Home Purchase Hawaii

[LiveSimple]

Starting to research home buying in Hawaii

https://www.remax.com/hi/lahaina/home-d ... 195/397999
An 67% leasehold ownership position is being offered on this spectacular turn-key 2 bed 2 bath Kahana Village oceanview unit #9.


What is this leasehold ?
How is home buying different in Hawaii than the other states.
Is hurricane is an issue ?

Really comparing Florida properties, Hawaii properties seems cheaper... why ?

[cadreamer2015]

Hurricanes sometimes have hit Hawaii, but with not nearly the frequency that they hit Florida.

In virtually every other state essentially all real estate is fee-simple, that is you own the land under your house. In Hawaii there is still a lot of land owned by various estates which originated during the period of the monarchy. These estates lease out the land, typically with 99 year leases. You pay annual lease rent for the land to the land owner. When the lease is up you can usually renew the lease but often at a higher land rent.

Another difference between Florida and Hawaii is state income taxation. None in Florida while there is a fairly progressive income tax system in Hawaii. Cost of living is higher in Hawaii as most consumer goods need to be shipped in from the Mainland on expensive US flagged ships, courtesy of the Jones act.

[cadreamer2015]

In reading the listing this is a timeshare in which you get to occupy the unit 67% of the days of the year. So you don’t own 100% of the unit.

So, while accurate, my previous post on leasehold home sales in Hawaii is irrelevant to this particular property. What the listing calls a 67% leasehold is buying the right to occupy the unit 244 days per year, while someone else occupies the unit the other 121 days of the year.

[pizzy]

“New 67% owner shall have rights to 8 months/244 Days of usage. Exact months/dates you want is totally up to you as the majority owner!”

Do you have a plan for the remaining 121 days?

[Jimbo Moneybags]

Timeshare...need we say more.

[LiveSimple]

In reading the listing this is a timeshare in which you get to occupy the unit 67% of the days of the year. So you don’t own 100% of the unit.

So, while accurate, my previous post on leasehold home sales in Hawaii is irrelevant to this particular property. What the listing calls a 67% leasehold is buying the right to occupy the unit 244 days per year, while someone else occupies the unit the other 121 days of the year.

Thanks, that is complex as well... than owning the property outright...
I do see now:
New 67% owner shall have rights to 8 months/244 Days of usage. Exact months/dates you want is totally up to you as the majority owner! Being sold turnkey furnished.

[LiveSimple]

“New 67% owner shall have rights to 8 months/244 Days of usage. Exact months/dates you want is totally up to you as the majority owner!”

Do you have a plan for the remaining 121 days?

Better to rent long term month to month, than owning a timeshare... not interested in timeshare.

Also want to understand the nuances of real estate ownership in Hawaii and on Taxation.

Planning is that will retain the small footprint ( small home ownership) in the Continental United States as state of residency...and to come back as needed...

[heartwood]

You should get the details of the leasehold arrangement to understand your position. We own a condo on Oahu with a 50 yr term in the leasehold, expiring July 15, 2027. Kamehameha Schools (Bishop Trust) owns the land. We pay KS leasehold rent, plus separate real estate tax to the state and maintenance fees to the condo assoc.

Despite years of association negotiations with KS we will no longer own the apartment in 4 yrs time. We understood that when we bought it 10 yrs ago. We have no written promise, but current discussion is that we'll be able to continue occupying the unit at a market rent to be determined by KS, w/o any equity position.

[LiveSimple]

You should get the details of the leasehold arrangement to understand your position. We own a condo on Oahu with a 50 yr term in the leasehold, expiring July 15, 2027. Kamehameha Schools (Bishop Trust) owns the land. We pay KS leasehold rent, plus separate real estate tax to the state and maintenance fees to the condo assoc.

Despite years of association negotiations with KS we will no longer own the apartment in 4 yrs time. We understood that when we bought it 10 yrs ago. We have no written promise, but current discussion is that we'll be able to continue occupying the unit at a market rent to be determined by KS, w/o any equity position.

Understand, so you have pay more in rent at the current price, irrespective of the price you paid 10 years ago for the property.
Or walk away, with no equity // sell off, unless someone buys the property at the market price, knowing the lease expires in 4 years...

Good to know the intricacies of these in HI properties... may be that is why HI is cheaper than FL properties...( some at least )

[LiveSimple]

Fee Simple and leasehold explained...

https://www.konacondoupdate.com/what-is-land-tenure/

[CWhea1775]

I don't think this is a traditional "timeshare", this is 67% partial ownership of a unit. So you are going to have some sort of relationship with the other owners if you buy, and will only at most be able to occupy the unit 2/3 of the time. I would anticipate that most of these units are used by owners for vacations and then rented out the rest of the time as vacation rentals.
One issue not discussed is in a complex like this your HOA dues will be very high, as they will be paying for maintenance, etc. Think thousands per month on top of your mortgage. That price for a 2/2 oceanfront on Maui is actually quite low, so some due diligence is needed there as well. Rental units need renovation and upgrades regularly. That one looks OK now but a cycle of several tens of thousands for new furniture, appliances, etc. every X years also needs to be in your plans if you buy.
It is in a very nice area of Maui!

