this or is the very idea simply too cost prohibitive? I looked into apartments and there seem to be at least some places to rent between 400-700 (which would be good for a couple living together). What concerns me is food prices and shipping costs for ordering things.
I'm curious whether anyone has ever considered this and looked into the feasibility.
Ryan @ Planting Dollars is pursuing ER in Hawaii.
The poverty line is 16% higher in Hawaii than in the US Contiguous states. Perhaps erring on the side of optimism, I think it would be possible to leverage the nice weather and other relative abundances to overcome the scarcities, though.
@Jacob - thanks for the link! Ryan has a great post there explaining how he's able to live in Hawaii for under $1000/month if anyone's interested:
http://www.plantingdollars.com/travel/living-in-honolulu-for-less-than-1000-a-month/
@rePete - agreed. Although many other locations may be a more obvious choice for ERE, to me Hawaii is a great option if you can find a way to keep the housing and food costs down, because there are so many free outdoors things to do (beach, hiking, sports) that the beautiful climate allows you to enjoy all year round.
I'm not sure how replicable his HI on <$1K is, particularly given that his budget doesn't include health insurance yet he engages in inherently risky activities like SCUBA. One session in the hyperbaric chamber is going to seriously crimp his capital.
Good point about health insurance, that's the one thing that's missing, although if he added a high deductible plan to that budget I don't think that would change the numbers all that much.
We've lived here for over 20 years, although not in the ERE style anymore. More like "surf bums in a good school district".
At your prices, your apartment will be in an OK part of Honolulu if you need to be near a workplace. Some of those listings are in slightly shadier sections of town (Kalihi, Kakaako, parts of Chinatown) or way the heck out in Pearl City/Aiea's decent neighborhoods. Some parts of the island have great tradewind cooling (no need air conditioning) while others will require at least $200/month on A/C alone. Of course at those prices you will want to walk the neighborhood at night/early morning before signing a lease.
Food prices depend on how you want to eat. If you're going to eat a Mainland steak&potato diet, with cereal & milk for breakfast, then you will pay 25%-40% extra for it. McDonald's 99-cent ice cream cones are $1.46 on Oahu. Taco Bell's 99-cent meals are $1.29. If you're going to eat local veggie/fish/rice/fruit then you'll pay maybe 10-20% more than most Mainland prices, but probably less than you'd pay in one of the U.S.'s top 10 metropolitan cities. For example we drink soy milk, not cow milk, we eat a lot of fish, and we have fruit trees in our back yard. (Mango is so common here it's practically free. Papaya's about the same.) Costco and Wal-Mart have done a lot on Oahu for price competition. Grocery stores have some loyalty/rewards programs to get the (cow) milk price down to ~$5/gallon. Shopping depends how much time you're willing to spend at farmer's/street markets (which are quite good) and whether you really need Lucky Charms in your life.
Shipping is a PITA. Many online stores won't ship their discounted merchandise to Hawaii. (Yes, Costco.com, I mean YOU!) We are routinely charged $20-$35 for U.S. Priority Mail that's normally $10-$14. eBay sellers will tell you "U.S. Only!" or that they can't ship to international locations. Yet somehow Amazon manages to ship books for "only" $3.99. The answer to the shipping problem is to either buy local (especially online orders for in-store pickup) or to use a consolidator like ShipToHawaii.com. But if you buy/ship a lot then you may not be happy.
Now let's get to the good stuff. Living in Honolulu (if you need to be close to a workplace) means you can bicycle just about everywhere or take Da Bus. It's a bit more challenging in outlying areas but a car is not essential and Da Bus saves a lot of rush-hour frustration. You can equip your bike with a surfboard rack. You do not need to join a gym because you'll be either ocean swimming, surfing, jogging, or otherwise pursuing outdoor activities all year 'round. Although gas is $3.30/gallon, you will drive less. Electricity is 25 cents/KWHr but you won't have a heating bill. You might not have air conditioning. You won't be buying winter clothes, and you may be able to avoid a dry-cleaning bill for office attire in favor of Dockers & aloha shirts. (Of course if you're not in an office environment then you're not even wearing shoes or socks, let alone pants.) You won't have to "winterize" anything. You won't be spending big bucks for indoor activities unless you want to (the beach is free).
Health insurance here is pretty much like anywhere else, with all the major brands, but I seem to have fewer colds/flu. Air pollution is minimal. Hawaii has one of the nation's longest life expectancies, partially due to its Japanese heritage but also its weather. It does have a large Asian/immigrant population leading to the world's highest per-capita instances of tuberculosis and hepatitis, but that's what vaccines & tests are for. It's only an issue if you're an EMT or a medical worker.
