Real Estate of Mind - Leasehold Property

(HawaiiNewsNow) - On today's Real Estate of Mind we continue our conversation about leasehold properties with Cliff Colvin of Coldwell Banker Pacific Properties. Check out the video and the notes from our conversation below.

Just because leasehold properties are more complicated, does not mean they should be dismissed without being considered.

They are:

  • In general, less expensive to buy
  • Can offer good return as an investment property

You have to evaluate each one separately.

Let's look at a two examples:

Waikiki Skyliner

  • Long Lease Term   (until 2058)  46 Years left
  • Fixed lease rent for the duration of the lease  ($28/mo for a typical 2 bedroom unit for the remainder of the lease)
  • Low "uncertainty" factor
  • Can get a 30 year loan for the next 10 years

Kahala Beach

  • Lease expires is 2027. 15 years left. Financing is difficult if at all possible. Owner financing is an option.
  • Lease rent is quite expensive and will negotiate again in 2017.   For a 2 bedroom typical lease rent paid to the landowner is $2200/mo.   This is on top of maintenance fees, taxes and the cost of the unit.
  • BUT… are living adjacent to a world class hotel, surrounded by a renowned golf course right on a beautiful stretch of beach in Kahala.  What a lifestyle!
  • Kamehameha Schools/Bishop Estate is the landowner and they are on record as not being willing to sell this land.

Leasehold properties may not be for everyone, but as long as you do your research before hand and know what you are buying, there are some chances to make a good return on your investment.

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