 Welcome to Inside Hawaii Real Estate. I'm Goh Tanaka. Happy New Year. It's 2023. I'm Leonie Lam, and we are so honored to be your co-host for Inside Hawaii Real Estate. My co-host, Will, is a full-time Hawaii Real Estate professional and a licensed attorney. And Leonie and I actually worked together as a husband and wife real estate sales team. Leonie is actually a Hawaii Real Estate broker and a 20-year industry veteran. Will and I have actually spent our careers as executives in most areas of Hawaii's real estate industry, and now we help clients at the front lines with buying and selling their homes. The goal of our show Inside Hawaii Real Estate is for us to provide education by going inside Hawaii Real Estate, literally. We're sharing knowledge from our guest experts to provide different resources and perspectives about everything in Hawaii Real Estate. And well, today we have a very special guest who's going to share about the organization she runs and the community she's involved in. Lailan Bento is a co-founder and principal broker of Hawaii Development Group. She's actually one of the leaders in the real estate industry on the big island, the Hawaii Island. And if you actually Google her name, she has amazing reviews as a realtor. At the same time, she's a very generous and giving person. I mean, she's very giving to a community. And she's actually the founder of the foundation and her mission is to help Native Hawaiian children of all financial classes with educational assistance. And she wants kids from Hawaii to dream big, just big time and not be limited by their family financial circumstances. So all right, let's get into it. Welcome, Lailan. Welcome, Lailan. Thank you, Will and Leone for having me on this amazing show. I'm excited to join you folks today just to touch on some topics here on the big island. What real estate is like selling on this island? Thank you so much. And, you know, as we're going to jump into this, right, there's a super hot topic on the big island, literally hot. It's a volcano, Kilauea volcano that's erupting or began erupting again just January 5th, I think. Is that right? Exactly. Yes. Yeah, go ahead. We started with Mauna Loa erupting, right? And then there was a thunderstorm and Mauna Kea was snowing and Mauna Loa was erupting and now Kilauea is back to erupting. So they're all taking turns, I would say. So literally hot topic, which actually leads me to this thing I learned about just recently, which is lava zones. And there's nine of them. What are lava zones and where are they? So on the big island, every district is a different lava zone, as you can see here on the map. And what you really want to look at when looking at real estate on the big island is if you're in lava zone one or two, it can really affect what bank is going to be able to finance your mortgage. And also, if there are any home insurance companies, for many, many years, the Lloyds of London used to be the main home insurance in those areas. And a couple of years ago when Kilauea erupted and took out hundreds of homes, they kind of pulled out of the area of now giving home insurance in those lava zones. That's just one thing to look at when you are buying real estate here on the big island is what lava zone is it and if it's in one or two, what banks land, what insurance companies also insuring those areas. Oh, interesting. So, you know, some of my friends that I might get calls once in a while, hey, I want to buy this one acre lot for only $20,000. On the big island on the east side, most likely lava zone one or two. Is that usually the case? Absolutely. I get those same calls, you know, and I quickly look into MLS and it's definitely in lava zone one and pretty much right on the volcano selling, you know, those lots of that price. So, again, if it's really, really cheap, there's usually a reason and it's probably starting off with being in a lava zone on the big island. So for the most part, for those types of properties, you can't even get insurance. So, so the prospective buyers, they're just taking a big risk that they're buying it for cheap, but they could just lose it entirely. Right. And then also the resale value, right? Because over the years, it's, you know, there used to be a handful of insurance companies and now there's maybe one or two. Also, the state had to step in the state's offering insurance as well in certain areas, but anyone that had, you know, property in those areas or has properties sometimes, you know, with the volcanoes all erupting now, right? They, to resell, it's definitely going to change, right? It's not too much of a valuable property if it's, you know, depends on what area it's in, if it's really right by the volcano, right? So would you just say for most buyers who kind of are interested in, you know, just spending $20,000, $30,000, would it just be too risky, you know, from your opinion or? I would think so. For many years, the volcano was just, you know, especially killer with steadily just erupting. And so before, I think it was more valuable if you did buy property in those areas because you could quickly resell them, right? But now that, you know, all the volcanoes between Manila and Kilauea are erupting, it's kind of making these, you know, insurance carriers and banks, right? Kind of pull