Buying Land For Sale on Maui: Tips for Success

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There are are three primary reasons why people buy land on Maui. They may not be finding homes that fit their needs or preferences. They may envision a specific design or style for their home.

For others, maybe a lot is available in a location they love. While buying property and building comes with obvious rewards, buying land for sale on Maui can come with its share of challenges. It requires careful due diligence to ensure everything is as it seems.

This post is an extensive guide to help you navigate the process. It covers key areas such as your budget, zoning, entitlements, easements, utilities, and more. We created this guide to help you make informed decisions and avoid pitfalls.

Determine Your Budget

The first step of the purchase process is determining your budget or even the viability of a land purchase. It’s one thing to say you want to buy a lot and build; it is another to have the financial resources to do so.

The cost of land on Maui is high, and the cost to build is much higher than most anticipate. Are there parcels of land on Maui to park an RV or a tiny home? Yes, but those opportunities are limited.

Buildable lots currently start in the $300,000s. Land at lower price points usually has some obstacles. They may lack utilities, have more difficult building sites, or have more onerous zoning. More conventional lots with utilities typically start somewhere in the $500,000s.

Finance or cash?

There is a reason why only 15% of land purchases on Maui over the last year used some form of conventional financing. Obtaining a land loan is more challenging than obtaining a home loan. Rates are higher, the borrowing period is shorter, and you won’t be able to borrow as much money as you would for a home purchase.

Owner financing is another way to purchase land. About 9% of last year’s land transactions used Purchase Money Mortgages (a Purchase Money Mortgage is where the Seller holds the note). That said, Purchase Money Mortgages won’t help if you struggle to qualify for a conventional land loan. Savvy sellers are going to closely scrutinize your finances before providing a PMM.

The budget process is more straightforward if you are a cash buyer. Do you have sufficient cash to acquire a lot that meets your wants or needs?

Do you have the money necessary to build what you need or the time to build up the capital to build what you want? That brings us to the next section.

Get A Realistic Sense of Building Costs

Over the last five or more years, we have seen a fair number of parcels of land on Maui sell and then come back on the market within a year or two. Some of that is sellers taking advantage of the market’s appreciation or sellers who had a change in life circumstances. However, we know of more than a few people who bought land and ended up selling after realizing that building costs were much higher than anticipated.

Building costs on Maui were high before COVID-19. They rose significantly during the pandemic due to increasing material and labor costs.

While some material costs have decreased, labor costs remain persistently high on Maui. The rebuilding of Lahaina over the next five to ten years threatens to increase costs even further, as competition for scarce labor will be much higher.

It is worth contacting contractors who work in the part of the island where you want to build. If you give them a sense of what you want to build and the quality of materials you would like to use, they can provide rough per-square-foot estimates. Give yourself a healthy buffer on top of that quote to account for change orders, unexpected costs or increases over time.

How Long Will It Take?

Time is money. It’s an old saying, but it is appropriate if you plan to buy and build. That’s particularly true if you are building a primary residence. Remember that the longer it takes for you to build, the longer you will be paying rent or another mortgage before you can move into your new place.

Make sure you get a realistic sense of how long it takes to obtain permits, the availability of your builder or potential builders to start on your home, and how long the construction should take. It’s always better to prepare for the worst and hope for the best by building buffers for unexpected delays.

Understanding Maui Zoning and Entitlements

Knowing the zoning of any property you might be interested is an integral part of your purchase. Zoning can dictate the size of the structures you can build, the number of structures you can build, setbacks from your property lines, and the type of activities you can engage in on a property.

Types of Zoning You May Encounter

When looking at land on Maui, the odds are high that you will encounter one of three different types of zoning. They are the agricultural, rural, and the residential districts. Agricultural lots are typically parcels of 2 acres or more. Rural lots are typically a half acre or larger. Residential lots are smaller in size. There are three different types of residential lots R1, R2, and R3.

Less common zoning that you might encounter include interim zoning and urban reserve. While not a county zoning, lots in the state Conservation District carry additional restrictions. Buyers considering these types of lots should do careful research so that you fully understand all permitted uses and restrictions.

We advise considering other properties if you have grand plans for a property, but the zoning does not fit your needs. While rezoning is theoretically possible, it is not frequently practiced on Maui. The odds would not be in your favor to rezone your lot, let alone do it in a timely manner.

Verify Zoning

While there are zoning maps for Maui County, the best way to verify zoning is to use a Zoning Confirmation Request Form.

It is also worth checking to see if there are any discrepancies between the zoning and the community plan. Such discrepancies could lead to permitting issues. It is worth discussing such discrepancies with the county planning department and/or a land use consultant if you encounter them.

Special Considerations for Agricultural Properties

As the name implies, the intent of agricultural zoning is to encourage agricultural practices. You can build a home and an accessory farm dwelling (a cottage), but you are required to sign a notarized agricultural declaration with Maui County to confirm that you use 51% of the property for agriculture.

People often correlate large acreage with subdivision potential. That said, assuming that larger agricultural properties can be subdivided isn’t always safe. First and foremost, agricultural lands can’t be subdivided to where any parcel is less than 2 acres.

