So often in real estate, I get asked "what can happen when the land lease expires on leasehold property?"
Kailua Case Study
There's a reason why I'm in Kailua today. The reason why is years ago, there was some low rise apartments across the street from me here. They were leasehold condos.
The Former Kailuan Leasehold Low Rise on Kailua Road
When the land lease was going to expire, all these speculators came in and started buying them up saying "they can't kick us out, can they?" That's why whenever you buy a leasehold property in Hawaii, there's a mandatory leasehold disclosure. So, people can't say "I didn't know".
Buyer Beware
This is a first hand experience. I always tell people that when the land lease is up, you need to move out because you signed a lease. What happened in this circumstance is there was these low rise apartments that were leasehold condominiums and people were buying them at $20,000-$30,000 each, thinking that they'll either extend the lease or they'll offer the land interest.
Low and behold, Kaneohe Ranch, which owned the land beneath what is now Ka Malanai sold the property to DR Horton and they developed fee simple condos here.
When in doubt, if you're buying a leasehold property in Hawaii, always pay attention to when that land lease expires. I always explain to my clients that in the worse case scenario, you've got to move out when that land lease is up and hand over the keys.
Seek a Realtor's Advice
I hope that helps and if you're not interested in leasehold property, feel free to contact me if you want to own something fee simple here in Hawaii. I can also help you with a leasehold purchase or sale as well. Mahalo and feel free to contact me at 808-371-3509.