Скачать или смотреть Hawaii Leasehold vs Fee Simple What You’re Really Paying For

In this leasehold series we’ve already talked about monthly lease fees, surrender clauses, and the core difference between leasehold and fee simple.

Now let’s talk about why some people actually choose leasehold.

I owned a leasehold unit at Kiahuna Plantation for 18 years, and I’ve been selling in that resort — and others like it — since 2004. So, this isn’t just theory for me. I’ve lived it, and I’ve watched a lot of other people buy leasehold, too.

In our case, it came down to price. When we bought in 1998, we paid $65,000. That was the number that worked for us. The rental income covered the land lease fee and other expenses. What it didn’t cover was the mortgage — which is why the price point had to be low. That’s a pretty common scenario.

Think of leasehold ownership kind of like leasing a space in a shopping center versus buying the building outright. Your buy-in price is lower, but your monthly costs will be higher. On the flip side, a fee simple property is more expensive upfront, but your monthly costs are usually lower.

In a way, if you own long enough, you are paying the same as a fee simple property.

Take a unit at Kiahuna with a $1,800/month land lease fee. Multiply that by 12 months and then by the 25 years left on the lease. That’s $540,000. And that’s not even factoring in the step-up clause — meaning that $1,800 likely increases every 10 years.

That said, there can be tax advantages, and for people who want to vacation here often, the money saved by staying in your own property instead of booking rentals adds up fast.

There are plenty of people who own leasehold properties — and for them, it works. It just depends on your goals, your timeline, and what you’re comfortable with.

I hope you have enjoyed this video and have a great rest of your day.

View the entire Leasehold video series here:    • Kauai Real Estate: Understanding Leasehold...  

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Aloha!
Lynda Gill RS Lic. 63088
Hawai’I Life Real Estate Brokers 808.346.0056
[email protected]

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