Depending on the property’s previous subdivision history, many four plus acre ag lots may not be further subdivided. The lot will need to have future allocations for subdivision potential. Information about future subdivision allocations typically can be found in a preliminary title report for a property.

Special Management Areas

If a property you are considering is located within the Special Management Area, which includes most coastal areas of Maui, you will need to obtain an SMA permit before beginning any development work. This permit process is designed to protect coastal resources and ensure that development is consistent with the Hawaii Coastal Zone Management Program.

SMA permits are discretionary. That means the county may not approve all of the entitlements particular to a lot’s zoning.

While we rarely see that happen in practice, it is worth remembering. It is also important to note that the overall permit process for property in the SMA takes longer than for properties outside the SMA.

If you have questions about building or developing in the SMA, consultation with the planning department and/or a land use consultant is advised.

Assessing Utilities

Utility Availability

It is worth verifying what utilities are available for a property. While the representations of the agent and the seller are important, it is important to confirm this information independently.

It is also worth determining if the utilities available are public or private. Private utilities may have higher rates, and or could entail periodic assessments or fees to improve or repair infrastructure.

While it is essential to verify the presence of utilities for a lot, it is also critical to understand their location. While electricity may be nearby, bringing electricity to the lot or a building site may entail installing power poles or trenching.

Additional electrical infrastructure like transformers may also be required. The cost to install power poles and transformers can add up quickly.

Water meters can be located off the property or a considerable distance up or down the street. In some rural areas, water storage tanks or cisterns may be needed to ensure adequate water pressure.

If the utilities are not located directly on the property, efforts should be made to ensure that the necessary easements are in place to allow utilities to traverse neighboring properties.

Wastewater Disposal

County sewer services are not available throughout Maui. Determine if the lot you are considering purchasing has access to either a public or private sewer system for wastewater disposal.

If your home will need a septic system, it is worth looking into additional potential costs. If near the ocean, a stream, or any potable water source, a more expensive aerobic septic system might be required.

If you intend to build a home with six or more bedrooms and the property isn’t connected to a sewer system, you would need to install a wastewater treatment plant. These systems are expensive to install and expensive to maintain every month. Check out our post, Know Your S@!t, for a more in-depth discussion of Maui wastewater systems.

Going Off The Grid and Other Utility Options

Not all lots on the market have utilities readily available. There are some lots where you are outside the service area for public water infrastructure. Places like Upcountry and Haiku may have water systems, but there is a long waitlist for meters.

Furthermore, the waitlist is closed at this time. There are rural areas where electrical infrastructure is also more limited. Connecting to the grid may be a challenge or cost-prohibitive.

Does that rule a property out for building? The short answer is no. People have been living off-the-grid in parts of Maui for decades. That said, if you are considering a fully or partially off-the-grid property, additional due diligence is required.

If water is not readily available, there are two primary options. Water catchment and well water. The former is a lot more common on Maui than the later.

The water table on Maui is located down near sea level. If you are located at any sort of elevation, the cost to install a well may be prohibitive.

Water catchment is used extensively in Maui’s wetter areas, including parts of East Maui and the North Shore. With water meters becoming scarcer, some agents have advertised water catchment as an option in dryer areas.

Any one considering water catchment should consult an off-the-grid or water catchment expert. An expert will be able to assess the viability of water catchment for your needs. They will look at area rainfall and expected water usage to make recommendations on the storage capacity you might need.

Off-grid electrical systems have come a long way in the last 20-30 years. Off-grid doesn’t demand a Swiss Family Robinson lifestyle. Solar energy contractors can design systems suitable for heavy appliance use.

It is worth contacting local solar system installers to get an estimate of your energy system costs. If you have a lot near electrical infrastructure, but connecting to the grid entails expensive power pole installation or extensive trenching, it might be worth pricing out an off-the-grid system. It may prove to be more cost-effective and more resilient.

Internet Access

With the number of people who work from home, quality internet access is a must. Spectrum provides Cable Internet to most of Maui. Hawaiiantel’s footprint of fiber optic Internet is expanding.

In the areas where no fiber optic or cable is available, there are satellite services, including Starlink. Check with Hawaiiantel and Spectrum Cable to determine availability in the areas you are considering.

Determining Property Boundaries

Survey and Boundaries

In some cases, the seller of a property may have had their property surveyed with boundary corners marked prior to going to market. If not, survey is a standard part of the Hawaii Purchase Contract.

Typically, the sellers pay for the survey. It’s worth noting that the surveys provided typically only provide boundary corners and show the location of any encroachments or recorded easements.

If you are planning to build, paying extra and completing a topographic survey may make sense. Architects and builders use topographic maps for construction plans. If it is a more complex or heavily forested lot, it might also be worth paying extra to have points on line between the boundary corners.

Evaluating Easements

Easements are another important consideration when looking at vacant land. It is paramount to ensure that you have legal access to any property you are considering. It is also essential to evaluate any easements that might encumber the property, such as any access easement that a neighbor or utility company may have through the property.

While a Realtor can help you identify the easements on a property, you may want to consult with a real estate attorney to verify the legal status and necessity of any easements associated with the property.