[SeattleLaw]

In Hawaii there is still a lot of land owned by various estates which originated during the period of the monarchy. These estates lease out the land, typically with 99 year leases. You pay annual lease rent for the land to the land owner. When the lease is up you can usually renew the lease but often at a higher land rent.

This is really interesting! Whose estates are they, and do they own the land fee simple? Given the cost of some properties in HI, I’d be really uncomfortable “leasing” the land, even if it was for 99 years. When you sell a property, can the estate that owns the land choose who you can sell to? It seems like a property buyer would be dealing with two sellers (home owner and land owner). And if you have 60 years left in your leasehold and you sell, does the new owner inherit that 60 year remaining lease, or does it reset?

[Soon2BXProgrammer]

In Hawaii there is still a lot of land owned by various estates which originated during the period of the monarchy. These estates lease out the land, typically with 99 year leases. You pay annual lease rent for the land to the land owner. When the lease is up you can usually renew the lease but often at a higher land rent.

This is really interesting! Whose estates are they, and do they own the land fee simple? Given the cost of some properties in HI, I’d be really uncomfortable “leasing” the land, even if it was for 99 years. When you sell a property, can the estate that owns the land choose who you can sell to? It seems like a property buyer would be dealing with two sellers (home owner and land owner). And if you have 60 years left in your leasehold and you sell, does the new owner inherit that 60 year remaining lease, or does it reset?

My only experience with leased land is not professionally, and in Palm Springs CA and not HI.. There is a lot of housing on land leased from Native Americans. On leased land, a bank wont finance for longer then the remaining lease. So if there is 25 years left, they won't give you a 30 year note. Therefore, at least for the well managed properties, they start to work the process for renewing leases before that time point. The incentive to the homeowner to renew early, is that if they want to sell, their house is more desirable.

[Glockenspiel]

FWIW, I recently stayed in a condo about 1/2 mile down the road from this property and due to a car accident on the main road back towards the airport for our return flight, we were delayed, sitting on the highway for an hour, while they cleared the accident. This caused us to almost miss our flight.

Keep that in mind if you purchase in this location, that there's really only ONE feasible road back towards Kahului if you need to make a trip to Target, Costco, Walmart, the airport, or a job in the central population corridor of the island. Great area of Maui though, I really enjoyed our trip. Hurricanes are not a major issue to worry about in Maui.

Be prepared to spend a lot more on groceries and other consumer goods on Maui than on the mainland. Though I'd consider it a fair trade-off.

[Sandtrap]

Starting to research home buying in Hawaii

https://www.remax.com/hi/lahaina/home-d ... 195/397999
An 67% leasehold ownership position is being offered on this spectacular turn-key 2 bed 2 bath Kahana Village oceanview unit #9.


What is this leasehold ?
How is home buying different in Hawaii than the other states.
Is hurricane is an issue ?

Really comparing Florida properties, Hawaii properties seems cheaper... why ?

Hard pass on any "leasehold" and variant of what you are considering.

These Hawaii properties are cheaper....because of the conflagurations of ownership. Huge avoid.
You will get "chewed up" on the purchase, ownership, and resale.....and, often, stuck with it".

Shop for a normal home purchase in Hawaii. Mortgage or cash. Straight homeownership, 100%.
FEE SIMPLE (only and only and only and only).
Ownership not shared, not anything. Like a normal home.

Buy in is 1 million for "a" house that has walls and plumbing and electrical and a roof, on 5000 square feet of "FEE SIMPLE" land with a road to it. This is Hawaii. Anything less than this....walk away.

Good luck on your efforts if you want to try this purchase or anything like it in Hawaii.

If you are moving to Maui, consider a cute nice cottage, 2-3 bdrm, 1-2 bth, carport, on 5000 sf of land that you can put a small garden out back, front porch, in "Kula", "Makawao", etc.
The culture is warm and completely diverse and very "Aloha" and unique to "CONUS" (mainland).
Hawaii (Maui) No Ka Oi

dis laimer: of course there are always exceptions......
j

[SuzBanyan]

While Sandtrap is the authority on everything real estate as it comes to Hawaii, I want to point out one other possible complication if you are considering a condominium instead of a single-family. For many condominiums, the financing can be odd because the property is considered a “condo-hotel.” We own 2 units in a Maui “condo-hotel”. We used our units for STR through a well known property management company, as do many other owners of the property. Some are also owned by a timeshare company and some are owner-occupied. As a result, financing for purchase or refinancing will probably need to involve a Hawaii lender and may be at rates higher than you might find in other states.
We do have Hurricane coverage insurance, as well as general condominium protection. Our HOA (called an AOAO for Association of Apartment Owners) is struggling with higher costs for insurance coverage and requiring owners to carry certain minimums. Generally, even with hurricane coverage, the insurance costs are not crazy.
I think the market is cooling somewhat. I used to get unsolicited offers to buy every week or so and now only get them monthly!

[LiveSimple]

Thanks Sandtrap and SuzBanyan

Sure now we are comparing HI in the right perspective.

Thanks on If you are moving to Maui, consider a cute nice cottage, 2-3 bdrm, 1-2 bth, carport, on 5000 sf of land that you can put a small garden out back, front porch, in "Kula", "Makawao", etc.

SuzBanyan not interested in condos, if need be can rent for a month the condos