back from lending and insuring in those areas. So that's why lava zones are so important to kind of be mindful of and be aware that they are there. And where are these lava zones? Right. On the Big Island, they are either in more of the South Kona area. So maybe Ocean View, as you can see, any place that is red and red on that map, those are the areas that you do really want to pay attention to. So on the east side of the island and then also on the southern end of the island as well. Those are the main lava zone one and two that you do want to look at. Yeah. Super, super good to know. Thank you for sharing that with us and educating us. You're welcome. And, you know, you are an expert on the Big Island. You were born and raised on the Big Island, is that right? Yes, yeah. Yeah, I grew up in Kona, so North Kona area. But yes, born and raised here on the Big Island, seen this island change and, you know, in a good way, right? It's growing just like the rest of the state is right now. So yeah. Right. And so you know the neighborhoods in the Big Island pretty well. It's from what I understand. And so would you be able to kind of share with us? Like if someone was thinking about, you know, investing or moving to the Big Island, can you walk us through maybe some of the neighborhoods that they might consider? Sure. So on our island, we have almost all of the world climates in every district is vastly different, right? So one area could be, you know, rains a little bit more. You know, the east side of the island rains a little bit more, almost similar to Kaneohe, right? And then on the west side of the island, it's sunnier, right? Weather. So west Hawaii has, you know, more sunny days. You know, it's a little bit drier compared to the east side of the island. It rains a little bit more on that side. I can tell just driving around the island, just the different towns, you know, some towns are rural and some, you know, you'll see more farms and ranches. And then, you know, North Kona, you'll have all the big box stores, right? For the island and our main hospital too is on this side of the island. So did you want to maybe touch upon the west side? We can go ahead and jump into that. Well, you know, like, we love coffee and, you know, we recently had Kona coffee, you know, it's all gone. But I think I heard that coffee farms in South Kona, one of my favorite parts of the island. Is that right? Yes. So Kona is known, of course, worldwide, right, for our coffee. And also what's taking off is, I don't know if you ever tried it, is Kauu Coffee. Now, in the district, southern district of the island in the Kauu area, they're growing more coffee farms now. Also trying to put that on the map, you know, compete with Kona coffee. Yeah. Okay, let's talk about South Kona. Let's start with that. So South Kona is more of a rural area, more farms, you know, black sand beaches, green sand beach down there. If you're looking for more acreage, then you would definitely want to look in the South Kona area or if you're into farming or just, you know, not being close by your neighbors, you would definitely consider South Kona area. How about North Kona, where you grew up? North Kona has grown quite a bit, you know, when I was a kid, we had one stoplight. And interesting, we had three homeless and we knew them by names, you know, and you would walk through the whole town. Just as little groups of little kids, all your friends right through the town, it was that small. It was a coffee farm, coffee farming town and a fishing, a small little fishing village, right? And now Kona has just changed. You have, you know, the Costco, Target, malls, you know, the hospital. So it's grown quite a bit over the years of, you know, a few more stoplights, not like Kona Lulu or anything, but it's growing. And so North Kona. Costco is clutch, like we have to buy without Costco. We have, I don't even already know how many on our events. And it's like, that is where we are at, like almost every single week. Absolutely. And you know, when Costco was built, they definitely had a vision because when they built the Costco in Kona, it was actually the largest in the state at that time, which is interesting because the town was still small, right? And they must have, you know, foreseen some kind of a growth that was going to happen on this side of the island, which it definitely has. So would you say that the North Kona district is more of the main, not to take away from the other districts, but is that considered the main district on the west side? Yes, absolutely. And you know, housing is more expensive on that side of the island in Kona. You have more of the higher end homes, you know, the traditional upscale neighborhoods that are gated. So Kona definitely, you know, a lot of the workforce is on this side of the island, right, as far as higher paying jobs. And so of course, the cost of living is a little bit more higher in the North Kona area compared to, you know, maybe the Puna district, right, which would be on the east side of the island. And you know, when a lot of our friends visit the big island, including us, we stay in the Waikaloa area. Yeah. So that's more of a resort town, short term rentals. Can you tell us a little bit more about that? Yes. So the resort area, you have a couple of resort