I’m a Hilo-based realtor who often works with buyers interested in homesteading, off-grid properties, agricultural land, and land-only purchases on the Big Island of Hawaiʻi.
“Homesteading” can mean different things to different buyers. For some people, it means growing food, raising animals, living off-grid, or creating a more self-sufficient lifestyle. For others, it simply means buying land, building slowly, and having more privacy and space.
Buying land on the Big Island can look simple from a Zillow search. A few acres, a low price, some privacy, maybe room for a garden, animals, solar, catchment, and a slower lifestyle.
But the real estate side of homesteading is where things get complicated.
Before you buy, you need to understand zoning, permits, access, water, wastewater, financing, insurance, lava zones, and what it may actually cost to make the property usable.
I’m not here to tell you what to grow, how to farm, or what kind of livestock makes sense for your property. My focus is the real estate side, so you can make a more informed decision before you buy.
Below are some of the most common questions I hear from buyers.
FAQ quick links
- Why do I see big, cheap pieces of land on Zillow?
- Can I finance vacant land?
- Can I build a house on agricultural land?
- Can I have more than one house on agricultural land?
- Can I live in a tiny home, shed, tent, yurt, or RV on my land?
- Can I get a tax break if I farm the land?
- Is there a Right to Farm law in Hawaiʻi?
- Can I get financing for an unpermitted house?
- Can I get an off-grid loan?
- Can I get homeowners insurance in Lava Zones 1 and 2?
- What about seller financing?
- Do I need permits to clear land?
- How do I calculate the total cost of buying land?
- Is catchment water normal?
- What happens if I get caught living in an unpermitted structure?
- What is the biggest mistake homesteading buyers make?
Why do I see big, cheap pieces of land on Zillow?
This is one of the first things buyers notice.
On the Big Island, it’s still possible to find large lots at prices that look unbelievably affordable compared to many mainland markets. But the price usually reflects the reality of the property.
A cheap parcel may have one or more of the following issues:
- No cleared road access
- No county water
- No power at the street
- Expensive SSPP or utility connection costs
- Heavy jungle or lava rock
- No survey or staking
- In a Flood Zone
- Poor soil or drainage
- A higher-risk lava zone
- Limited financing options
- A subdivision with road fees or weak infrastructure
Not to mention, the time I looked on Google Earth and saw fifty junk cars in the back of the lot that the selling agent didn’t know about!
Cheap land is not always bad land. But buyers need to understand why it’s cheap before falling in love with it.
Can I finance vacant land?
Sometimes, but land financing is more limited than home financing.
Many traditional mortgage lenders do not finance raw vacant land. When they do, they often require a larger down payment, a shorter repayment period, and a strong borrower profile. Down payments around 50% are common with this type of land loan.
The good news is that buyers who plan to build a permitted home may have more options. I have had clients successfully use vacant land loans with smaller down payments and interest-only terms, especially when the land loan is tied to a future construction loan.
A few Big Island credit unions publish vacant land or vacant lot loan options. Terms can change, and vacant land financing is more specialized than a standard home loan, so buyers should contact the credit union directly to confirm current rates, down payment requirements, balloon terms, and whether the property type qualifies.
| Credit Union | Land Loan Page |
|---|---|
| HFS Federal Credit Union | Vacant Land Loans |
| Hawaiʻi Community Federal Credit Union | Vacant Land & Construction Loans |
| CU Hawaiʻi Federal Credit Union | Rates Page, including Vacant Land Loans |
| Hawaiʻi First Federal Credit Union | Loan Rates, including Vacant Lot Loans |
Seller financing sometimes happens, especially with vacant land, but the terms are usually very different from a normal 30-year mortgage. A seller-financed land deal may have a shorter term, a higher interest rate, and a balloon payment after 3, 5, or 10 years.
For many buyers, the key question is not just, “Can I buy the land?”
It’s, “Can I afford the land, the clearing, the driveway, the septic system, the water system, the power system, and the house?”
Can I build a house on agricultural land?
Often, yes. But it depends on the property.
Hawaiʻi has both County zoning and State Land Use designations, and both matter. A property may be County-zoned Agricultural and also be in the State Agricultural District. That distinction can affect what kind of dwelling is allowed and whether the dwelling needs to be tied to agricultural use.
Under Hawaiʻi law, a “farm dwelling” is generally a single-family dwelling located on and used in connection with a farm, or where agricultural activity provides income to the family occupying the dwelling. State law also has special language about single-family dwellings on lots that existed before June 4, 1976.
In simple terms: do not assume that “Ag zoning” automatically means you can build anything you want. You still need to check zoning, State Land Use, lot history, setbacks, access, utilities, and permit requirements.
Deeper building on Ag land post: What dwellings can you legally build on agricultural land in Hawaiʻi County?
Can I have more than one house on agricultural land?
It depends.
In 2024, Hawaiʻi County passed Bill 123, now Ordinance 24-70, which expanded the County’s accessory dwelling unit (ADU) rules. On the surface, it looked like many County-zoned agricultural properties could add ADUs.
