I receive several calls a week on the Kahala Beach Apartments. For most people that see something that "looks too good to be true", it normally is...
Oceanfront Living at The Kahala Beach Apartments
Too Good to Be True?
Most people initially see the Kahala Beach condos on Realtor.com or Zillow and think to themselves, "Wow! I can buy an oceanfront condo in Kahala under $100,000". I don't blame them. Everyone is looking for a deal. When oceanfront homes in Kahala start around $7 Million or more, if these units were fee simple, they'd be at least $2-3 million apiece, like the oceanfront condos on Diamond Head's Gold Coast.
Kahala Beach Swimming Pool
Unfortunately, the Kahala Beach condos are Leasehold and the land lease only has 5 years left (expires in 2027). I've also heard that Kamehameha Schools, the Lessor (land owner) has been taking back units already where the owners have walked away.
Russian Roulette
Can the land owner really kick you out once the land lease expires? The answer is yes. A case study is some old apartment building condos in Kailua that were owned by Kaneohe Ranch. As the land lease was coming up for expiration, speculators came in and started buying them up at $20,0000-$30,000 a piece. Low and behold, when the land lease expired, they were all evicted. The buildings were then leveled, the land was sold to DR Horton and they built Ka Malanai on the site of the old leasehold condos.
I hate to say it, however I've used the analogy of owning at Kahala Beach is like playing Russian Roulette. You may not want to be the last one holding it.
$100k Down and $4k/Month
If someone were to buy a unit at Kahala Beach today, you'd be looking on average to put $100,000 down and have carrying costs for $4,000 per month for the remainder of the land lease, maintenance fees and property taxes. What if you were to apply that same math of $100,000 down and $4,000/month and buy something fee simple for, say $800,000. It might not be oceanfront, however perhaps a condo on the marina in Hawaii Kai or a place like Kukilakila on Enchanted Lake in Kailua?
I've been in real estate now for over 21 years now and live just a few miles down the road from the Kahala Beach. The reason why I have never bought one personally is that I'd rather purchase something that is fee simple and would go up in value over time (not down). If however, money is not an issue for you, perhaps the Kahala Beach makes sense for strictly a lifestyle play? It's hard to beat oceanfront living in Kahala, however if something is "too good to be true"...