areas, you have, you know, Mauna Kaia, and then you have Waikaloa Beach Resort, Mauna Lani Resort Area. And so a lot of the main hotels are in this area. We have really good restaurants. You know, we have a lot more amenities, right? We have nice beaches, white sand beaches out here. And it is definitely a resort area where you're able to, you know, you'll have a combination of short term vacation rentals and then there's also full time residents here too. And that has significantly changed in COVID. The neighbors are vacation renting their places and they actually moved here full time, which is nice because then you get to know, you know, everybody else that lives in your neighborhood too, right? Instead of just all the vacation renters. And you have mentioned affordable housing. So that's a huge issue across all islands. Absolutely. I believe I think our island is 15,000 homes short right now with a population of a little less than 200,000 on the island. We definitely need to build more homes. Otherwise, you're just going to continue to see, right? Grandma lives with, you know, yourself and your grandchildren. It's multi-generational living in the same household just because there's not enough housing. But with our new administration, you are starting to see a lot of these affordable housing developments come through. They're finally, you know, getting dusted off and going in front of the county council to really push them forward with the housing crisis that, of course, our island has and statewide, right? We just have a lack of housing, so we just need to have more housing but affordable housing for people to be able to afford, right? That middle class definitely needs more housing. So hopefully, yeah. So on the big island, so on Oahu, a lot of times when they say affordable housing, they have, you know, market price units and then they combine it with, you know, a percentage of affordable homes. Is it the same case on the big island or do you have four units of affordable housing on the big island? So right now, we're seeing a combination of, they're actually affordable rentals and then there's also affordable housing to sell is what we're seeing more of. So what that does is if a family can't afford to buy yet, they're able to at least rent. And those rates, but people don't realize they're set actually from the state. And so they think the developer, you know, affordable housing at 600,000, but it's actually set by the state. The state sets those rates on a developer and then, you know, we'll give a developer tax credit to try to help them, right? And, you know, at least trying to build it where they're able to still offer, you know, with the, you know, for them to be able to build it, but then for family to afford it, right? So it has to make sense for a developer, right? So that's why they try to give tax credits and, you know, have the developer turn around and still be able to sell it at their affordable rate. Yeah. And then there's one area, I think, on the Big Island called Waimea. Yeah. And, you know, that actually someday in the future, I wish that I could have like an investment property in Waimea. I just love that town and that area. Could you maybe get into that a little bit about what is Waimea like? So Waimea for many years, we have, you know, Parker Ranch is there. So it used to be one of the largest ranches right in the country and they kind of, you know, split it off and sold to developers and shopping centers. And so Waimea is still a small town. You have some of our best private schools are in that district. So if you're looking for great private schools, it would be in the Waimea district. And then also those properties up there, you have, you know, again, more acreage or if you're in wanting to, you know, have a ranch, that would be definitely the district. And they also have some really great restaurants. In fact, Maryman's started there. That was their first restaurant in Waimea. And when you say they have the top schools there, they have the top school in the state there for private schools. Is that right? They have Hawaii Preparatory Academy in that area, yes. And then they have Parker School also in that district. So great schools, they have a great school district in that, that small town. And then kind of going back to Waikoloa area, you know, resort communities and everything like that. What is it like in terms of short term rentals on the Big Island? First, in the resort areas, they do fantastic as far as occupancy, the rates that they do get. You know, some of the hotels, it's actually cheaper to afford, for a family, I would say, to be able to afford a vacation rental. You know, you have hotel room rates just a room. Sometimes they're a thousand, eleven hundred dollars a night. And so if you have a family, it's still cheaper, right? And you have a kitchen to do, to actually rent a vacation rental. So they do very well in this area with occupancy. I heard it's probably about at least 80% of the time. And so that's really great for an owner, right? Because that covers all their expenses or mortgage or HOA fees. No, being able to do that. Right, right. On the Big Island, there's a hosted short term vacation rental and an unhosted vacation rental. Can you, you know, dig deeper into what the difference is? Because