This is where many people get confused. A property may be zoned Agricultural by Hawaiʻi County, but that does not automatically mean a regular ADU is allowed. You also have to look at the property’s State Land Use designation.
If the property is County Agricultural + State Urban, an ADU may be possible, but if the property is County Agricultural + State Agricultural, the only option may be a farm dwelling or additional farm dwelling.
That distinction matters because a farm dwelling is not just a second house, guest house, or rental. It has to support the agricultural use of the property.
For an additional farm dwelling, the County may require an Additional Farm Dwelling Agreement, or AFDA, along with a farm plan or other evidence showing real agricultural use.
So, a large parcel does not automatically mean you can build multiple homes just because there is room. The better question is whether the extra dwelling is allowed under both County and State rules, and whether it is tied to a real farm use.
See my “Bill 123 is a Bust” post: So You Thought You Could Build an ADU on Your Ag Land? Think Again.
Can I live in a tiny home, shed, tent, yurt, or RV on my land?
Possibly, but it depends on whether the structure can be legally permitted and supported with proper wastewater, water, access, and utilities.
The key issue is not just the type of structure. It is whether Hawaiʻi County will recognize it as a legal dwelling on that specific property. A tiny home, shed conversion, yurt, or other alternative structure may be possible if it meets zoning, building, and sanitation requirements.
Yurts are a good example. I have spoken with the folks at Yurts of Hawaiʻi, and they do offer fully permitted versions of their yurts, including septic installation. You can find more information here: Yurts of Hawaiʻi.
RV or tent living is more limited and should not be assumed to be allowed as a permanent residence.
The practical answer is this: alternative living structures may be possible, but only if they are properly permitted and the property can support the required systems.
Can I get a tax break if I farm the land?
Possibly. “One cow farms” are no longer possible.
Hawaiʻi County has agricultural property tax programs (officially called the Dedication for Agricultural Use), but they now require an application and qualification. The County’s Real Property Tax Division has agricultural program information, forms, and requirements for agricultural dedication and related programs.
The important thing to understand is that “I plan to grow food someday” is not the same as qualifying for an agricultural tax benefit. You generally need to apply, document the use, and comply with the program requirements.
Also, agricultural tax benefits can come with commitments. If the property is dedicated to agricultural use and you later stop complying, there may be consequences.
Deeper Ag tax exemption Post: Steps to Apply for the Ag Use Exemption in Hawai‘i County
Is there a Right to Farm law in Hawaiʻi?
Yes. Hawaiʻi has a Right to Farm Act.
In general, the law protects farming operations from being declared a nuisance if the operation is conducted in a manner consistent with generally accepted agricultural and management practices.
That does not mean a farmer can do anything without rules. It does not override every zoning, environmental, animal control, water, pesticide, building, or health regulation. But it is an important protection in agricultural areas, especially where farming activity may create noise, dust, smells, or other impacts that non-farming neighbors may not expect.
Can I get financing for an unpermitted house?
Usually, this is difficult.
Many homes on the Big Island have some unpermitted improvements. Sometimes it’s a small addition or enclosed area. Other times, the entire structure is unpermitted.
If the full structure is unpermitted, you may be able to get a vacant land loan based on the value of the land, but not the value of the structure. That is very different from getting a normal residential mortgage.
Lenders and appraisers care about permits. If a home is fully unpermitted, many traditional lenders will not finance it. If only part of the home is unpermitted, the lender may ignore that area in the appraisal, require repairs, or decline the loan depending on the situation.
This is why you often see nicer-looking unpermitted homes listed as “cash only.”
Can I get an off-grid loan?
Yes, it can be possible. But it depends on the lender, the property, and the off-grid systems.
Off-grid does not automatically mean unfinanceable. A permitted home with a good solar system, catchment system, septic system, and normal residential functionality may be financeable. But the lender will want the property to be safe, functional, insurable, and marketable.
I have seen at least one major lender require a generator backup for the solar electrical system. Once that requirement was met, they were comfortable with the off-grid setup.
For most loan programs, the home still needs to be a real residence, not just a camp or unfinished structure. USDA’s single-family housing programs, for example, are focused on homes used as a primary residence and require the home to be modest, decent, safe, and sanitary.
The more unusual the property is, the more important it is to speak with a local lender before making an offer.
Can I get homeowners insurance in Lava Zones 1 and 2?
Usually, yes, but the cost and availability can vary a lot.
On the Big Island, lava zone matters. Homes in Lava Zones 1 and 2 can be much harder and more expensive to insure. The Hawaii Property Insurance Association, often called HPIA, was created to provide basic property insurance for people who cannot obtain coverage in the private market, including properties in harder-to-insure lava areas.
Property insurance for Lava Zones 1 and 2 through HPIA can be expensive, with annual premiums often around $4,000 to more than $6,000 for a typical home. As a last-resort insurer for high-risk areas, HPIA limits coverage to a maximum of $450,000.
