Understanding the difference between leasehold property in Hawaii and fee simple meaning is actually very simple! (Scroll Down to See Video) With leasehold you DO NOT own the land the home or condo sits on. With fee simple you do! A leasehold property will have an additional monthly lease fee that you have to pay to the land owner. (This fee typically goes up over time.) The lease is renegotiated every 10 years (typically) Leasehold properties are also very difficult to finance and are usually all cash deals. Leaseholds are also much less expensive than fee simple properties because of this extra cost and the risk associated with not owning the land. The good news is the many leasehold properties are converting to fee simple. Which simply means that the land is purchased from the landowner for an agreed upon price. If this happens at a condo, you may be assessed this cost with a one-time assessment or an additional monthly assessment that is paid over time.
Please watch this brief video. If you are in the market to buy or sell a condo in Hawaii, you can reach Eric West at 808.298.2030 Mahalo!