Written by Amber Lane | Photo by Amber Lane

If you're new to Real Estate in Hawaii, there's something you should know. If you find a really GREAT deal, and you're wondering if it's too good to be true - it's probably leasehold.

Let me explain....the difference between fee simple vs leasehold land tenure.

Fee Simple ownership is the most complete, absolute ownership of the land, and any improvements on it.

Leasehold ownership is created by a fee simple owner (lessor) entering into a ground lease with a leasehold purchaser (lessee).

The lessee pays the lessor a monthly lease rent for use of the land, and does not actually own the land, just the rights to use it exclusively, or freely transfer ownership (sell or give away) for the remaining years of the lease. A ground lease will usually have a clause in it providing that any improvements such as a home or building will be surrendered to the Fee Simple land owner upon expiration of the lease.

When purchasing leasehold property, a buyer would be responsible for: property taxes, maintenance fees, and a monthly lease-rent....on top of a mortgage, if financed. There are instances where a leasehold property can be a great deal depending on the terms, but it’s important to factor in all the variables when considering if this is the best financial move for you.

Contact me