For buyers, insurance is not just a side issue. If you need a loan, the lender will require acceptable insurance. That means you should check insurability early, especially for properties in Lava Zones 1 and 2, off-grid homes, older homes, and unpermitted structures.
More about lava zones: New to the Big Island? What lava zones mean for your home search
What about seller financing?
Seller financing is more common with vacant land and unpermitted homes than with normal residential homes, but it depends entirely on the seller. Some sellers own the property free and clear and are willing to accept payments over time. Others want cash at closing.
Common seller-financing terms may include:
- A substantial down payment
- A higher interest rate than conventional financing
- A shorter term
- A balloon payment
- Buyer responsibility for taxes, insurance, and maintenance
Seller financing can help buyers who cannot qualify for a traditional loan, but it also carries risk. You need to understand the terms clearly before signing.
Do I need permits to clear land?
It depends on how much clearing, grubbing, grading, or drainage change is involved.
For example, Hawaiʻi County Public Works says a grubbing permit is required when the area grubbed exceeds one acre, or when drainage patterns affecting neighboring properties are changed.
That does not mean smaller projects have no rules. If you are cutting a driveway, changing drainage, grading, installing a septic system, or preparing a house pad, you may trigger other requirements.
How do I calculate the total cost of buying land?
The purchase price is only one part of buying land. A parcel may look affordable online, but the real cost depends on what it will take to make the property usable.
In order to understand the total cost, you should check:
- Road access and road maintenance fees
- Electricity availability
- SSPP or utility connection costs
- Internet and cell service
- Water source, such as county water, catchment, or well
- Septic or wastewater feasibility
- Driveway access
- Clearing and grading costs
- Drainage issues
- Survey or staking needs
- Lava zone and flood zone
- Zoning and State Land Use designation
- Building permit feasibility
On the east side of the Big Island, many rural properties use catchment water and private septic systems. Some areas have power nearby, while others may require expensive utility extensions or a full off-grid solar setup.
The big lesson is that cheap land is not always cheap once you add access, water, wastewater, power, clearing, permitting, and construction costs.
Is catchment water normal?
Yes, in many parts of East Hawaiʻi, catchment water is common.
For many buyers from the mainland, this feels unusual at first. But in areas like Puna, Volcano, and parts of Hāmākua, catchment can be a normal part of rural living.
That said, a catchment system needs maintenance. Tanks, covers, gutters, filters, pumps, pressure tanks, UV systems, and water testing all matter. For financed purchases, the lender may also require certain water tests.
More about catchment tanks:
From Roof to Faucet: Understanding Catchment Water on the Big Island
What to Look for When Inspecting a Catchment Tank
What happens if I get caught living in an unpermitted structure?
If you are living in an unpermitted structure, or using land in a way that violates County rules, the most likely trigger is usually a complaint. That complaint could come from a neighbor, tenant, contractor, visitor, buyer, or someone else familiar with the property.
You can see many unpermitted structures listed for sale online, including on Zillow. But once a property is publicly marketed, it becomes more visible. That visibility can give a concerned neighbor or other party an opportunity to report it to the County.
I have personally seen a property go up for sale, followed by the owner receiving a letter from the County requiring them to bring the structure up to code and permit it, or remove it.
What happens next depends on the situation, but it can include a County inspection, a notice of violation, fines, and an order to stop using the structure as a dwelling until the issue is corrected.
In some cases, the owner may be able to correct the problem by applying for permits, installing proper wastewater systems, or bringing the structure into compliance. In other cases, the structure may not be legal without major changes, or possibly not at all.
The biggest practical risks are not just the fines. An unpermitted structure can also affect resale, insurance, financing, appraisals, rental use, and your ability to safely and legally occupy the property.
The simple answer is this: if you get caught, you may be forced to stop living there, pay fines, and either legalize the structure or remove it.
What is the biggest mistake homesteading buyers make?
The biggest mistake is falling in love with the dream before understanding the property.
The dream might be good. The land might even be good. But each property has its own constraints.
Don’t make an offer on land before finding out:
- Can I legally use the property the way I want, including building, farming, and living there?
- Can I get financing and insurance for this specific property?
- Can I access the property, and what will it take to make it usable?
- Can I afford the full cost, including clearing, driveway, staking, septic, water catchment, solar, permits, plans, materials, labor, and temporary living costs?
Homesteading on the Big Island can be a great fit for the right person. But it rewards buyers who are practical, patient, and willing to do the homework.
Final thoughts
The Big Island is one of the few places where buyers can still find rural land, agricultural zoning, off-grid homes, and space to create a more self-sufficient lifestyle.
But homesteading here is not just about buying land and starting a garden. As you can see it is more complicated than that, you need a realistic understanding of what it takes to live on rural property on Big Island.
My role is not to tell you what to farm or how to live. My role is to help you understand the real estate side so you can make a better decision before you buy.
Aloha,
Dan
