Leasehold Hawaii

Properties in Hawaii

If you are interested in purchasing any condos in Hawaii or one of the sunny by the sea homes, you need to know more about one type of real estate property that is very common in Hawaii but less common in the mainland – a leasehold property. Leasehold properties are generally listed for much lower prices than fee simple properties (for more information on fee simple properties, c heck the Fee Simple Properties in Hawaii” page). Before you decide whether a leasehold property works for your need, it is best to understand how it works.

What is a leasehold property?

A leasehold property owner has the right to use the land for a limited amount of time, but does not own the land. The individual lease contract generally specifies the length of the lease as well as all the limitations there are for using the land. In exchange for being able to use the land the buyer of any leasehold property, i.e. the lessee pays a monthly or annual ground rent. When you see a real-estate listing for a leasehold property it should have the letters LH next to the title, which stand for leasehold.

Why should you buy a leasehold property?

The main advantage of buying leasehold property is that you can pay less for homes and estates. The main disadvantages are that you need to factor in the limitations of a lease contract, the duration of the lease contract as well as the monthly ground rent. For shorter lease contracts getting financing could be a bit more difficult than for a regular “fee simple” property. If you are cash buyer or investor and are not interested in making a long term investment in a property in Hawaii, buying a leasehold property might work better for you.