resolution
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Post by resolution on Apr 11, 2014 21:24:07 GMT -5
I just wanted to give an update on my husband's job search, since I have posted about it a bit in the past. We are in Hawaii waiting to fly back home. One of the positions that he was offered is out here, and we wanted to spend some time in the area and figure out expenses and such before he made a decision on it.
While we were here, we were taken through the neighborhoods in Kailua-Kona. A cheap house in this area is 350k, and you really have to shop hard and swoop in on it to get one for that price. Housing is the big issue here; other areas are a bit more expensive but not budget busting. Groceries cost approx 33% more and restaurants are 50%-100% more than at home. Gas is only $4.35 so it is a minor difference. Although expenses are higher, salaries around here are low.
I worked out a budget with the new salary figures, and we could afford a small home here if we cut our savings by $1000 per month and reduced discretionary spending. Neither of us loves the area enough to take the financial hit, so once we get home he is going to decline the position, and either take the one in Virginia or back to square one looking for a job.
Everyone we have talked to thinks we are idiots for passing up the chance to live in Hawaii, but I guess we are more attached to financial security than to a relaxed lifestyle.
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Jaguar
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Post by Jaguar on Apr 11, 2014 21:29:00 GMT -5
Financial security is your priority, forget about what others say they aren't you & yours.
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Apr 12, 2014 9:55:12 GMT -5
Interesting. I wonder how people afford to live there then. We're you able to talk to people who've lived there for several years?
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Bonny
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Post by Bonny on Apr 12, 2014 10:06:55 GMT -5
Interesting. I wonder how people afford to live there then. We're you able to talk to people who've lived there for several years? Financial security isn't that important to them. They live in Paradise!
Almost everyone I know who has spent significant time in the State of Hawaii cycles between HI and CA. I think it's probably fun for a while but as resolution points out, you take a hit to your finances for a while. Depending on where you are in your life it could be a great opportunity.
If my DH liked the job I'd agree to a 3-5 year max term.
Thanks for the update. I wondered what decision you guys would make.
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Apr 12, 2014 10:51:26 GMT -5
Yea, if I could pull it off, I'd probably try it for a year.
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resolution
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Post by resolution on Apr 12, 2014 18:07:40 GMT -5
We spent a good amount of time with the shop foreman and his wife, they drove us around to different neighborhoods and talked about price points for each neighborhood. They have been there for 30 years, he is Swiss and she is from Southern CA, so they don't see any issue with the fact that they just paid 500k for a small home that they can't afford to air condition.
The shop is having major problems retaining workers, they can get people out there for a couple years but they always leave. They don't seen to make the connection that the living expense doesn't correlate to the salary they are offering. They were very blase that we should buy a 350k to 500k house but they are offering a 50k salary. The only reason this would work at all is because my employer has agreed to let me move and take my job with me.
We also talked a lot with the guy that owns the vacation rental we stayed in. He owns four vacation rental units and has done a lot of dabbling in real estate. He also does private real estate loans, apparently there are a lot of investors that do private loans for people that can't qualify for normal financing. I had thought that kind of deal had stopped with the meltdown, but apparently not.
The general assumption of everyone we talked to is that since we don't have kids, we don't need a house. We can just rent an apartment. Rent is in the $1200 to $1500 range, which seems low compared to the cost of buying.
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resolution
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Post by resolution on Apr 12, 2014 18:23:46 GMT -5
DH absolutely loves the job and the people at the shop. I had talked to DH about doing it for just a few years, but he is really hating this job search and hates the expense of moving. He doesn't want to move and then be in the same place a few years from now. He would really like to just move and settle down permanently.
I really like Hawaii and I had a wonderful time this week. Everywhere we went people were friendly and would start conversations with us. It is absolutely beautiful. You can go from something that looks like high desert to a rain forest in less than a half hour. Lots of really nice areas to hike. But it just didn't grab me enough to give up contact with all our friends and family and deal with moving twice and storing DH's power equipment for a few years.
A few things bothered me. The foreman's wife giving me a pep talk that we can triple our mortgage because I won't have to buy a new winter coat every year, so that savings will help with the mortgage. The landlord that owns over a million in vacation rentals explaining how he bums free fish off of the fishermen at the dock. And just the general thought that it is normal to revert to a college student lifestyle to get by.
I have to admit the budget worked out better than I expected, so it would be doable to get a 2 or 3 bedroom house and still put money in my pension and our two IRA's. It is all the other savings that we would have to cut and pretty much stop eating out or going places. But we wouldn't be begging for food from fishermen or renting out a one room studio that someone offered us while we were out looking at real estate.
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Apr 12, 2014 19:47:12 GMT -5
So, are you still considering?
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resolution
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Post by resolution on Apr 12, 2014 20:46:50 GMT -5
As of right now hubby is going to call him on Wednesday and decline the offer. I advised him to just do it on Monday so we can be done with it, but he is stalling a little.