on the Oahu, we don't have that. Hosted versus unhosted. Right. And I believe our county, when they first passed, it was actually Bill 108 a couple of years ago. And what that was was if you, you know, were a rental, a vacation rental, they grandfathered those people in at the time. They did have to get, you know, a special permit. And so our county, we were a little bit more lenient where if you were in the short term vacation rental area, you just apply for a permit. And then if you were a hosted vacation rental, so that would be either a caretaker lives in the property full time or the homeowner lives on the property full time. They were able to still vacation rent as long as, you know, the subdivision rules allowed it. Right. So right now, currently you're able to still do hosted rentals and you don't have to apply for a permit with the county or anything. And so what's changing is going through our county council right now is they're wanting to have all the hosted vacation rentals apply for a permit so that our county will be able to know all of the rentals. Right on the property on the island instead of just knowing, you know, the short term vacation rentals that had to apply for a permit. So it's a little bit changing up so I'm curious to see how that's going to affect real estate here. You know, will it drive all of those investors to only the resort areas right because sometimes that might just force them into having to buy where you're, you know, legally allowed right to vacation rent. So it's, we're all watching it closely as realtors here on the big island just to see what's going to happen. Absolutely. At Oahu, short term is considered anything 30 days or less, but earlier last year, the mayor tried to pass a new law saying short term rentals is anywhere 90 days or under 90 days. But there was a class action lawsuit. There was a pretty preliminary injunction that blocked it. So right now it is set a standstill between, you know, 30 to 90 days, but on Oahu it's not 30 days or less is considered short term rentals on the big is that the same case. It is the same case, but we are loud. I know your island doesn't allow hosted vacation rentals right but our island actually currently does. And so I have this discussion with any new buyers going forward. You know, if they're looking at maybe a potential hosted rental just to let them know, okay, if you're going to, if you're buying it to do this, then you know, maybe down the line you might not be able to. I'm not sure just how, you know, this is all going to pan out, which is interesting. So any investors who's, you know, looking at our show right now, if it's unhosted, you have to get a permit, meaning that there's no caretaker, the owner does not live here or live on on that property. It has to be. Yes, yeah. And how long is a permit process. Right now, I believe the county right now is saying 90 days. So it's a couple of months for them to give the permit and knowing their application, which is going to be interesting for the hosted rentals. They, you know, they need their things like their blueprints, they're going to need everything to be permitted. And so if you have a hosted rental and something's not permitted, I don't know, you know, if the county will actually grant you that hosted vacation rental permit, if this does go forward. So I'm kind of, it's interesting to see what they're going to actually be asking the applicants right on a hosted rental permit. Yeah, yeah. Yeah. And those for those applications for at least the unhosted is a pretty easy process. Is it just a rubber stamp or is it, you know, some stringent requirements from the city and county. There are some stringent rules in there of what the applicant has to do. It's actually a packet that they have to go through everything, you know, and submit, you know, floor plans and are all the permits completed. And, you know, was anything done not permitted, you know, all of those things they have to draw out sometimes people have to hire, you know, architects or you have to draw their plans and stuff I've seen. And contractors are an engineer, just to, you know, have them help them with their packets. And there are at the time when that bill did pass there are a couple of companies here that actually assist people with that packet of applying it correctly to the county so that it doesn't keep getting kicked back to them, which is great. Yeah, yeah. Yeah, I think this is great. I mean, in terms of, you know, there's always a balance right because you have people who want to come to Hawaii move to the big island. And at the same time, we have to take care of our local families, affordable house. So there's always going to be that balancing factor. Right, right. And you know, and speaking to people on selling vacation rentals, it's, you know, it's people, especially with the hosted rentals, it's, you know, a someone that's retired on a fixed income. And they just want to rent out maybe their Ohana, right? That helps them pay their bills. And so it's really, you know, not people making, you know, there's not a pot of gold at the end of the rainbow, right? It's just people, middle class really covering their expenses is what I've come across in selling, you know, those hosted rentals. And just kind of shifting gears. So like