Public schools are pretty good, although I can tell you where to find the best ones and the few bad ones. Oahu excise tax is 4.5% (food is also taxed). State income tax is higher for workers but much less for retirees. Property tax is only about 3.6 mills. Unemployment runs lower than the Mainland-- about 4-6%-- but trades and unskilled labor tend to struggle with the higher cost of living... especially with home ownership.
Any other questions?
Hey Nords,
Thanks for stopping by and sharing your knowledge. I appreciate the fact that your responses are always detailed and offer a lot of value to others. I've been reading your posts for years on ER.org forums and am glad to see you on this forum.
For those of us interested in purchasing a home in Hawaii, about how much for the standard 3 bdrm, 2 bath in a decent location?
Larry
Awesome post, Nord! It makes ERE Hawaii seem very real and tempting.
But then again, once you're able to retire all the way to Hawaii, it seems like you might want to also consider South America, Australia, Southeast Asia, etc.
Hawaii to me sounds way nicer than where I am now, but not necessarily as appealing as say Sydney, Buenos Aires, Rio de Janeiro, or Thailand. I've temporarily written those places off as too far from friends and family... but then so is Hawaii, for me, right now. More power to you guys though, it sounds like it's working great for you.
Larry, Hawaii land is ridiculously expensive. A median single-family home is $600K although your description might go for "only" $485K in some areas/conditions. A median condo of that size is $300K plus homeowner's fees of $200-$500/month. Of course some neighborhoods are cheaper than others, and good school neighborhoods cost more. Many residents don't care for their homes (there's almost no environmental penalty for neglect) so some areas may discount as much as $100K for poor maintenance. Jumbo mortgage loans don't kick in here until $625K, unlike most Mainland limits of $417K.
Construction is also quite different from Mainland homes. No brick, ever, and stone or lava rock only as accent or very-high-end construction. "Modern" homes have Masonite exterior sheathing over 2x4 wood frames (a small minority with steel frames) and interior drywall. Insulation is the exception, not the rule, as most homes aren't designed for A/C. Windows tend to be single-pane aluminum or vinyl, almost never wood. Jalousies were more common before the 1980s but casement and awning are more popular today. I've only seen double-pane insulated windows on 2010 new construction designed for A/C.
Lot sizes are small and measured in square feet. A "big" lot is 5000 sq ft (1/9th acre). Newer homes tend to be two-story on 3000-4000 sq ft lots.
Many homes (over 35% currently, and all new construction required by law) include solar water heating. That can reduce an electric bill by $100/month. We have more hot water than we can use except for maybe 3-4 overcast/rainy days/year. (Systems have electric backups, which we never use.) Not all homes require A/C. We mostly dress in t-shirts, shorts, & slippers but it's a hassle to put on business attire at home and have to commute without sweating it to death.
Oahu is overbuilt but does not have an excess inventory, so homes only lost 10-20% value over the last couple years. It's expected to remain flat for another five years. For most, renting is the better choice although fearless DIY handymen can rent to learn the various neighborhoods and then scoop up a cheap fixer-upper. It's worked well for us, and Home Depot/Lowes have made the renovation process much easier/cheaper.
Akratic, I agree with you about the location. The islands have a large transient population, especially Oahu's military. We much prefer Hawaii culture to the Mainland and the surfing is excellent. I enjoy Thailand and the rest of southeast Asia more than Latin/South America. Haven't made it to Australia yet but lots of Oz expats make Hawaii their home or their bridge to the Mainland. Most Mainland transplants to Hawaii, and many Hawaii residents, end up returning to the Mainland when their kids go there for college and/or career (it's the grandchildren). Other Mainland transplants may return there to be closer to aging parents.
We didn't originally intend to move to Hawaii, but the Navy made us an unrefuseable offer and we later realized what a great deal it was. We're estranged from our parents/siblings and our kid just started college (NROTC) so we don't have any strong ties to the Mainland, nor will our kid. However many who grew up here and left will return in their late 20s/30s to raise their own kids here, which is the path our kid is most likely to take. (Or not.) The five-hour flights to the Mainland can be a pain, but our kid will be welcome to send the grandkids to us for visits.
For those seriously considering Hawaii, I'd strongly recommend reading HawaiiThreads.com. They get a lot of malihini questions there, and it's amazing what issues pop up at the last possible minute (or after it's too late).
I love visiting, but I think the pests are too much.
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