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Bonny
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Post by Bonny on Apr 12, 2014 21:28:20 GMT -5
resolution said:
I really like Hawaii and I had a wonderful time this week. Everywhere we went people were friendly and would start conversations with us. It is absolutely beautiful. You can go from something that looks like high desert to a rain forest in less than a half hour. Lots of really nice areas to hike. But it just didn't grab me enough to give up contact with all our friends and family... LOL, your friends and family would be visiting you!
I do like @tbird's idea of negotiating a higher salary since they know they have a recruitment and retention problem.
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resolution
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Post by resolution on Apr 13, 2014 5:18:20 GMT -5
We were talking about it and would probably go for 60k, but he already talked them up from 45k to 50k so it seems unlikely. However it is a key position for them and they have about a year backlog of work because they can't find anyone to fill it.
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resolution
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Post by resolution on Apr 13, 2014 5:26:09 GMT -5
Both our parents would come visit us, but we have some financially challenged extended family and friends that couldn't, and there would be no money in the budget for us to help them fly out.
We probably wouldn't call them much with a 6 hour time difference. My family is 3 hours away and I always think about calling them while they are still at work or while they are still in bed.
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reader79
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Post by reader79 on Apr 13, 2014 6:57:20 GMT -5
My sister thought that she'd be safe from stray visitors by moving to Honolulu, but the broke ones made the effort. There's just something about Hawaii. I flew out there with her best friend, who's living on grad school loans.
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milee
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Post by milee on Apr 13, 2014 7:10:47 GMT -5
DH absolutely loves the job and the people at the shop. I had talked to DH about doing it for just a few years, but he is really hating this job search and hates the expense of moving. He doesn't want to move and then be in the same place a few years from now. He would really like to just move and settle down permanently. I really like Hawaii and I had a wonderful time this week. Everywhere we went people were friendly and would start conversations with us. It is absolutely beautiful. You can go from something that looks like high desert to a rain forest in less than a half hour. Lots of really nice areas to hike. But it just didn't grab me enough to give up contact with all our friends and family and deal with moving twice and storing DH's power equipment for a few years. A few things bothered me. The foreman's wife giving me a pep talk that we can triple our mortgage because I won't have to buy a new winter coat every year, so that savings will help with the mortgage. The landlord that owns over a million in vacation rentals explaining how he bums free fish off of the fishermen at the dock. And just the general thought that it is normal to revert to a college student lifestyle to get by. I have to admit the budget worked out better than I expected, so it would be doable to get a 2 or 3 bedroom house and still put money in my pension and our two IRA's. It is all the other savings that we would have to cut and pretty much stop eating out or going places. But we wouldn't be begging for food from fishermen or renting out a one room studio that someone offered us while we were out looking at real estate. Some of those behaviours are based on saving money, but others are just lifestyle choices that are common in tropical places, IMHO. Florida has some similarities. I know dozens of people who own over $1 million in real estate but fish to eat "free" or wear their $3 plastic flip flops until they literally fall apart. The lifestyle is not really a college student one, but more of a tropical community. The LL in the example bums fish from the fisherman and in a couple of months when the bananas ripen on his banana tree and he can't eat all 30 on the bunch at once he takes them down to the dock to give the extra bananas away.
I'm not saying you shouldn't examine your budget and make sure the actual numbers work (and ignore BS about how not buying winter coats will allow you to make a $500k mortgage payment), but don't get too worried by the people you meet that are wealthy on paper yet still live the tropical bum lifestyle.
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Bonny
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Post by Bonny on Apr 13, 2014 9:11:21 GMT -5
I agree with milee about not being put off by the tropical bum lifestyle.
The first true multi-millionaire I met here in town delighted in finding "free" stuff; from getting mussels at the beach to eating watercress in the park. He's the one who taught me about buying clothes at Goodwill to paint in or do other tasks while working on the rental houses.
His family was pretty poor while he was growing up so that's how he was trained. Later on in life it was just a game.
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resolution
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Post by resolution on Apr 16, 2014 17:36:58 GMT -5
DH called the business owner back today and explained how much he liked the job and the area, but that we can't afford to move there for 50k. He asked for 60k, and the owner said he needed some time to think it over and would call back on Monday with an answer.
We are content with it going either way.
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resolution
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Post by resolution on Apr 23, 2014 16:32:40 GMT -5
I just wanted to update. They offered DH 60k plus profit sharing of around 10% with the understanding that he would come out for a couple months and do a trial run to see how things went. We decided to go ahead and give it a try. The company is paying half the plane ticket, half the rent and providing a company car for the two month trial run. If everything goes well for the two months, they will give him a month off to come back and pack up the house and pay for a share of moving expenses. I am staying here with the house.
He gave notice today at his current job and reiterated his concerns about all the missed payments and financial mismanagement. The offered to hire an outside accounting firm to manage the financial side of the business if he agreed to stay, but it is too late at this point.
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milee
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Post by milee on Apr 23, 2014 16:36:08 GMT -5
Woo hoo! Sounds promising.
