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I don't understand why ANYONE would buy a leasehold property...
While I personally wouldn't buy leasehold due to my personal circumstances, I can understand why it would make sense in certain, very limited situations. As an investment it's all about numbers. Taking into account things like potential rental income, maintenance fees, lease rent, length of lease, purchase price, etc., it could very well be a decent investment. It can even make sense if you buy it as a residence in certain circumstances. But in general I agree buying fee simple is the way to go.
you should use an engine that tells you the property status among other key stats including maintenance fee. The information that Zillow is providing you with isn't enough.
Of course there is a catch - it's called leasehold. Look it up.
On top of that, there are plenty of active scams on hawaii listing websites (Craigslist often has rental properties for an absurd low price). Plenty of con men making fake rental or house listings pretending to be the owner and hoping some rich investor looking for a house wires them money. Like everything, it's about doing the research, making phone calls, and validating the legitimacy of the listing.
Since this thread I have been paying attention to land ownership when looking at for sale ads. But below is a new twist. The ad says:
"95-646 Hanile St APT C105,
Mililani, HI 96789
1 bed 1 bath 537 sqft
FOR SALE
$123,100
Zestimate®: $193,622
EST. MORTGAGE
$452/mo
Get pre-qualified
Listed by:
For Investors only! Owner is selling a fee simple property with a lease that expires on 12/31/2041. Current lease rent is $273.07 per month with the next renegotiation scheduled for 12/31/2026. Lessee is responsible to pay association fees, real property tax and maintenance of the unit. Information advertised is based on tax records and cannot be verified. No showings allowed. Please do not contact the Lessee directly."
My question: If this property is fee simple, why is there still a lease??
Since this thread I have been paying attention to land ownership when looking at for sale ads. But below is a new twist. The ad says:
"95-646 Hanile St APT C105,
Mililani, HI 96789
1 bed 1 bath 537 sqft
FOR SALE
$123,100
Zestimate®: $193,622
EST. MORTGAGE
$452/mo
Get pre-qualified
Listed by:
For Investors only! Owner is selling a fee simple property with a lease that expires on 12/31/2041. Current lease rent is $273.07 per month with the next renegotiation scheduled for 12/31/2026. Lessee is responsible to pay association fees, real property tax and maintenance of the unit. Information advertised is based on tax records and cannot be verified. No showings allowed. Please do not contact the Lessee directly."
My question: If this property is fee simple, why is there still a lease??
The posting is poorly written in my opinion. But I think this ad is trying to sell the fee interest only in the property ... not the unit itself. Which means the "leasee" is the owner of the leasehold condo. They are living there. Which is why the ad says do not contact the leasee. And it says the leasee pays the taxes and hoa fees. And it says no showings.
So it appears they are selling the fee interest in the property only. And for the price, you get to collect the lease rent for the periods defined. But you don't actually own the unit and the unit owner lives there. At the end of the lease term, as the fee owner, you may then be able to reclaim the unit.
I looked on some other sites to try and verify this listing and could not find it. So it also may or may not be a legit listing. Normally the fee interest must be offered to the leasehold owner first. At least I thought that was the case.
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