we talked about Waikulua and then there's this place called monolani, right? Within Waikulua, is that right? Yes. Yeah. And it's I've been there myself and it's just a wonderful, wonderful place and I was just wondering if you could share just a little bit like this is a particular area within Waikulua that I just kind of wanted to know more about. I love monolani. I mean, I feel like it's the best weather on the island. It's sunny every day with a breeze. You know, it's not just sunny and hot, right? It's not, it's rarely humid here. And I just love how, you know, clean and you have all of these amenities, amazing restaurants, you know, we have a fitness center. And if you're a homeowner here or a vacation renter even there is a private beach club. And there's a restaurant right on the beach. So I just love it. It's called Anapua. And so you have everything you really don't even have to leave the monolani area if you don't want to. We have grocery stores, everything right here at coffee shops, you know, you want to ride your bike. Yeah. And you have goats too, right? And we have goats. Yeah. Yes. And they just love to eat all the grass and plants. It's a gold mine for them. So what are the price points, for example, because it's a resort area, right? Is that right? Yes. You're looking at maybe about a million, two and up. One, you know, at least one, I would say over a million in the resort area out here in monolani. And for all of the amenities, like the beach club and all that, like are the HOA fees reasonable or how is that? The HOA fees are a little bit higher here. They're at least, you know, probably about 800 and up. But that does cover what explains people is two associations, right? So your actual subdivision or complex association. And then there's a master association. And with the master association, you have that, you know, private clubhouse, you have 24-hour security. You have all of these other amenities, right, that you are paying for. So if you were to split it up, then it would, you know, make sense to any buyer. But combined, it looks like this really large number, right, like 1600. But if you were to separate it and then people get to see what, you know, all the amenities you do have around here. And it's just exceptional. I love it. And switching gears, the hot topic, right, cesspools conversions to septic tanks. And if you only have, you know, less than a couple of minutes remaining, but there's a new law 20 by 2050, you have to convert all cesspools into septic tanks. And do you want to talk about how it affects your island? Absolutely. That's another thing we're all looking at here in real estate. Our island has 50,000 cesspools. So there's 88,000 in the state and our island has the most, right, at 50,000. And I know the states trying to, you know, offer tax credits and, you know, first they were trying to, they have a priority list of, you know, the ones that are by the ocean or gang cesspools. Because we do have that also where you have, you know, a couple of apartment buildings and they're all in the same cesspool, right, from many, many years ago. And so those are always on the, their hot list, right, for the state to try and being able to convert them to either sewer or a septic system. I am curious to see how we're going to move this forward because there's not a fixed rate, right, to convert this. Meaning, if you have to dig up the driveway rock wall, I've had, you know, quotes from $12,000 to $74,000, right, from contractors. And so it's really going to be a burden if they do force this on all of these families, especially the ones that are on fixed incomes, to be able to pull that out from somewhere, right. I don't think they just have that kind of money laying around. It depends on, of course, their financial situation. I think, you know, definitely are going to need help from the state on this. Right. Yeah. So basically, in summary, you know, what a great time with you like land, but I mean, for investors looking to live that Hawaii lifestyle, obviously the big island of Hawaii is literally the most affordable in some cases, right. Yeah, there's the most land available, as long as it's not in a lava zone. You know, personally, it's one of my favorite islands, even though Will and I reside here on Oahu in Honolulu. I just, I'm looking forward to one day getting that investment property for us in Waimea and being able to spend time over there, you know, and everything, but or in Manalani, where you That sounds fabulous. And I would want to be your neighbor anyway. So yeah, what a great city. Yeah, I mean, this was so awesome. You're amazing, super informative, very helpful for us and our viewers. We learn a lot about so much about the big island and real estate. And how do people reach out to you if they want to learn more about buying and selling or but just property in general on the big island. So you can go ahead and you know, reach me on my cell phone or right here. That's also my email address or through social media. I'm available every day. You know how that is with real estate. So anyone has any questions about, you know, real estate here on the big island. I am open to help anyone. So just go ahead and contact me at any time. Thank you so much. Thank you so much. You are the best. Thank you. Hello. Hi.