Reviewing Covenants, Conditions and Restrictions (CC&Rs)

Buyers should review CC&Rs to determine if neighborhood association rules are compatible with building plans. The strictness of CC&Rs varies widely on Maui.

On the more restrictive end, covenants can dictate minimum home sizes, architectural styles, paint colors and landscaping. It is also worth checking to see if any restricted uses in the CC&Rs limit your intended use of the home.

Check the Condo Docs, too!

What? I thought we were talking about land and not condos. Well, on Maui, a growing number of land sales are for spatial Condominium Property Regimes (CPRs). Confused? The condensed explanation is that properties with zoning that allows for multiple residential structures may be converted into a CPR.

Each structure and an associated area of land becomes a unit within the condo. For a deeper dive, you can check out our in-depth explanation, “What the FAQ is a Residential Condo?”

Unlike a subdivision, the CPR process does not create additional entitlements. The units within a condo share the entitlements of the original lot.

Therefore, it is imperative to understand what entitlements are associated with the Unit you are buying. CPRs can also have their own CC&Rs and house rules.

Not all CPR documents are created equally. It is worth having an attorney familiar with Hawaii Condo law review the CPR documents during the document review period of your purchase contract.

Environmental Considerations

From safety, to usability, to cost, there are variety of potential impacts to consider when reviewing the environmental considerations of a property

Flood Risk

Buyers should evaluate a property’s vulnerability to flooding, whether from the ocean or streams. The Hawaii Flood Hazard Assessment Tool is an excellent place to start.

It provides information on the FEMA flood classification for a property. Extreme weather events can cause flooding outside of FEMA flood zones.

If the property you are considering is close to a shoreline or a stream but not in a FEMA flood zone, it is worth checking with the county to see if they deem the area to have a higher flood risk. Of course, it is also worth asking sellers if they are aware of any previous flood history with a property.

It is worth checking if the property is in a potential tsunami evacuation zone if you are in coastal areas. The National Ocean and Atmospheric Administration has Tsunami Evacuation Zone maps.

Building in and near flood zones may impact the design requirements for your home, and will likely impact your home insurance rates.

Topography

It is worth considering how topography can impact your building plans. Will the property require significant grading?

Are there any steep areas that could be subject to erosion? How easy will it be to create a driveway to a potential home site?

Orientation and Air Flow

Related to topography are the subjects of orientation and airflow. Maui’s tradewinds bring rain and cooling breezes. There are certain locations on the island where the winds can be strong and gusty.

How you are oriented with regards to the wind can have a big impact on the enjoyment of your home. You may not spend as much time in your outdoor spaces if they face directly into gusty tradewinds.

Maui also has areas that get significant amounts of rain. Airflow can be your friend if you are looking at places in the wet areas of the North Shore or East Maui.

Stagnant air and high moisture are a recipe for mold and mildew. Have we mentioned that we’re weather geeks? We’re happy to chat about the different climate zones and microclimates on Maui as well.

Neighboring Properties

With its combination of mountains and ocean, many properties on island offer beautiful views. When looking at a view property, it is worth considering whether those views are forever or if buildings or vegetation could compromise the view.

Could construction on a neighboring property block all or a portion of the view? What about vegetation? With a 365-day growing season, trees and landscaping may obscure what were once beautiful views. If that is a concern, it may be worth checking CCRs if there are view corridors or height restrictions on buildings and vegetation.

Awareness of neighboring properties extends beyond views. Does the property you are considering offer privacy from neighbors?

What is the zoning of your neighbors? If you are considering ag land, are you comfortable being next door to all permitted ag activities like keeping roosters or pig farming?

The Three Visit Rule

While falling in love with a property is easy, you want to ensure the love will last. It is worth visiting a property in the morning, midday, and evening to understand how it feels during different times.

If conditions allow, it is also worth visiting a property during different weather patterns. Visiting a property located in a windy area on a calm day may give you an inaccurate sense of how the property will live.

Helpful Contacts and Links For Land Purchases

Maui County Planning Department – 808-270-7735

Maul Electric – 808-871-2390

Spectrum Cable – 888-406-7063

Hawaiian Telcom – 808-643-3456

Maui Water Department – 808-270-7330

Maui County Website

Maui County Title 19 –Zoning       

Let us know if you want to talk to a land use consultant, architect, or Hawaii Real Estate attorney. We would be happy to send you the contact information for qualified resources.

Buying Land for Sale on Maui With The Maui Real Estate Team

Buying vacant land on Maui involves a series of important checks to ensure you make a wise purchase. Thorough due diligence is crucial, from understanding zoning laws and ensuring utility access to checking environmental factors and reviewing legal documents.

Consult with professionals such as real estate attorneys, planning consultants, and environmental experts to assist you through this process. This guide provides a comprehensive overview, but it’s always wise to seek tailored advice based on your situation.

Our team of dedicated agents is experienced representing buyers interested in purchasing land on Maui. We are experienced guiding buyers through their search and into the contract process while lining up the right outside resources along the way.

Contact The Maui Real Estate Team to set up a free consultation to discuss your needs. Use our site to search for current Maui Vacant Land Listings.

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