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Cookies Galore
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Post by Cookies Galore on Apr 23, 2014 16:42:08 GMT -5
I just wanted to update. They offered DH 60k plus profit sharing of around 10% with the understanding that he would come out for a couple months and do a trial run to see how things went. We decided to go ahead and give it a try. The company is paying half the plane ticket, half the rent and providing a company car for the two month trial run. If everything goes well for the two months, they will give him a month off to come back and pack up the house and pay for a share of moving expenses. I am staying here with the house. He gave notice today at his current job and reiterated his concerns about all the missed payments and financial mismanagement. The offered to hire an outside accounting firm to manage the financial side of the business if he agreed to stay, but it is too late at this point. Good luck! I guess if you stop buying $30,000 winter coats you can afford the $500,000 mortgage!
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Ombud
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Post by Ombud on Apr 23, 2014 18:21:27 GMT -5
Is 500k for a house a lot? You don't need AC in Hawaii. Just open the windows. And the garden would be phenomenal in Kauai! What's their 401k pkg? Just sayin
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Post by Deleted on Apr 23, 2014 18:34:38 GMT -5
Good for you! I think it's an incredible opportunity, I would do it in a heartbeat! I probably would have done it anyway, but between the better offer and the fact that you can take your job with you, I wouldn't hesitate. Life is for the living, and we are a long time dead.
The financial reasoning you mention is indeed something else though LOL!
Wait ... I hope you're only staying there with the house temporarily, until your DH sees whether the trial run works out?!
Best of luck to both of you! And kudos for you for going outside your "comfort zone" and giving this a try! I'm sure it's both incredibly exciting and scary, and I admire you both for "going for it".
ETA: Your main "issue" seems to be the cost of buying a new house. What's the rush? Can't you keep your house for a year or even two, and see how things go? Yes, I am the FIRST person to admit that there can DEFINITELY be issues when you rent out a property. But, since you're reluctant to move there anyway, and RE is expensive there, personally, I'd keep the house and rent for a year, and then reevaluate. You may love it, you may hate it, but you would be keeping your options open, at least for a while.
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Post by Deleted on Apr 23, 2014 18:47:55 GMT -5
Awesome... I was so sad when I read the first time you were not taking it but did comment since I didn't want to make you feel worse about it.
Hawaii... Yes Yes Yes
Just go for it!
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resolution
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Post by resolution on Apr 23, 2014 20:41:41 GMT -5
I just wanted to update. They offered DH 60k plus profit sharing of around 10% with the understanding that he would come out for a couple months and do a trial run to see how things went. We decided to go ahead and give it a try. The company is paying half the plane ticket, half the rent and providing a company car for the two month trial run. If everything goes well for the two months, they will give him a month off to come back and pack up the house and pay for a share of moving expenses. I am staying here with the house. He gave notice today at his current job and reiterated his concerns about all the missed payments and financial mismanagement. The offered to hire an outside accounting firm to manage the financial side of the business if he agreed to stay, but it is too late at this point. Good luck! I guess if you stop buying $30,000 winter coats you can afford the $500,000 mortgage! TBH, most of my coats come from not packing properly on a vacation, and buying the coat on the cruise ship or at the top of the mountain, so i suspect cutting back on the trips that lead to new coats may make more of a difference than I like to admit. DH followed the tradition and got a Hawaii hat during our trip after he left his hat at home and burned his head. If the two month thing works out, I imagine I will be posting a sample budget for advice.
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resolution
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Post by resolution on Apr 23, 2014 21:06:22 GMT -5
As far as the house and staying behind, I am going to stay here for the two months while he tries out the job. I don't think I would be very productive working out of a studio, and I don't want to drastically change my hours for two months and then change them back for a month and then change them again when we move. I am trying to avoid as much work drama as possible and I don't want them to feel like I am taking advantage of them.
We are planning to put this house up on the market but keep our rental in my home state. This house isn't really suitable to rent out because it has a water catchement system that is somewhat high maintenance. If we need to move back to the mainland, we would either go to where he found a job or back to my home town near my family.
We plan to rent for at least a year, possibly longer. It looks like two bedroom apartments on the beach run about $1200 a month or we can rent a small house up on the mountain for $1500 a month. We will probably rent on the mountain because it is quite a bit cooler.
I think the retirement is a SEP IRA rather than a 401k, but there would be some vehicle for pretax investing.
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resolution
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Post by resolution on Apr 23, 2014 21:39:06 GMT -5
Is 500k for a house a lot? It's about five times as much as we paid for our current home...
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Ombud
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Post by Ombud on Apr 23, 2014 23:37:55 GMT -5
Only two bedroom apartments on the beach run about $1200 a month or we can rent a small house up on the mountain for $1500 a month Never realized it was that cheap
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resolution
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Post by resolution on Apr 24, 2014 6:08:12 GMT -5
It is the cheapest island in Hawaii, although we will be on the expensive side of it. The rent prices and purchase prices do seem out of alignment.
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Post by Deleted on Apr 24, 2014 9:56:47 GMT -5
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raeoflyte
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Post by raeoflyte on Apr 24, 2014 10:07:00 GMT -5
Renting sounds like a great deal!
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